THE GOVERNMENT
This is a syndication from Jared's Daily Dirtnap daily market newsletter. WSO readers qualify for a $100 discount...just email [email protected] and mention "WSO Monkey Discount" You can follow Jared on twitter at @dailydirtnap
People go back and forth on this: government is too big, government is too small. Well, if there is one thing that most people on Wall Street have in common, it is that almost none of them have worked in government. I have. I have an opinion on the size of government, for sure, but at least mine is an educated one.
So let me tell you a couple of government stories, leaving aside all the ones from the Coast Guard Academy (or maybe we will get to those later). So I graduate from the Academy, and I go to a ship. A white one. White ones do law enforcement. I was stationed in the Pacific Northwest. There are a lot of fish in the Pacific Northwest. At least, there used to be a lot of fish. Maybe we will get to that, too.
So I report aboard the cutter, and the first thing they do is make me Weapons Officer. I have a gunner’s mate working for me. Before long, he is scooped up by CGIS (yes, like NCIS) for being a bigamist. Well, it is not as bad as it sounds. He got drunk and got married, a second time, in a blackout.
Well, I suppose it could happen to anyone. This is really the beginning of the story, really, a story about a ship whose annual budget is $20 million a year, whose mission is law enforcement, that actually conducts very little law enforcement. We would go out to sea for 6-8 weeks at a time and typically board about 8-10 fishing vessels. Maybe we would board 50 a year, to the tune of $500,000 a boarding. This is leaving aside the fact that the law enforcement program was in shambles. The bulletproof vests were moldy and rotten, the weapons belts covered in salt, nobody was qualified to do anything (with the exception of guns, at least people were qualified with those), and nobody knew what the hell was going on.
Well, what they did was make me in charge of law enforcement on the ship. So I asked the Executive Officer for money (about $10,000) for new equipment. He said no. I started training boarding team members. I was discouraged from doing so. Nobody seemed to care that we didn’t do any boardings, and nobody seemed to care that the boardings we did were fraught with danger because the equipment was faulty and the law enforcement personnel were unqualified.
This is, of course, separate and distinct from the issue that we weren’t doing any boardings to begin with. Let me explain. The military (particularly the sea services) has zero tolerance for error, and therefore, zero tolerance for risk. If you are the commanding officer of a cutter, and you do a boarding, and someone gets hurt, your career is over. So the goal is to do as little law enforcement as possible.
So like I said, nobody was giving me any resources to do the thing that was the whole point of the existence of the barnacle barge to begin with. I found this to be (just a bit) confusing. Um, the taxpayers want us to enforce U.S. law at sea. We aren’t doing it. What, exactly, were we doing?
I’ll tell you what we were doing. We were doing the MLC (Maintenance and Logistics Command) Administrative Compliance Inspection. We would get underway, and most of what we spent our time doing was getting our files in order. I wish I was making this up. This is essentially what the MLC Administrative Compliance Inspection was all about, getting our files in order. You see, if we did poorly on the Administrative Compliance Inspection, it could cost the Commanding Officer a job. So we spent a lot of time (a lot of time) organizing our files. But we spent virtually zero time doing law enforcement. We would literally go out to sea to organize our files.
Now, as you know, the goal of any government entity, the ultimate goal, is to spend its entire budget. It is pointless to try and save money, because HQ is just going to shrink your budget next year, and if you return the money to the authorities, they are just going to give it to someone else, and it is going to get spent anyway. So what is the point? So every year, at the end of the year, it was a race to spend as much money as humanly possible. Most of it went to engineering equipment, nuts and bolts that would get delivered in boxes on the pier and would go down in the engineering storeroom, forever, never to be used (except as ballast).
Well, inevitably, there would be units who wouldn’t spend all their money, and that money would get redistributed to the fleet. This was called “fallout funds.” Like, money that falls from the sky (or grows on trees, or whatever). We were slated to receive about $9,000.
So I went to the XO and I told him that I wanted the fallout funds for law enforcement gear. I was in competition; everyone on the ship wanted the money for some pet project, none of which had to do with the actual mission of law enforcement. I did get my way; I talked him into giving me the money, and I got all new equipment, at a cost. Everyone on the ship was pissed, especially the engineers. I wasn’t too concerned about it, though. I took my law enforcement responsibilities seriously.
