Tuesday, September 22, 2009

The Government Machine (Part 2)

Last time I looked at the National School Lunch Program, the Peace Corps, Delivery of Social Security and Government Retirement benefits, and the National Institute of Standards and Technology for waste, inefficiencies, and ways that the free market can easily step in and handle these initiatives without the need of federal government regulation.  Indeed, these programs could operate more effectively and respond to problems more quickly than the bloated government bureaucracies.  The one thing that these programs all have in common is the morality behind them.  No one is arguing if these programs are fulfilling a need - my argument is simply that it can be done better without the need for force from the government.

Food and Drug Administration
The FDA is the government agency in the Department of Health and Human Services tasked with regulating and supervising the safety of things that go into your body: food, diet supplements, drugs, vaccines, medical products, and cosmetics to name a few.  It also enforces sanitation requirements for interstate travel and rules for the control of disease in pets and other biological products.  The fun part is that there is only one regulatory agency responsible for these regulations.  Just like you wouldn't want a single commercial company in charge of important things like your credit score.  In an effort to combat this single point of regulation, there are several government and non-government organizations watching the FDA.  Unfortunately since there is only one regulating body, and that regulating body has the authority of the Federal Government behind any of its decisions, it isn't obligated by anything other than the level of public outcry to change its policies or regulations.

The American Red Cross is obligated to abide by FDA regulations.  The FDA has mandated that in order to reduce the risk of HIV-contaminated blood samples, any male who has had sexual contact with another male, even once, since 1977 is not eligible to donate blood.  If we look at the government's aids.gov research, we can see their verification data.  In 2007, 57% of those involved in this study reported that they had been infected through sexual contact involving two males.  That sounds like a strong statistical basis for prohibiting gay men from donating blood.  This got me thinking: what percentage of gay men in the US are HIV positive?  I found this interesting source that did some number crunching for me.  Since there are still lots of people that aren't comfortable reviling their sexual preference, it is very difficult to get a real number, so most if it is still mostly done through analysis.  This analysis reviled that only about 12% of gay males in the US have HIV.  With this revaluation, the statistical case for banning gay males from donating blood goes out the window.  Unfortunately, this government agency doesn't see any reason to change their regulations... the FDA revisits this policy once a year, by the way.  They have chosen to do nothing for the past 32 years.

With a single regulatory agency there is also the chance of corruption.  In a 2005 article in the scientific journal Nature, a study reviled that in 70% of all FDA prescription drug panels writing clinical guidelines had at least one member on the panel that has direct financial ties to the pharmaceutical company that manufactures the drug being evaluated.  In one case, every single member on the panel evaluating epoeitin alfa for use in HIV positive patients had received money from the drug's manufacturer.

In the corporate world, a regulatory agency that continued these practices would loose credibility and be run out of business as member organizations withdrew from this agency's regulations.  What makes the FDA immune to this type of action?  They are the only regulatory agency in the US and they are backed by the US Government.

Global Positioning System
Oh, the Department of Defence:  how we both love and hate thee.  It is funny that when people think of frivolous government spending, the DOD is one of the first government agencies that is fingered because of their enormous budget ($612.4 Billion identified as "Discretionary Spending: Defense" in 2008 according to the congressional budget office - that is about 4.9% of all Federal Government Spending in 2008) and its infamous "black budget" for secret projects and yet GPS is one of the projects that is identified as a federal government success story.

The Global Positioning System began its life in 1960 under a NAVY program called Transit.  It was a constellation of five satellites that would float around the globe together allowing for a navigational fix once about every hour.  In 1983 President Ronald Reagan issued the National Security Defense Directive NSDD-102 (Previously classified document, released in part) in response to Korean Air Lines Flight 007 (which happened to be carrying a seated member of the US Congress) being shot down by the Soviet Union because the aircraft strayed into Soviet airspace while on autopilot.  This directive allowed GPS technology to be available to the public as a service to benefit the common good once it was fully operational.  The modern constellation of satellites was completed in 1994, but there are still a few launches to upgrade the system and replace failed satellites.

Nearly everyone has a GPS receiver now, but do you know its limits?  Because it is a government-controlled device, each manufacturer is held to strict FCC regulations that can change at the whim of the government.  One such restriction is that your GPS receiver won't operate above 18km (about 60,000 feet) or while moving faster than 515m/s (about 1100mph).  The government thinks that if your receiver is doing one of these things, then clearly it is a ballistic missile and should be denied GPS capability.  That sounds reasonable, but what if I want to make an amateur weather balloon to take pictures of the curvature of the earth and track the balloon's progress because it is cool?  These types of experiments will commonly exceed 40km (about 130,000 feet) and thus will be denied the ability to use GPS.  There are several other similar systems created by other countries, but all of them are forbidden in the US due to import restrictions.  Alternatively, what if I wanted to build a cruise missile in the US - it would fly at about the same height and speed of a private plane, so I could use GPS for that... not to mention that it is much easier to build a cruise missile than a ballistic missile.

Finally, what about those people that choose not to use GPS for whatever reason (maybe they don't like that the US military is using it to bomb civilians in Afghanistan or something).  They are still forced to pay (through their taxes) for the maintenance of the system.  This, like several other government problems, boils down to freedom.  You don't have the freedom to choose what your money supports: be it a sophisticated map to get you from A-to-B or the ability to "reach out and touch someone" with a 3000lb JDAM.

