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Carving Up the Homeland Security Pie

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Tags Taxes and SpendingFiscal Theory

04/30/2003Llewellyn H. Rockwell Jr.

Only to the most naive did the Department of Homeland Security sound promising. To seasoned observers of government, the idea of a new $40 billion DC bureaucracy means only one thing: billions for those who somehow manage to get their hands on the cash. Who are these people? Those who build the building, the bureaucrats who work there, the politicians who allocate the money, the outside companies who get the contracts, and the lobbyists who make the whole system of legal graft work.

In fact, this is the essence and history of all large-scale government reform plans. What begins with promising slogans degenerates rapidly into a cash cow for interest groups who know how to play the game. This was true during the Civil War and the Progressive Era and the New Deal—when government similarly promised great gains through sweeping reforms that ended up benefiting corporate special interests—and it is true of the Bush-backed, post-9-11 push for homeland protection.

Here is the plot of the latest caper. After 9-11, Bush had the idea that the government ought to make some effort to protect American shores from attack—a notable change of priorities for a government that manages to spend $2 trillion a year not doing the only major thing the US Constitution says it ought to do. In any case, Bush proposed reorganizing a whole host of agencies into one mega-bureaucracy—and this despite the enormous failure that 9-11 represented for precisely this bureaucratic approach. We were told that what dozens of agencies and billions couldn't do—namely stop angry extremists armed with box cutters—another agency and billions more could do.

We were told that this would finally be Republican good government at work. But there is no such thing as "good government," if we think of that phrase as representing a government that just does what the textbook says it is supposed to do: namely, serve the public essential goods without regard to self interest. All government activities are deeply tainted by the fact that its money is not gained through service but through force via taxation, and it is not doled out based on demonstrated need but arbitrarily based on bureaucratic decision making. There is no escaping this fact, no matter how much people talking about sweeping out corruption or "reinventing" the way government does business.

As Mises said in his book Bureaucracy, government is not a business so there is no profit-and-loss check on its activities. In the end, everything it collects and distributes is economically arbitrary but also and inevitably politically influenced. It is not the proverbial man-on-the-street who decides how the money is spent but those who have connections to the flesh-and-blood bureaucrats and politicians with the power to decide—and they don't work for free, but instead insist on quid for their pro quo. The result is what is called corruption, or what libertarians recognize as the ordinary business of government.

We are now getting the first glimpse of how the bureaucratic sausage is made. When the Department of Homeland Security was merely the Office of Homeland Security, agency head TomRidge surrounded himself by people with credentials for this type of work. According to the New York Times, many of them have left Ridge's inner circle to become lobbyists seeking contracts from the new Department. They cashed in on their new marketability and are now working for established lobbying groups that represent the interests of lawyers, software makers, security firms, and other corporations.

According to www.politicalmoneyline.com, lobbyist registrations related to homeland security have exploded. The number of companies and firms that use the words "homeland," "security," or "terror" on their registrations have gone from 157 in 2002 to 569 today, and the number is increasing by the day. The shift in priorities of Washington makes it all possible. Clearly, the businesses that make their living from living off others see the main chance here.

The big firm connection to the Department is a firm called Blank Rome Government Relations. It is now staffed by three of Ridge's former aids, including Ridge's former chief of staff. The firm has scheduled a big conference next month at which former Ridge aids will speak at a price, touting their credentials in gaining access to the department. Of course all these aids have their excuses, but the main one is obvious: there is more money to be made in lobbying than in being a bureaucrat.

Some of the people involved in homeland security lobbying include former Clinton drug czar Barry McCaffrey, former defense secretary William Cohen, former secretary of health and human service Louis Sullivan, former transportation secretary Daniel Lungren, and former general counsel of the INS William P. Cook. As the Times notes, one lawyer involved in the racket recently wrote an article called "Opportunity and Risk: Securing Your Piece of the Homeland Security Pie."

When revisionist historians look back at the amazing spectacle of government in the post 9-11 era, they will see a process fraught with the lowest form of grubbing. And so long as we are accounting for the work of special interests, consider the billions and billions doled out to defense-industry contractors to make bombs and planes used in wars supported by large industrial interests. In fact, you can safely anticipate that when all the dust settles after the Iraq and Afghanistan wars, the deep motives for the main players will have nothing to do with stopping terrorism and everything to do with lining their pockets at your expense.

In some sense, we are seeing the repeat of the history of the Civil War and Progressive Era and New Deal, periods of massive expansion of government in the name of fixing up society that quickly degenerated into immense special-interest capers. In fact, once you look past the rhetoric, this is precisely what these projects were designed to do, not fix up society but make some people enormously rich at other's expense. To recognize the fraud behind Washington's clichés about public service is not to be cynical; it is just a matter of taking off the blinders.

A huge industry of commentary and analysis exists to do something about the problem of revolving doors and fixers. Plenty of neoliberals are hard at work trying to expose the developing homeland-security scandal. For example, government reformer Fred Wertheimer warns: "When you see lobbying firms starting to create whole new departments for the sole purpose of lobbying for homeland security contracts, I think the signal for the American people is to watch out, to be vigilant that their taxpayer dollars for homeland security get the best possible results, as opposed to going to the best Washington lobbyists."

You know what? It's futile. Public vigilance will not stop it. Wishful thinking will not cause a government dedicated to fleecing the public and rewarding its friends to suddenly become angelic. The only way to stop corruption in government is to stop government itself. As Mises wrote in the 1963/66 edition of Human Action. "There is no such thing as a just and fair method of exercising the tremendous power that interventionism puts into the hands of the legislature and the executive…. Corruption is a regular feature of interventionism."


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