The coronavirus outbreak is a problem that is far too big to be solved solely with big government alone or with the private sector alone. Whether you think highly of the federal government or think of it as particularly incompetent and irresponsible, we all need it to work well right now. But far too many parts of the federal government are falling down on the job at the worst possible time.
This morning, Politico reports: “The IRS is piling unopened business tax refund requests into storage trailers and advising companies to file by fax instead. It’s stopped answering phone calls on taxpayer assistance lines. And it’s not processing millions of paper tax returns filed by individual Americans.”
The Washington Post reported Saturday: “The [U.S. Centers for Disease Control and Prevention] facilities that assembled the [coronavirus test] kits violated sound manufacturing practices, resulting in contamination of one of the three test components used in the highly sensitive detection process.”
The first confirmed case in the United States was on January 21; the CDC required all suspected cases to send samples to Atlanta to be tested. The CDC didn’t start sending test kits to local labs until February 5. By that point, there were eleven known cases of human-to-human transmission, and God knows how many unknown cases, moving around the country.
After the CDC realized the first test kits were unusable, longstanding Food and Drug Administration regulations “created barriers to the private industry creating a test quickly” for the coronavirus.
In the federal stockpile of emergency supplies, some of the medical masks had dry rot and faulty elastic, and about 150 ventilators were broken.
On March 27, President Trump signed legislation appropriating $350 billion to be used for loans to small businesses to help them get through the crisis. It took the Treasury Department six days to send the banks 31 pages of guidance on how to loan the money. The amount of money was too small, but also it was far too complicated and slow to get out the door. JP Morgan Chase said it received 60,000 applications for loans in the first five minutes. Bank of America said it received 10,000 applications per hour. Some banks had loaned out all of their allocated funds within minutes.
No, it does not help at all when the President of the United States runs around insisting that the number of cases “within a couple of days is going to be down to close to zero,” or praises China’s “transparency” about the virus. But even if President Trump had said exactly the right thing at every point in this outbreak, we still would be dealing with these policy failures.
A point I tried to make way back in The Weed Agency is that the federal bureaucracy is not full of bad people — although it has some. What it has is a lot of people who would like to do their job better, faster, and more efficiently, but simply can’t because of the way their offices work — or who find enacting any kind of improvement is a Sisyphean task.
Federal bureaucracies are full of perverse incentives that punish those who try something new and deviate from “the way we’ve always done things.” Any experiment that doesn’t work out is seen as reason to avoid trying any new approaches. Many federal offices are hamstrung by antiquated technology — see the description above of the IRS encouraging companies to fax in their refund requests. All sorts of rules and regulations that are supposed to make sure all contracts are fair and involve no favoritism have created a slow-moving process where ordering any new equipment becomes a major hassle with piles of paperwork. A process that was designed to make sure no individual person has too much power, and that each person would be watched over and held accountable to many others, has grown and morphed into a system where no individual person has too much authority to get things done, and responsibility is so diffuse that it’s hard to point to one person at fault when something goes wrong.
And yes, the federal bureaucracy has more than its share of incompetent people who are just about impossible to fire.
And this isn’t even mentioning the managerial idiots who get appointed by the executive branch. Stefan Selig, the Commerce Department’s undersecretary for international trade under Obama, complained about the poor quality of his cocktails when traveling overseas — travel that was paid for by U.S. taxpayers.
This is one of the things that made much of the 2020 Democratic presidential primary rather maddening to watch. Candidate after candidate insisted that after raising taxes on “the rich,” the federal government could deliver miraculous results and changes to American society — with the same inefficient, sloppy, and rarely accountable federal bureaucracy that currently exists. Many candidates genuinely seemed to believe that once they sat in the Oval Office, the problems plaguing the bureaucracy would just fade away.
Even today, we see adamant denial that it is very difficult for any institution to be simultaneously good, fast, and cheap. The geniuses over at Vox warn, “the US reportedly ordered millions of N95 masks from unproven suppliers.” Yeah, that’s what happens in an emergency. The traditional federal-contracting process, which checks to ensure suppliers meet all the usual standards, is not designed to obtain supplies quickly. On average, it takes a company 18 to 24 months to secure their first federal contract.
We have a lot to do to get through this crisis and to repair all the damage. That will require a clear-eyed view of the inherent flaws of the federal bureaucracy — and not naively believing that the same system will suddenly deliver dramatically better results with a new president.