Sunday, May 13, 2007

Bush misunderstands the Presidency - Congressional leaders properly mistrustful of Bush.

Michael Abramowitz of the Washington Post has an excellent article today about the relations between the White House and Capital Hill. He provides the detail, but from that detail I'd draw the conclusion that neither trusts the other much at all.

I find that unsurprising. The White House does not understand how large organizations make and implement major decisions. For anyone who wants a very good explanation of organizational decision-making I STRONGLY suggest reading the classic Essence of Decision. It is about organizational decision-making, using the Cuban Missile Crisis as an example. Read it and you will never look at "idiotic" organizational decisions the same way.

Let me offer a thumbnail description of the process of strategic decision making for large organizations. The problem of a strategy involves not one, but a whole series of decisions. I'll ignore the problem of actually making an extremely complex decision by human beings who are physically incapable of dealing with more than about seven variables at any one time. For that I will refer you to Herbert A. Simon's concept of Bounded Rationality and Satisficing. The book mentioned above, "Essence of Decision," is largely a very readable example of how real decisions are made under the limitations of bounded rationality.

Strategic Decision Making.

The first decision for a strategic decision makers has to be to decide what goal is to be accomplished. The second decision then naturally flows from the first. How should the goal to be accomplished and what resources (people, money, capital goods, infrastructure, etc.) will be used to accomplish that goal. This seems nice and linear at first. Decide on the goal, then decide how to get there. But the big snag quickly raises its head. Some goals require unavailable resources. They may not exist (colony on the moon or mars,) the resources just may not be available (health care for the masses in extremely poor countries) or they may be being used for other, higher priority purposes (fighting a war rather than providing universal health care.) A lot of the impediments to achieving the goal do not appear until the effort to implement it starts. So what happens then?

The goal decision has to be reopened. Either the goal is abandoned, or it is changed. Then the implementation decisions of how to accomplish the revised goal and what resources are to be used have to be revisited. This iteration may occur several times until hopefully, the goal and implementation decisions are workable and agreed on.

The Goal and Implementation Decisions for Business.

Let's go back and look at the goal decision first. A business has a (relatively) easy job making the goal decisions. The job of a business is to manage a social and economic process so that the cost of the resources used are less than the revenue produced by selling the output of that process. It is relatively easy compared to decisions made by government because a business needs to be responsive only to those potential customers who want those results and to the needs of the process of obtaining and procesing raw materials and selling the output. Anyone who cannot afford the output of the business is simply ignored.

All business goals are based on this idea. A business works ONLY for its customers and potential customers, and IGNORES everyone else. The concept of a free market suggests that those ignored customers may become a market for other businesses, but many people will never become customers. Only people WITH MONEY are customers. [And yes, I am ignoring the problem of externalized costs at this time. Dumping waste into the river rather than dealing with the increased cost of properly disposing of waste is a social problem that businesses work hard to ignore.]

The Goal and Implementation Decisions for Government.

A government does not have the luxury of ignoring whole groups of people when it establishes its goals. A successful government controls (or is expected to control) a specific, defined area of land and is responsible for what people do there and for what is done to them.

With the development of the twentieth century concept of citizenship, the various governments also have become responsible for the care and behavior of individual citizens outside the national boundaries, although this is a limited function. The government of a specific territory always has primary jurisdiction unless the foreigner comes from a nation whose government has negotiated or enforces an immunity for its citizens from the powers of the local government. This is rare, because it is an admission by the less powerful government that it is not strong enough to fend for itself. The legal position of contractors in Iraq has been such a form of immunity for foreigners provided by more powerful nations such as USA and Great Britain.

So a government that governs fairly cannot do so by simply governing for certain powerful groups of people and ignoring the rest - not that they don't try. That is the major reason why industrial nations sooner or later become democracies. Government has one set of problems to solve, businesses another, and traditionally, religions have even another. The real genius of the U.S. Constitutional system of democracy includes the fact that each of those three sets of powers have their own specific realms in which the other powers tread only to protect the overall system, and then very cautiously. The fourth realm of independence was provided by the Bill of Rights to the individual people. This is at least as important as the first three, but individuals without the power of democracy generally have only the methods of riots and revolt with which to make their needs known.

The Social System of Developed Industrial Countries in more Depth.

