In an article in Friday’s The Atlantic, Richard Posner, who has an easy and smart way for putting his finger on key problems, talks about his concerns on the tendency in American government in recent times to centralize power more and more. Here are a couple of excerpts from Posner’s article.
The Atlantic: A recent and very pertinent literature in economics–“organization economics”–emphasizes the costs of hierarchical management in slowing and distorting the flow of information up the chain of command and the flow of orders down it. The problem is compounded when as in the federal government the top layers are political appointees who may have little experience with the operation of the agency they find themselves managing.
Obama is extremely able and self-confident and has appointed on the whole very able people to his staff and to the departments; some of them are brilliant. But the capacity of brilliant people, appointed to high positions in the federal government from outside, to screw up is legendary. The danger is amplified when the government tries to do too much. The economist Frank Knight used to quip that although production beyond capacity is a contradiction in terms, it is observed every day in academia–to which we can add, in the U.S. government as well. There is danger that the government is trying to do too much and that the economic consequences will be negative and serious.