Postal Service
Postal services on US Territory actually pre-dates the United States, but the United States Postal Service was headed up by Benjamin Franklin in 1775 and backed by the Second Continental Congress.  There were a couple of government changes that eventually led to the creation of today's postal service after the 1970 Postal Reorganization Act.  The current USPS is legally identified as an "...an independent establishment of the executive branch..." as opposed to a Government-owned corporation (like Amtrak).  As an Independent establishment it has not received tax money since the early 1980's, but it does receive several perks of a government entity.  Among them are sovereign immunity (it cannot commit a legal wrong and is immune from civil suit or criminal prosecution), eminent domain powers (the ability to seize private property or rights without consent), powers to negotiate postal treaties with foreign nations, and the exclusive right to deliver 1st and 3rd class mail.

Do any of those powers strike you as shocking?  The nice little nook it has created in the government also protect it from anti-trust regulations as decreed by the supreme court in 2004 .  Additionally, it is a federal offense for anyone other than an employee or agent of the USPS to deliver anything to that box you paid for on your property labeled "U.S. Mail".  Would the USPS be as successful without these protections?  FedEx and UPS alone have dominated the package delivery service for several years causing the USPS to increase their rates on their protected products (have you ever seen the price of a stamp go down?).  What benefit does the Post Office provide in today's world?  The US Constitution allows the government to create and maintain Post Roads, but it did not mandate a US Postal Service.  It was created during a time when communication between cities was so poor that companies like FedEx and UPS weren't viable, but in today's world it is the USPS that can't keep up.  It has out-lived its usefulness as is evident through the success of its competition even in the face of government handicaps.

Federal Highway Administration
With the broad hand-waving flying around regarding a US Highway Department and its efficiency, I believe the closest actual government entity to be the Federal Highway Administration (FHWA) which is a division of the United States Department of Transportation.  The administration has a complicated history that you can read about here, but the current form was created in 1967.  The largest push for the creation of the US Highway System was the Federal Aid Highway Act of 1956 signed into law by President Dwight D Eisenhower.  Eisenhower argued that in the interest of national defense, the highway system would allow the Army to quickly move around the country to fend off invasion by a foreign power.  Upon the completion of the highway system the cross-country trip of an Army convoy was reduced from two months to two weeks.  All hail the Department of Defense and its public works programs!

The major thing this administration has going for it is that most of its responsibility is maintenance.  Approximately 98% of the roads identified in the National Highway System have been built already.  Road maintenance doesn't experience a lot of fluctuation in cost or procedures, so there isn't really a lot to screw up.  Except when it comes to bridges, apparently.  Remember the bridge collapse in Minnesota?  An investigation into US bridges came up with 26.2% of all bridges in the US are structurally deficient or functionally obsolete (by the way: watch out, Massachusetts, Rhode Island, Pennsylvania, Washington DC, and Hawaii - more than 42% of your bridges are bad!).  I'll grant that not all of these bridges fall under direct control of the FHWA, but that agency is responsible for the quality of work for which federal funds support... which is another area where the FHWA is lacking: regulations.

The FHWA is also responsible for generating highway safety standards.  How many of you follow the speed limit?  According to various studies, anywhere from 60% to 80% (depending on where the speed was measured: rural, suburban, or urban highways) of all drivers do not comply with the posted speed limits.  Remember when highway speeds were limited to 55 mph for safety and fuel economy?  According to the Cato Institute, safety on the highways actually worsened for the first several months after the passage of the 55pmh law.  As for fuel economy - various independent studies assembled by the Heritage Foundation have shown that limiting highway speeds to 55 mph only has a 0.5% fuel economy saving.  With this in mind, how much is the FHWA actually helping highway safety?  Of course you remember my gripe from Part 1 about government regulations when private regulation agencies are quicker to adapt to new technologies and better at world-wide implementation.

Finally, what about making the highways pay for themselves?  have you ever had that though when you are driving down the highway that just made sense?  One example I can think of is: why isn't there some sort of wind turbine embedded in the median the take advantage of the wind all of those cars driving by creates.  Any privately operated road system that wanted to remain free to its users would need to come up with some way of making that roadway generate revenue.  Why shouldn't a road be able to generate enough revenue to support itself?  Toll roads were emerging around the country as a highly successful venture before the national highway system monopolized everything into a government-run institution.  From my experience in Massachusetts, it angers me to no end that the tolls I pay on the Mass Pike (I-90) are mostly going to pay for the Big Dig around Boston which I don't even drive on.  If the Big Dig was such a necessity, why doesn't it become tolled until its debts are paid off?

I haven't made my arguments as strong as I typically like through the use of more examples mostly because I wanted to keep the length of these posts to a readable limit.  My intent is to get you to break from the normal thinking of, "well it has been working for this long - it must be good."  The status quo may be functioning now, but that doesn't mean that there isn't a better way to do things and it definitely doesn't meant that just because the government can run a program for a long time that it is running it well.  Did I miss something or get my facts wrong?  What do you think about my compilation?  Let me know in the comments.


  1. SO actually, states have the rights to set their own speed limits - however if they do not comply with the federal suggestion of 65, they lose federal funding. That is also true with the drinking age - each state gets to decide, but if it is less than 21, the state loses federal money.

  2. Karen, the 10th Amendment to the US Constitution addresses your concern directly. This effectively re-states that which is in the constitution regarding the limited powers of the Federal Government. While the supreme court doesn't often overturn laws which violate the 10th Amendment, there have been some examples. Check out this Wikipedia entry regarding the 10th Amendment: http://en.wikipedia.org/wiki/Tenth_Amendment_to_the_United_States_Constitution.