The Breaking Point

by James Dale Davidson

  7 http://www.cdejager.com/wp-content/uploads/2008/09/2010-Grand-Min-JCosm-8-19832.pdf.

  8 See http://www.weatheraction.com.

  9 http://www.theglobeandmail.com/news/national/healthy-polar-bear-count-confounds-doomsayers/article4099460/.

  10 Singer, Fred S., and Dennis T. Avery, Unstoppable Global Warming: Every 1,500 Years (Lanham, MD: Rowman & Littlefield, 2007).

  11 See Ravilous, Kate, “Mars Melt Hints at Solar, Not Human, Cause for Warming, Scientist Says,” National Geographic News, February 28, 2007, http://news.nationalgeographic.com/news/2007/02/070228-mars-warming.html.

  12 Tainter, Joseph, The Collapse of Complex Societies (Cambridge: Cambridge University Press, 1990).

  13 http://hockeyschtick.blogspot.com/2013/12/new-paper-predicts-another-little-ice.html.

  14 http://www.safehaven.com/article/25038/is-a-water-war-between-india-and-pakistan-imminent.

  15 http://www.governmentattic.org/18docs/CIAclimateResearchIntellProbs_1974.pdf.

  16 “A Study on Climatological Research as It Pertains to Intelligence Problems,” 25.

  17 Ibid., 24.

  Chapter Thirteen

  The Deep State

  Crony Capitalists with Guns

  There is another government concealed behind the one that is visible at either end of Pennsylvania Avenue, a hybrid entity of public and private institutions ruling the country according to consistent patterns in season and out, connected to, but only intermittently controlled by, the visible state whose leaders we choose.

  —Mike Lofgren, “Anatomy of the Deep State”

  In case you missed it, former Capitol Hill staffer Mike Lofgren created a sensation with his essay “Anatomy of the Deep State,”1 delineating the contours of the Deep State. Bill Moyers devoted an entire program to discussing Lofgren’s account of “the big story of our time” on February 21, 2014. Literally dozens of articles have appeared since then analyzing some aspect of Lofgren’s argument.

  He says that a hybrid entity of public and private institutions—a latter-day version of President Eisenhower’s military-industrial complex—“is effectively able to govern the United States without reference to the consent of the governed as expressed through the formal political process.” The Deep State has carved out an autonomous orbit apart from the checks and balances of constitutional government.

  As reported by the Washington Times in 2006, when National Security Agency (NSA) whistleblower Russell Tice offered to testify before Congress on unconstitutional and unlawful spying on American citizens, the NSA sent him a letter stating that while he had the right to testify before Congress, the intelligence committees that he wanted to testify to were not cleared for the programs he wanted to discuss. Absurdly, the NSA considers its programs too top secret to be divulged to Congress.2

  But meanwhile, consulting firm Booz Allen Hamilton brags on the third page of its 2012 annual report that 49 percent of its 25,000 employees hold “top secret or higher” security clearances. Booz Allen Hamilton is paid billions of dollars to know all about the NSA’s secret programs, even to design and implement them, but members of Congress only know what the Deep State cares to tell them.

  In 2007, Jay Rockefeller, former chairman of the Senate Intelligence Committee, explained that despite his position in the Senate Intelligence Committee, he only received the information that “they” allowed. As he put it, “Don’t you understand the way Intelligence works? Do you think that because I’m chairman of the Intelligence Committee that I just say I want it and they give it to me? They control it. All of it. All of it. All the time. I only get—and my committee only gets what they want to give me.”3

  Equally, Tea Party stalwart Congressman Justin Amash (Republican Michigan) says of the NSA: “You don’t have any idea what kind of things are going on. So you have to start just spitting off random questions. Does the government have a moon base? Does the government have a talking bear? Does the government have a cyborg army? You don’t know what kind of things the government might have, you just have to guess and it becomes a totally ridiculous game of 20 questions.”

  Whether You Like It or Not . . .

  But that is not all. As my beautiful wife puts it, elected officials only ostensibly run the visible government, as outlined in Civics 101. She says they are merely Muppets who do the bidding of the Deep State, the people George W. Bush referred to as “the deciders”—a fascinating phrase from a former president who was twice elected by voters who naïvely assumed that Mr. Bush would be the “decider” so long as he inhabited the Oval Office.

  Apparently not.

  As a Washington insider, Lofgren has never met my wife, but he is well placed to document the truth about the Deep State. He came to Capitol Hill in 1983 as an aid to Republican John Kasich, a rising star in the House of Representatives. Lofgren stayed on with Congress for twenty-eight years, ending his career in 2011 as the chief Republican analyst for military spending on the Senate Budget Committee.

