03.27.17 | Kludgeocracy in America

"Kludgeocracy in America"

(link: http://www.nationalaffairs.com/publications/detail/kludgeocracy-in-america) is a highly readable and concise article teaching you more about government today than all the civics classes, political speeches or, indeed a close reading of the Constitution ever could. It lays bare the perverse incentives that drive the complexity and incoherence in the system. The accumulation of all these distortions results in a modern democracy that is but a funhouse mirror reflection of anything our Founding Fathers had originally envisioned.

The root -- kludge -- comes from a well-known reference to those clumsy inelegant patches that may address temporary problems but which collectively and inevitably lead to system compromise or even breakdown. One of the ironies is that the very nature of the phenomenon blinds us to the cause.

Yet, you will see its effects in everything you behold in life. Take tax collection. Whence comes a system requiring an annual compliance cost of 1.6 billion hours and $163 billion? Part of it arises out of the layered history of exemptions, deductions, and special incentives, the elimination of which would drop in half the marginal rate for a middle-income taxpayer.

Or take the current state of health care and attendant insurance. We long ago failed the could-you-explain-it-to-your-grandmother test. Or to your mother. Or to yourself with that two hundred slide PowerPoint presentation. Doctors abandon their insurance practice component in frustration. Patients leave the hospital and blankly stare at invoices that might as well have been written in hieroglyphics.

And those are but two examples. If you've ever (consciously) dealt with the education "blob" known as secondary education (teacher, student, administrator), environmental regulation, retirement planning, welfare (yes, that includes the invisible welfare known as the mortgage deduction) or have been subject to the indirect governmental costs via litigation, regulation, and direct policy programs then you'll have some idea of the kludge culture.

The article identifies some of the perverse incentives behind it all. "Marbled federalism" has led to example after example of shifting and hidden costs and the ducking of accountability (think Katrina). Those of us engaged in formulating the ColoradoCare state insurance initiative ran headlong into a kludge pile when it (the state) crossed into Medicaid (federal). Even the Constitutional concept of the separation of powers has come to act as a way to exact tolls (or favors).

The point is the root problem of American government is not one of size but of complexity, which leads to incoherence and opacity. "Imagine a world in which constitutional norms forced government to act directly and transparently or forgo action. Americans would have a government that did fewer, simpler, bigger things and they would be able to more effectively reward politicians for success and to hold them accountable for failures."

Steve SmithComment