The purpose of the entire national social system is to provide the very best life possible for every individual. Each of the powerful realms, Religion, Government and Business, has its function to best provide such lives for every individual. Only government has functions that infringe on the independence of the others, and this power to infringe comes with a much greater set of legal restrictions and with the requirement that secrecy be sharply limited unless it is absolutely necessary.

The government sets and enforces the laws and is itself tightly regulated by them. The independent judiciary is needed to evaluate individual cases for compliance with laws under the Rule of Law. For this system to work, no one can be above the power of the law, including all members of the government. But let's look at what each of what I am calling the realms of power contributes to the nation, and what limitations each should face. Then, remember that all of this is in support of the best, most free, and most productive lives of the individuals who make up this nation. Ultimately, the people is why the rest are allowed to exist.
  • The purpose of the religious realm is to help individuals to understand and belong to their position in the Universe, or in a different set of words, to understand their relationship to the Divine. Religion offers insight into the mysteries of life and the unknown. It offers an educational function. Religion cannot be allowed to misuse people generally, and to this extent government must intrude on the functions of religious organizations. , but cannot be trusted with the legal powers of law, police and judiciary. These are all functions of government. The main thing that religion needs from government is to be left alone.
  • The purpose of the business realm is to take in raw materials, process them to add value (including both processing and distributing them), then then sell them to customers who have the money to buy them. A business manages the process that it puts the raw materials through, but needs no power beyond that required to acquire raw materials, capital goods, and to hire labor. Every business requires enforceable contracts and a well-managed currency. Like religion, business cannot be trusted with the legal powers of law, police or judiciary, so the enforcement of contracts is farmed out to government. Similarly, a reliable currency is required for all businesses to operate effectively. This is another function that must be performed by government, and since the banks create most of the money supply through the lending function, the government must also regulate banks to a much greater extent than most other businesses. In a related function, business cannot function effectively without a good understanding of what the other businesses are doing, This is especially true for banks and financial institutions. Allowing other businesses to conduct this without some regulation gives too much power to competitors, so this is another function of government.
  • The purpose of the government realm is to protect the people (all of them, regardless of the money they have. Government cannot exclude certain groups from its benefits and controls for greater efficiency the way businesses and religions can), religions and businesses from outsiders who ignore the rules. Government also collects system-wide information and applies it to the problems of state rule enforcement. The law enforcement function belongs to well-regulated government organizations. We give government the sole right to use force on individuals to make them comply with laws, and then limit to individuals and government organizations to a specific set of situations in which they can use such power. The independent judiciary has the final approval of such actions.
  • People in general make up all of the three realms I have described. The purpose of government is to protect individuals from each other and from predations by religion, business, government and outsiders. Where possible and cost-effective, government also works to make individuals more useful to society. Most importantly, this means helping families to rear their children and to socialize them into American society so that they can function productively. Again, government must have a monopoly of force and there has to be an independent judiciary which passes judgement (within the Rule of Law) on apparent infractions of the law while limiting the effective power of religion, government and businesses.
Let me point out again that the above "realms of independence" work only if there is an effective Rule of Law and an independent judiciary in place to enforce it. None of the rest of the system works without the Rule of Law and its effective enforcement. The independent judiciary is absolutely critical to ensure that each case in which two parties have a conflict in which the law is to be applied have a fair and independent organization which will determine the facts, apply the law, and make a judgement. This allows both consistent and fair application of the law. It also exposes individual cases in which existing law is a bad law, and either applies the Common Law or provides the legislature with the information needed to revise the law.

So Why do the White House and Capital Hill Face Each Other with Distrust?

Bush is a business manager. Business decisions properly make a fetish decisions geared towards greater efficiency Efficiency can be best achieved by standardizing products and ignoring, even rejecting, large elements of customer demand. This allows long production runs that minimize costs. The easiest way to be allowed to produce a few very low costs models of any product is to operate a monopoly. Cost can be minimized while revenue will be higher than if there are competitors.

The second best solution for business is to have a few very large businesses who agree to split up the market. This often happens in a mature market. Businesses in such a mature market rarely provide new products or a large variety of models unless challenged by competitors. Frequently it is easier to deal with competitors in a mature or declining market by mergers or buying them out. Such mergers invariably lead to higher cost products, while every step away from monopoly makes achieving low cost through greater efficiency more difficult for the business. Government needs to prevent these mergers, because the closer a business comes to being a monopoly the fewer new products and services it provides, and the higher the price it charges. electric power utilities are an excellent example, as are phone companies. Privately owned and operated toll roads will soon prove to be similar disasters.

