How to reduce the power of bureaucrats

"In the wake of the Obama IRS scandal, a well-meaning GOP congressman posed this question: What rules might Congress enact to ensure that the tax bureaucrats couldn't again harass civic-minded Americans? It was the classic political answer to a problem (more rules), and therefore entirely the wrong one. When it comes to controlling the ranks of bureaucrats, the biggest priority isn't reorganization or even cutting numbers. It's about destroying their mission, their power.

The IRS was able to target conservatives because its mission is to police an insanely complex tax code that -- counting regulations and guidelines -- runs to an inconceivable 16 million words. This provides some 90,000 functionaries stunning discretion to snoop, question, dispute, reinterpret and penalize. Want to end targeting? 

Create a flat income tax; eliminate the corporate tax; abolish tax credits; simplify nonprofit rules. Take away the mission and you take away both the power and the need for most of that workforce.

This is the point government-reform geeks are hoping Elon Musk and Vivek Ramaswamy -- and, more important, congressional Republicans -- internalize as they meet this week in Washington to ramp up a Department of Government Efficiency. Happy talk of mass firings is thrilling until one remembers that most bureaucrats are there because of complex programs mandated by Congress -- programs that don't simply disappear with pink slips. It might shave dollars to fire half the employees at Program X, but it still leaves the other half to double down on Program X mischief.

For a sense of that threat, consider a recent New York Times lament for the "exhaustion" felt by bureaucrats at "the prospect of a second go-round" with Donald Trump. They express "anxieties" about Trump "priorities" that will clash with their own "expert" opinions. They dislike any administration impeding their work on "climate change," "civil rights reforms" and "regulatory protections." The piece ends with the smug hope that the bureaucracy is now so vast as to provide it "imperviousness." This is the arrogance and resistance the reformers are up against.

Mr. Ramaswamy is showing strong signs he gets it. On these pages and in recent interviews, he has seized on the enormous opportunity the Supreme Court has provided DOGE, cabinet heads and Congress via its rulings on the "major questions doctrine" and Chevron deference. Those two decisions cabin bureaucrats' power to make decisions on their own -- at least going forward.

Mr. Ramaswamy's idea is that it is also an opening to subject thousands of existing regulations to those court tests and, under a "posture of executive humility," eliminate them. "All we need right now is an executive branch that says, 'Hey, Supreme Court, you've told us a lot of what we are doing is illegal,' " he said in podcast last month. "So we're not going to do that anymore, and that requires us to take any regulation that fails these standards . . . . We're just going to rescind, they are null and void . . . because they were never written by the people who we elected." He adds that "if you have 50% fewer regulations, that creates an industrial logic to say that, 'OK, then we don't need 50% of the people around anymore, either.' " Exactly. Get rid of the mission, and you get rid of the people and the behavior. Horse before cart.

Reformers are also hoping the DOGE duo -- alongside Mr. Trump -- understand how many of these missions and programs are jealously guarded by even Republicans in Congress. That's a fight no one is picking, but it will need to be engaged if DOGE wants success. Mr. Musk, for instance, is keen to overhaul a broken federal procurement system. But why does such an embarrassing system continue on autopilot? Because behind every $600 Pentagon hammer is a congressman with a district whose factory produces it. This is one place where threats and demands from Mr. Trump's bully pulpit could produce benefit; only that level of public shaming might move Republicans to give reform priority over their personal, district or state interests.

Which gets back to that IRS story. Gripe all you want about the unelected branch, but never forget this behemoth bureaucracy was created and emboldened by legislators who churned out programs and complexity for decades even as they abdicated their duty of writing clear limits into law. Yes, any elimination of waste or duplication or fraud is welcome -- and those will be the easiest DOGE targets. But this GOP Congress and presidency shouldn't get away with suggesting DOGE can do the work only they can.

Real change requires cutting programs, simplifying rules, handing power back to states, abandoning earmarks and handouts. That requires votes.

There is a brilliance to the DOGE title, as the goal of "efficiency" can justify just about anything. Cuts. Restructures. Relocations. There's a need for all of it, but for DOGE to be successful its north star must remain paring back the federal government's missions -- and reminding Americans that to diminish the government's power, legislators will need to get off their duffs." [1]

1. The Opposite of Mission Creep. Strassel, Kimberley A.  Wall Street Journal, Eastern edition; New York, N.Y.. 06 Dec 2024: A.15. 

