Win McCormack: The main thing I took away from The Wrecking Crew is that Republicans are doing the same thing now, and on a scale that would have been unimaginable previously, even in Hanna’s day. And, as you point out, they are doing it partly by giving business the opportunity to make money off of government, and then businesses give a kickback, so to speak, from what they are making.
Thomas Frank: This is the thing that people don’t get about Washington, and that it took me a really long time to understand as well: the idea of “government by contractor.” I think I probably read something about it, but I really didn’t grasp it until I started driving around the city and looking at the office buildings. Whose names are on the office buildings? Why are there six General Dynamics office buildings in the Virginia suburbs? It is not just them. It is Boeing, SAIC. The big federal contractors don’t just contract for the Department of Defense, they contract across the board, whether it is Homeland Security or the EPA. All the contracts go to the same contractors.
WM: How does this impact the federal budget, do you think?
TF: The Bush administration has presided over this dramatic increase in federal spending. They haven’t raised the taxes to pay for it, but they have blown the money down the money chute. The fascinating thing is that they haven’t increased the size of the federal work force. So who is doing the work? Well, it is the contractors. That industry has boomed, and that is what has made Washington so wealthy.
Contracting is fascinating to me because we know so little about it. These are private companies. They don’t have the kind of accountability that a federal agency does. You can call up on the phone and demand to know what they are doing, and they are not going to tell you. Whereas with a government agency, they will tell you, or you can do a Freedom of Information Act request, or find out through your congressman. There is accountability if it is federal workers, but if they have just sent the money off to the private sector, they have already limited the amount of oversight that you can do.
WM: We are talking, aren’t we, about “FEMAtizing” the federal agencies?
TF: Yes, and about the failure of the private sector model, the government by contractor, which you see most pointedly in Iraq.
The first thing to note is that these conservatives deeply mistrust career civil servants, and deeply mistrust the institutions of the federal government, with the exception of, say, the military and a couple of others.
WM: But do they even trust the military? We have Blackwater and all the paramilitary contractors they have brought into Iraq. I have read that there are as many of them as there are U.S. combat troops in the country.
TF: That’s exactly right. That is the way of avoiding the political costs of a war like this. Anyway, I was interviewing this one very senior civil servant, and in our conversation he would say such and such an agency had been “FEMAtized,” and then we would talk about some other agency, and how that agency has been FEMAtized also. What he meant by that was that the agency had lost its morale. Its senior employees had taken early retirement or gone into the private sector, a very common thing to do here.
The government is contracting everything out, and the contractors often get paid more than the federal employees to do the same work. The contractors actually come to work in the federal office building, sit next to the federal employees, and there is no distinction made between them except that the contractor is paid more. And so the civil servants make the rational, self-interested, correct decision that if the guy in charge of the organization—the president—constantly badmouths you and talks about how federal employees can’t get anything done, and they pay better in the private sector where your work is going anyway, it is totally rational to move over to those companies in northern Virginia. That is who is doing the work anyway.
WM: In Washington this is sometimes called, I think, the “revolving door.”
TF: Yes. You find this all over the place. Sometimes it can be very sinister. On the one hand, there is the kind of demoralization of the federal workforce, and there are all sorts of statistics about this. A lot of the most disturbing ones come from the Reagan era; in the Bush era, they have just done what the Reagan people did, but more thoroughly and with less oversight. When Reagan did it, it was novel and the newspapers screamed. They started laying people off at federal agencies and firing senior personnel, or putting them in places where they had nothing to do with policy, replacing career personnel with some political type. All of this was very shocking when Reagan rolled it out. When Bush started doing it again, it was not shocking. It gets covered in the media, but you really have to dig if you want to find it, and when you talk to the federal employees themselves, they are just exhausted. This has been going on for a very long time.
WM: Do you think the Republicans came into office, either in 1980 or 2000, with the intent of making money off the government for their supporters, their financial supporters, or that they stumbled upon this possibility at a certain point, and then started to run with it?
TF: I don’t know how they think about it. There have been some remarkably candid statements. Bush himself says government should be “market-based.” They talk about how a government by contractor is superior to government by civil servant. People have said that you use contracting to reward your friends and punish your enemies, but the guy who said that most bluntly, former HUD Secretary Alphonso Jackson, then retracted it.
They are never completely open about what they are going to do, but when they get in, they always go back to the same set of practices. I don’t think there are any blueprints out there for it. It would be funny if there were. If so, I would not need to write this book.
WM: Maybe it is just a series of experiments. But the application of it to Iraq is very interesting to me.
TF: Yes, because there they have a whole country to remake.
WM: I understand that one of the reasons contracting has worked so badly there is precisely because they have not used local contractors for most things. For example, the infamous electricity, which still doesn’t work, could have been working almost immediately if they had used local contractors, or even if they’d used Iranian contractors, who are nearby, after all.
TF: That seems like such an obvious mistake I can’t believe anyone made it. If you really want this country to succeed, you have got to get its people back to work. Instead, it was just another way of shoveling the money to these American contractors, who then subcontracted the work to the lowest bidder. They bring in the labor from somewhere else, and the Iraqis, the people who actually live there, can go to hell.
WM: Even when they hire non-American workers, they bring in slave labor from other countries.
TF: From Nepal, India, and Pakistan, is what I read. It is a very depressing story.
WM: So, maybe they didn’t really care very much about Iraq and making it into a thriving economy and shining democracy? You think?
TF: I think that is probably right.
Comment on it