Businesses also supposedly react quickly to changes in markets. Such changes require an individual decision-maker with a free hand to be effective and even then often don't work. Still, that business model is better than committee decisions. But this leads to a particular socialization of business managers as they grow in their profession.

As business mangers get promoted in American business they tend to specialize. That limits to kind of decisions they are good at, but they supposedly get better and better at making those decisions - as long as the circumstances in which the decisions are made do not change rapidly. Such managers often know their speciality quite well, but they tend to be weak strategic managers. They make decisions based on limited information and their experience in the past about customers and goals and then focus on the most efficient implementation of those decisions - no matter who is hurt in that implementation. Efficiency becomes the primary attitude that leads to the implementation of decisions. Such managers are not trained to gather information on new and unusual situation, and they are discouraged from being curious outside their speciality. It's not efficient. So they don't deal well with new or sharply changed situations. Usually they try to find someone to hand such decisions off to. George W. Bush is this kind of manager.

The Constitutional Structure of American Government.

At the social and strategic levels, goals are more important than efficient implementation. Government cannot limit itself to a restricted set of customers, so efficiency in any one area tends to leave out a great many people who need government services. Setting goals requires a lot of information of various types from a variety of people. The U.S. Constitution sets up the Congress to represent the people and gather the information regarding what People, Families, Businesses and Religions need from government. The term "Represent" means to know the issues of importance to a variety of people and organizations and to bring this variety to bear on developing the goals of overall government.

The Legislature gathers that information and runs it through competitive pressures and power mechanisms to develop the national goals. Part of gathering that information is holding public hearings on various aspects of government and society. This informs the goal making process while also educating the population about what is happening in society. Once the goals are established, they are then given over to the Executive Department for implementation. The Executive Department does not have the sources of information nor does it have in place the needed procedures to make broad goal decisions for the government. Instead it has the single President and a hierarchical organization that is designed to make implementation of the goals easier once those goals have been provided by Congress.

So the only decisions which the President makes are those of implementing the goals given by Congress, and coordinating the use of the resources the Congress supplies. Congress establishes the goals and the priorities of those goals.

The President also has the limited function of making short term decisions to deal with rapidly changing situations, subject to the approval of Congress. The President also knows of should know what resources and abilities the government has to work with, so he provides information regarding the government's capabilities to Congress for them to use in formulating or reformulating goals. He also reports on the status of goal achievement to the Congress and the people at least once each year.

The Distrust between Capital Hill and the White House.

The distrust between the White House and Capital Hill is based on Bush's misunderstanding of the limitations of his goal formulation power. He has very little, but he wants to take on a great deal more. Yet he has neither the ability nor the Constitutional power to take on such extended duties.

His efforts to implement the so-called "Unitary Executive" are nothing more than an attempt to take the executive back to the forms of power practiced by Kings when the theory was the "Divine Right of Kings." Such power was done away with by every industrializing country as soon as it was realized that the government were too inefficient to run competitive business organizations. The U.S. Constitution was written at a time when it was realized that government was best run by a representative Parliament or Legislature, and America has been greatly blessed by this structure. George W. Bush, having never had a job as an independent manager unless someone brought him into the business for his name and connections, does not understand his own limitations or those of the Constitution.

The Democratic Constitutional leaders recognize this, and do not trust Bush, nor do the Democrats react as he expects to his assumption of powers that go beyond those allowed and expected under the Constitution and by American tradition. The previous Republican leaders of Congress were Right-Wing Authoritarian in personality, so they allowed Bush to take excessive leeway and they failed to do the job Congress is needed to do.

The change from the compliance of the Republican leaders to the distrust exhibited by the current Democratic leaders has rather shocked Bush, and he doesn't understand where he stands with respect to Congress now. Since he recognizes the distrust from the Democrats he similarly distrusts them.

So that is the source of the conflict right now that was described in Michael Abramowitz' article.

Comments, criticisms and links would all be greatly appreciated. I am trying to get this information into an article short enough to read, and still make it flow easily so that my point is made. I also learn more from dealing with disagreement than I do from agreement, so don't hesitate to offer criticism.

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