Besaikis finansinių sankcijų naudojimas yra žalingas JAV

 

Svarbiausia, kad sankcijos nekenkia Landsbergių vaikų darželiui.

 

 „Rugsėjį Donaldas Trumpas aistringai gynė dolerio, kaip pasaulio rezervinės valiutos, statusą: „Jei mes prarastume dolerį, kaip pasaulio valiutą, manau, tai būtų tolygu karo pralaimėjimui“.

 

 Šis statusas yra toks svarbus Trumpui, kad praėjusį savaitgalį jis pagrasino įvesti 100% tarifus Briksams – kylančios ekonomikos šalių grupei, kuriai vadovauja Brazilija, Rusija, Indija, Kinija ir Pietų Afrika – jei jie sukurs alternatyvą doleriui.

 

 Įspėjimas gali būti kiek per ankstyvas; Brics valiuta dar turi peržengti diskusijų etapą.

 

 Tačiau Trumpo dolerio gynyba yra langas į tai, kaip, jo nuomone, JAV turėtų panaudoti savo ekonominę galią. Jis teigia, kad ši galia buvo sumažinta dėl pernelyg didelių finansinių sankcijų, skatinančių kitas šalis vengti dolerio naudojimo. Jis mano, kad tarifai yra lankstesnis, mažiau žalingas būdas pasiekti Amerikos užsienio politikos tikslus.

 

 Teorija lieka nepatikrinta. Tačiau Trumpo požiūris nusipelno rimto tyrimo, nes dabartinis požiūris vargu ar yra sėkmingas.

 

 Sankcijos dar neprivertė Rusijos palikti Ukrainą, Venesuelos prezidento Nicolas Maduro perleisti valdžios ar Irano atsisakyti jo branduolinės programos.

 

 Doleris tapo pageidaujama priemone užsieniečiams prekiauti ir investuoti tarpvalstybiniu mastu dėl JAV ekonomikos ir finansų sistemos dydžio, gylio ir stabilumo. Tinklo efektai – tendencija naudoti dolerį, nes tai daro visi kiti – apsunkina konkurentų trauką.

 

 Rezervo statusas leidžia JAV skolintis daugiau ir mažesnėmis palūkanomis, nei kitu atveju. Tai reiškia, kad daug tarptautinio verslo srautų eina per finansinius kanalus, kuriems priklauso JAV jurisdikcija. JAV gali suluošinti užsienio veikėją, nutraukdama jam prieigą prie šios sistemos.

 

 Ir JAV naudojasi šia galia vis dažniau. Beveik kiekvieną dieną JAV įtraukia dar vieną subjektą į savo sankcijų sąrašą už nusikalstamą veiklą, terorizmą, žmogaus teisių pažeidimus arba ryšį su sankcionuotu režimu. Šiuo metu JAV turi daugiau nei 17 000 sankcijų taikinių.

 

 Tačiau kai kurie nerimauja, kad sankcijų mastas gali priversti save nugalėti. „Kuo labiau taikysime sankcijas, rizikuojame sumenkinti dolerio, kaip nacionalinio saugumo priemonės, naudojimą“, – sakė Kimberly Donovan, anksčiau dirbusi Iždo departamento Finansinių nusikaltimų vykdymo tinkle, o dabar dirbanti Atlanto taryboje.

 

 Savo kalboje rugsėjį Trumpas užsipuolė sankcijų paplitimą: „Galų gale tai nužudo jūsų dolerį ir sunaikina viską, ką doleris atstovauja“, - sakė jis. „Noriu kuo mažiau taikyti sankcijas." Jis sakė, kad įveiks muitus bet kuriai šaliai, kuri atsisakys dolerio.

 

 Jo savaitgalio grasinimas padaryti būtent tai gali būti susijęs su kai kurių Bricso lyderių, ypač Brazilijos prezidento Luizo Inacio Lula da Silvos, susidomėjimu sukurti alternatyvą doleriui. Tačiau Pietų Afrikos vyriausybė šią savaitę pareiškė, kad Briksai neplanuoja naujos valiutos.

 

 „Karštas oras“, – sakė buvęs iždo pareigūnas Markas Sobelis. „Nėra vienybės, nėra ekonominio krūvio, o Briksus per daug skaldo geopolitinė įtampa“.

 

 Atlanto tarybos duomenimis, doleris vis dar sudaro 58% pasaulio užsienio valiutos atsargų, 54% eksporto sąskaitų faktūrų ir 88% užsienio valiutos operacijų.