I worked very hard at it. I was constantly doing training on law enforcement techniques and fisheries regulations. Everyone thought I was really, really weird. My performance was not being evaluated on this at all. In fact, the XO would much rather that I spent my time doing things like organizing my files. I didn’t care. (It cost me, in the long run.)
My story is not unique.
Well, it didn’t take long before I decided that I had enough, and I went and applied to business school in the Bay Area. In order to go to business school in the Bay Area (part-time), I had to ensure that I got stationed in the Bay Area. So I applied for the worst job possible, put it at the top of my list: Pacarea Intel. Nobody cared about Intel at the time; it was a bunch of misfits who had ruined their careers (things have changed since then). I knew that I was going to be in competition with precisely nobody. I was right. I got the job.
This was the job where careers went to die. Many of my predecessors had gone on to get passed over for promotion to Lieutenant. The office had a horrible, horrible reputation for being a bunch of lazy idiots. So I showed up for my first day of work, and they told me that I was the fisheries analyst. Okay. What do I do? I don’t know, they said. Figure it out.
So I sat down at my empty desk. I came into work every day, and sat down at my empty desk. For a month. After a while, I decided that it was getting embarrassing and that I should do something. Keep in mind that I didn’t really have to do anything, because I was getting out of the Coast Guard, anyway. I could have worn a dress, like Klinger.
So I started learning about fish. One fish red fish blue fish two fish or however that goes. I got books and academic papers, and talked to scientists and fishermen and local law enforcement, like fish and game folks, and learned everything there was to know about fish in the Pacific. Once again, people thought I was nuts. Why do all this work, when you can sit around and stare at the wall?
My biggest project was High Seas Driftnet fishing (hereafter known as HSDN). HSDN fishing is a problem, supposedly, because the nets are made of monofilament (like fishing line) and basically kill everything in their path, like marine mammals. They were made illegal by international law, of all things, but as most things go with international law, it is left to the U.S. to enforce it.
So it was an open secret that these guys were still out there fishing (for salmon). How do you find a fishing boat in all of the Pacific? Well, you could go fly around the Pacific randomly, burning up a lot of JP-5, which is what they used to do. The fisheries intel guy before me did a tiny bit of work and narrowed down a few million square miles into a few hundred thousand square miles. He then spent three years strutting around the office like a peacock, even though he never caught anybody. All I heard about was how big a hero this guy was.
So after a lot of searching, I unearthed some dusty, obscure academic papers on salmon migration off the coast of Russia. I also learned what water temperature salmon liked and what salinity they liked. That information I could get from NOAA, and combined with the information from my research, I was able to take the couple hundred thousand square mile search area and narrow it down to a couple hundred square mile search area.
On the first flight, we found five of these guys. For this, I received a Commendation medal.
Paradoxically, I learned a lot from that experience. “Figure it out” are my three favorite words in the English language.
So that is my experience in government, in a nutshell. Oh sure, I have more stories (which I might share another time, how government single-handedly killed off dozens of species of fish on the West Coast, wasting billions of dollars in the process). The far right-wingers are fond of saying that government employees are evil. They are not. They are good people. But they are generally unhappy people, because nothing is expected of them, and left to their own devices, most people will stare at the wall if paid to do so. But what government is good at doing is preserving itself.
Furthermore, it likes to expand its missions. Preventing a violation of law at the expense of $500,000, it thinks it can do other things, and will do so, if given the resources. In fact, if given the resources, it will expand infinitely. Listen, folks, I worked there, so I have credibility. I can criticize it if I want to. And let me tell you, all the coffee break stereotypes that you hear, not only are they true, they are not true enough. But they are nice people. So be nice. They just like money for nothing, like most of the world.
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Comments
Great Post.
Great Post.
"A man generally has two reasons for doing anything. One that sounds good, and the real one." - J.P. Morgan
sign me up........
sign me up........