 

 Tačiau kitos šalys, ypač Briksai, suintensyvino pastangas palaužti dolerio dominavimą. Šios pastangos sustiprėjo po to, kai JAV ir Europos Sąjunga įšaldė Rusijos centrinio banko užsienio turtą ir uždraudė keliems Rusijos bankams naudoti „Swift“ – Belgijoje įsikūrusią žinučių siuntimo sistemą, kurią bankai naudoja tarptautiniams mokėjimams, po įvykių Ukrainoje.

 

 Nuo tada Rusija ir Kinija padidino savo alternatyvių mokėjimo sistemų naudojimą. Briksų šalys išleidžia daugiau skolų užsieniečiams savo valiuta. Keli besivystančių rinkų centriniai bankai kuria platformą, skirtą atsiskaityti savo skaitmeninėmis valiutomis.

 

 Kylanti aukso ir bitkoino kaina, kuri pirmą kartą viršijo 100 000 dolerių, gali atspindėti dolerio alternatyvų paieškas.

 

 Tarifai mažiau, nei sankcijos, atgrasys nuo dolerio naudojimo. Jas galima kalibruoti, o sankcijos paprastai yra viskas arba nieko. Vakarų šalys įvedė sankcijas, draudžiančias pirkti, transportuoti ar drausti rusišką naftą, viršijančią ribą. Tačiau ribą buvo „labai sunku įgyvendinti“, sakė Donovanas. „Tarifai, tikriausiai, būtų buvęs strategiškesnis ir sudėtingesnis požiūris."

 

 Tarifai gali būti naudojami prieš draugiškas tautas, o sankcijos paprastai negali būti taikomos. Trumpas pagrasino įvesti muitus Meksikai ir Kanadai dėl fentanilio ir nelegalios imigracijos. Spalio mėnesio nuomonių skiltyje rizikos draudimo fondų valdytojas Scottas Bessentas, dabar Trumpo išrinktas iždo sekretoriumi, tarifus apibūdino, kaip naudingą priemonę „suvilioti sąjungininkus daugiau apsisaugoti, vystant  savo gynybą, atverti užsienio rinkas JAV eksportui, užtikrinti bendradarbiavimą, nutraukiant nelegalią imigraciją ir užkertant kelią prekybai fentaniliu arba atgrasant nuo karinės agresijos.

 

 Tačiau ir tarifai turi trūkumų. Kaip ir sankcijos, per daug naudojami, jie gali taip sumažinti prekybą, kad JAV nebelieka svertų. Tarifai gali pakenkti JAV, o ne tik taikiniui, padidindami kainas, sutrikdydami gamybą ir kviesdami imtis atsakomųjų veiksmų.

 

 Kita komplikacija yra ta, kad, norint išlaikyti dolerio atsargų statusą, JAV turi aprūpinti likusį pasaulį doleriais pagrįstu turtu, pavyzdžiui, obligacijomis. Kitaip tariant, jis turi būti grynasis skolininkas, o tai reiškia, kad jis turi turėti einamosios sąskaitos deficitą (plačiausias prekybos matas, apimantis prekes, paslaugas ir pajamas).

 

 D.Trumpas nori sumažinti prekybos deficitą, dėl kurio kaltina kitas šalis, be kita ko, išlaikant žemą jų valiutą dolerio atžvilgiu.

 

 Kol doleris išliks pasaulio rezervine valiuta, tam tikras prekybos deficitas gali būti neišvengiamas kompromisas." [1]

 

Ir sankcijos, ir tarifai augina godžią ir kvailą biurokratiją bei skurdina mus visus, įskaitant JAV.

 

1. U.S. News -- Capital Account: Trump Is Rethinking Economic Power. Ip, Greg.  Wall Street Journal, Eastern edition; New York, N.Y.. 06 Dec 2024: A.2.

Excessive use of financial sanctions is harmful to the USA

 

"In September, Donald Trump made an impassioned defense of the dollar's status as the world's reserve currency: "If we lost the dollar as the world currency, I think that would be the equivalent of losing a war."

That status is so important to Trump that this past weekend he threatened to impose tariffs of 100% on the Brics -- a group of emerging economies led by Brazil, Russia, India, China and South Africa -- if they created an alternative to the dollar.

The warning might be a bit premature; a Brics currency has yet to go beyond the discussion stage.

Yet Trump's defense of the dollar is a window into how he thinks the U.S. should exercise its economic power. That power, he argues, has been undercut by its excessive use of financial sanctions that encourage other countries to avoid using the dollar. He thinks tariffs are a more flexible, less harmful way of achieving American foreign policy goals.