I'm a "far right-winger"
I'm a "far right-winger" (meaning a rational person). I had the good fortune of working as a teenager in government (as a military brat abroad, there were some work programs that paid half minimum wage to keep us from getting into trouble). That turned me off to it for life, although I have had similar private sector experiences since. Try folding maps for an entire summer when you're 15 if you really want to experience boredom.
I don't think that people in government are "evil" and I don't think that's a broadly held view. Rather, expansive government is evil because it's tyrannical and it kills the human spirit. However, I do think it's evil to push this kind of life onto broader society. So I think that makes certain power players in government evil.
Government is formed to
Government is formed to provide collective benefit. The monstrosity we have now is a bastardization of that. We could shrink government, make it more efficient, spend less for it and get more out of it. Problem is no one wants their freebies to be taken away and Congress is elected by people who have vested interests in the government maintaining the status quo.
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A couple more posts of this
A couple more posts of this quality and I might actually have to shell out for your newsletter. But seriously, very interesting post.
Just curious. Are you left
Just curious. Are you left wingers even able to come up with an argument against this guy?
I understand you don't like military spending, and I don't either, but how can you support the entity that let's this kind of thing go on?
"A man generally has two reasons for doing anything. One that sounds good, and the real one." - J.P. Morgan
I want all government cut..
I want all government cut.. republican interests, democratic interests, I don't care.. 16 trillion in debt and +1 a year to the debt is too much.. I've personally seen tons of waste in my 7 years of government experience and want the spending to stop.
I've been on government contracts paid 6 figures per year where I literally could work about 20 hours a week and do nothing and nobody would care. Seriously.. I could show up at 10 leave at 2 "work from home" and punch an electronic time card.. there is so much waste.
I don't have your eloquence
I don't have your eloquence or story telling abilities unfortunately because I have some stories that would just make your skin crawl. I just left the world of military acquisitions (research and development and procurement type work) and I can attest to absurd inefficiencies as well. The biggest difference between our experiences is the number of zeros involved. The last two fiscal years my program received between $7,000,000 - $10,000,000 in "fallout" money. The thing you forgot to mention about fallout funds is they are one year money, meaning they legally must be spent before the end of the fiscal year. Normally this gives you less than 30 days to obligate the money. So the funds don't go to the most important projects they go to whoever can spend the money quickly.
Then you have all the useless government employees who basically can't be fired and don't do any real work. Most of the "engineers" in my office couldn't engineer their way out of a wet paper bag. They collect their salary sitting around 40 hours a week staring at powerpoint slides and doing nothing. My office parking lot was empty by 3:30pm every Friday and a ghost town after about 4:30 on any other day of the week. If you aren't bothered by mind-numbingly boring work and being surrounded by incompetence then being a government civilian has to be the easiest job for the money. $70-100k/year with no overtime, lots of vacation days and very little responsibility.
The bureaucracy is expanding
The bureaucracy is expanding to meet the needs of the expanding bureaucracy
BTbanker: Just curious. Are
Just curious. Are you left wingers even able to come up with an argument against this guy?
I understand you don't like military spending, and I don't either, but how can you support the entity that let's this kind of thing go on?
OP isn't making any argument all, what is there to counter? It's just a story about working in government. I've worked in government and the financial industry and I have some experience with government bush-leagueness of my own. But I have plenty of experience with corporate bush-leagueness as well. Most back-offices aren't run any better and there's plenty of people who get paid to do nothing at F500s. There are government branches (including at the local level) filled with far more productive, smarter and driven people, on a far tighter budget than in most back-offices. What gets people so upset about this is that this is being done with tax dollars and that's a fair criticism. The problem is that the government does provide some very important services to our country, just like the private sector. Fighting against this kind of waste should be a priority of our elected representatives but nobody on either the right or the left is stepping up to the plate. I mean just look at the Dems and Repubs who got some pork included in the fiscal deal, it's plain embarrassing. It won't be the ultimate panacea but I think campaign finance reform would be a good start on some real changes in this field.
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Government provides some good
Government provides some good things, but by and large, it exists for its own benefit and to grab more power. We should gut Washington simply because it will hamstring their power grab.
Just look at the who gun control bullshit. The government prosecutes less than half the gun cases it receives. Yet we want more laws which will lead to more cases which will be ignored by the government.