The theory remains untested. Yet Trump's approach merits serious study, because the current approach is hardly a shining success. 

Sanctions haven't yet forced Russia to leave Ukraine, Venezuelan President Nicolas Maduro to cede power, or Iran to give up its nuclear program.

The dollar became the preferred vehicle for foreigners to trade and invest across borders because of the size, depth and stability of the U.S. economy and financial system. Network effects -- the tendency to use the dollar because everyone else does -- makes it hard for a competitor to get traction.

Reserve status enables the U.S. to borrow more, and at lower interest rates, than otherwise. It means a lot of international business flows through financial channels over which the U.S. has jurisdiction. The U.S. can cripple a foreign actor by cutting off their access to this system.

And it exercises that power with growing frequency. Almost every day the U.S. adds another entity to its sanctions list for criminal activity, terrorism, human-rights violations or association with a sanctioned regime. The U.S. currently has more than 17,000 designated sanctions targets.

But some worry the volume of sanctions could make them self-defeating. "The more that we use sanctions, we run the risk of degrading the use of the dollar as a national security tool," said Kimberly Donovan, who formerly served in the Treasury Department's Financial Crimes Enforcement Network and is now at the Atlantic Council.

In his September speech Trump attacked the ubiquity of sanctions: "Ultimately, it kills your dollar and it kills everything the dollar represents," he said. "I want to use sanctions as little as possible." He said he would hit any country that ditched the dollar with tariffs.

His weekend threat to do just that might be linked to the interest of some Brics leaders -- in particular Brazilian President Luiz Inacio Lula da Silva -- in creating an alternative to the dollar. But the South African government said this week the Brics aren't planning a new currency.

"It's hot air," said Mark Sobel, a former Treasury official. "The unity isn't there, the economic heft isn't there, and the Brics are way too divided by geopolitical tensions."

The dollar still accounts for 58% of global foreign exchange reserves, 54% of export invoicing, and 88% of foreign exchange transactions, according to the Atlantic Council.

But other countries, especially the Brics, have stepped up efforts to break the dollar's dominance. Those efforts gathered force after the U.S. and European Union froze the Russian central bank's foreign assets and barred several Russian banks from using Swift, the Belgium-based messaging system banks use to settle international payments, in the wake of events in Ukraine.

Since then, Russia and China have boosted usage of their own, alternative, payment systems. Brics countries are issuing more debt to foreigners in their own currencies. Several emerging-market central banks are working on a platform to settle payments in their digital currencies.

The surging price of gold and bitcoin -- which just topped $100,000 for the first time -- may reflect the search for dollar alternatives.

Tariffs are less likely than sanctions to discourage use of the dollar. They can be calibrated, whereas sanctions are usually all or nothing. Western nations imposed sanctions barring the purchase, transport or insurance of Russian oil above a price cap. But the cap has been "very difficult to enforce," Donovan said. "Tariffs probably would have been a more strategic and sophisticated approach."

Tariffs can be used against friendly nations while sanctions generally cannot. Trump has threatened tariffs against Mexico and Canada over fentanyl and illegal immigration. In an October opinion column, hedge-fund manager Scott Bessent, now Trump's pick to be Treasury secretary, described tariffs as a useful tool for "getting allies to spend more on their own defense, opening foreign markets to U.S. exports, securing cooperation on ending illegal immigration and interdicting fentanyl trafficking, or deterring military aggression."

But tariffs have disadvantages. Like sanctions, if overused, they can drive down trade so much the U.S. has no leverage left. Tariffs can hurt the U.S., not just the target, by raising prices, disrupting production and inviting retaliation.

A different complication is that maintaining the dollar's reserve status requires the U.S. to supply the rest of the world with dollar-based assets such as bonds. In other words, it must be a net borrower, which means it has to run a current-account deficit (the broadest measure of trade, covering goods, services and income).

Trump wants to reduce the trade deficit, which he blames on other countries, among other things, keeping their currencies low against the dollar.

So long as the dollar remains the world's reserve currency, some trade deficit might be the unavoidable trade-off." [1]

 Both sanctions and tariffs breed greedy and stupid bureaucracies and impoverish us all, including the United States.

1. U.S. News -- Capital Account: Trump Is Rethinking Economic Power. Ip, Greg.  Wall Street Journal, Eastern edition; New York, N.Y.. 06 Dec 2024: A.2.