Washington is a cancer on this country and you don't allow a cancer to grow if you want to keep on living.
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Man, I don't know whether to
Man, I don't know whether to laugh or be upset lol.
To add on to this, government can't go out of business; it'll always exist. So when you compare waste in the private vs. public sector, smart businesses will cut the waste because they won't be around forever if they're blowing dough on boondoggle programs. So while I'm sure businesses have waste in their offices, there is incentive to find it and get rid of it or else their company will perish (unless of course you're GM and you get a bailout and can continue to overpay your union employees on ridiculous pensions).
I'm hopeful the right politician will come along and cut all the waste, but in just looking at the hesitancy to cut even PBS, I'm very skeptical and am afraid the system will have to blow up (a la Greece) in order for serious changes to made.
Great post. I worked for the
Great post.
I worked for the government as well and come year end it was spend or lose it for next year.
GoodBread: BTbanker: Just
Just curious. Are you left wingers even able to come up with an argument against this guy?
I understand you don't like military spending, and I don't either, but how can you support the entity that let's this kind of thing go on?
OP isn't making any argument all, what is there to counter? It's just a story about working in government. I've worked in government and the financial industry and I have some experience with government bush-leagueness of my own. But I have plenty of experience with corporate bush-leagueness as well. Most back-offices aren't run any better and there's plenty of people who get paid to do nothing at F500s. There are government branches (including at the local level) filled with far more productive, smarter and driven people, on a far tighter budget than in most back-offices. What gets people so upset about this is that this is being done with tax dollars and that's a fair criticism. The problem is that the government does provide some very important services to our country, just like the private sector. Fighting against this kind of waste should be a priority of our elected representatives but nobody on either the right or the left is stepping up to the plate. I mean just look at the Dems and Repubs who got some pork included in the fiscal deal, it's plain embarrassing. It won't be the ultimate panacea but I think campaign finance reform would be a good start on some real changes in this field.
The difference between an inefficient government (sorry to be redundant) and an inefficient F500 company is that government rewards inefficiency and the market punishes it. In other words, a Fortune 500 will see the resources available to it decline if it is inefficient. Government, which is essentially a monopoly that writes the rules and is protected by a military, is indifferent to inefficiency.
inkybinky: GoodBread: BTb
Just curious. Are you left wingers even able to come up with an argument against this guy?
I understand you don't like military spending, and I don't either, but how can you support the entity that let's this kind of thing go on?
OP isn't making any argument all, what is there to counter? It's just a story about working in government. I've worked in government and the financial industry and I have some experience with government bush-leagueness of my own. But I have plenty of experience with corporate bush-leagueness as well. Most back-offices aren't run any better and there's plenty of people who get paid to do nothing at F500s. There are government branches (including at the local level) filled with far more productive, smarter and driven people, on a far tighter budget than in most back-offices. What gets people so upset about this is that this is being done with tax dollars and that's a fair criticism. The problem is that the government does provide some very important services to our country, just like the private sector. Fighting against this kind of waste should be a priority of our elected representatives but nobody on either the right or the left is stepping up to the plate. I mean just look at the Dems and Repubs who got some pork included in the fiscal deal, it's plain embarrassing. It won't be the ultimate panacea but I think campaign finance reform would be a good start on some real changes in this field.
The difference between an inefficient government (sorry to be redundant) and an inefficient F500 company is that government rewards inefficiency and the market punishes it. In other words, a Fortune 500 will see the resources available to it decline if it is inefficient. Government, which is essentially a monopoly that writes the rules and is protected by a military, is indifferent to inefficiency.
Good point. There's really no accountability in government.
Some people will say that about capitalists like Dick Fuld, but the poor bastard is still out of work, and hated by every American. Congressmen don't face any consequences to their actions.
"A man generally has two reasons for doing anything. One that sounds good, and the real one." - J.P. Morgan
inkybinky: Government, which
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How much does dirtnap
I help people with the tough situation of not knowing how to respond to emails.
GoodBread: inkybinky: Gover
Probably depends on the
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BTbanker: Just curious. Are
TylerT: What does appeal to