  From that vantage, Lofgren was able to report as a matter of fact that the Deep State has first dibs on your money. In his “Anatomy of the Deep State” essay, he describes how the government spent $1.7 billion since 2007 to construct a building in Utah, the size of seventeen football fields, in which the NSA plans to store a yottabyte—the largest numerical designator computer scientists have yet coined—of information. This massive storage capacity has been implemented to archive every single trace of our electronic lives. Of course, there are many more illustrations of the primacy of the Deep State in spending the resources siphoned out of your pocket.

  The Washington Post quoted George S. Hawkins, general manager of the Washington, DC, Water and Sewer Authority, lamenting the deterioration of the infrastructure under the streets of the nation’s capital. He presides over a “decrepit system” of 1,300 miles of water pipe and 1,800 miles of nineteenth-century sewers.4 Leaky pipes lose an average of 25 percent of drinking water before it reaches the faucet. And every year, Washington’s sewage system, built in 1889, flushes three billion gallons of raw sewage into the Potomac River and its estuaries.

  Yuck.

  Emergency crews are busy around-the-clock patching an average of 450 breaks a year. “All the big cities have these problems, and to me it’s the unseen catastrophe,” Hawkins said. There is no money to repair or upgrade the water and sewage systems in Washington and the other 771 US cities with water infrastructure on its last legs. But the Deep State had no trouble coming up with $7 billion to rebuild the sewers of Baghdad.

  Lofgren points out that Washington, DC, is the geographic headquarters of the Deep State. A partial explanation for the apparently puzzling fact that the denizens of the Deep State would prefer to spend $7 billion making sure that the toilets flush in Baghdad rather than in their own hometown is that they are only incidentally in the infrastructure business.

  George S. Hawkins may play a crucial role in keeping Washington functioning, but he probably doesn’t have a top-secret security clearance. If some of the trillions that are lavished on national security budgets were reallocated to repair decrepit infrastructure in the United States, Hawkins’s days and nights would pass more easily, but the 854,000 contract personnel with top-secret clearances who feast on taxpayer largess would do less feasting.

  For one thing, an appropriation of $1 trillion or more to repair and upgrade domestic water and sewer systems would necessarily be open to more competition than Deep State firms faced in Baghdad. Every construction and civil engineering firm in the United States would be eligible to participate, along with many large international firms, such as MACE of Abu Dhabi and Muna Noor Engineering & Contracting of Muscat, Oman. Such firms, experienced in building water projects in the desert, would be far more difficult to exclude from the bidding process if top-secret clearance was not required as a condition for participating.

  Seen in this light, the secret clearance required to cash in on Deep State contracts is an effective crony capitalist mechanism for mi
nimizing competition and controlling markets.

  And that is not all.

  Because there would be more competition over the tenders for civilian water and sewer projects, profits would be lower. The firms winning the contracts would also be subject to more exacting completion standards than they faced in the chaos of Baghdad.

  James Glanz summarized what happened in Iraq in a 2007 New York Times article, “Bechtel Meets Goals on Fewer than Half of Its Iraqi Rebuilding Projects.”5 Quoting an Inspector General’s report, Glanz wrote that the new audit revealed landfills that were never dug, fiber-optic networks that were never completed, and sewage treatment facilities that never worked as planned.

  With civilian contracts to build water and sewage facilities in the United States there would be no chance for contractors to collect millions while just going through the motions and failing to complete facilities and other major infrastructure projects.

  Lofgren highlights another telling aspect of the rule over America by the Deep State: when President Barack Obama does the bidding of the deciders, he has more or less free reign to completely ignore the Constitution. The tattered remnants of constitutional checks and balances, however, were briefly strong enough to bind Obama and frustrate his wish to appoint Dr. Vivek H. Murthy as US Surgeon General. He could tell the generals in the Pentagon to kill almost anyone on the globe on his own say-so, but he barely had the power to install his own candidate in the ceremonial office of Surgeon General.

  I offer four observations:

  1. There is little hint that recent political leaders heeded the prophetic warning against the dangers of subordinating the United States to the Deep State that President Eisenhower articulated in his farewell address to the nation on January 17, 1961. Lofgren tells us that apart from “gadfly Senator Rand Paul of Kentucky,” congressional Republicans have been largely silent about the rise of misplaced power that Eisenhower feared.

  2. Equally, there is no evidence that the Deep State deciders are directly dictating public policy in realms other than national security. For example, there seems to be no Deep State line on whether Tesla should be banned from bypassing dealer networks and selling cars directly to consumers. Nor is there apparently a Deep State diktat on Obamacare, high fructose corn syrup, or sugar subsidies. And notwithstanding the importance of preserving the dollar’s status as the world’s reserve currency, there appears to be only an uneasy alliance between the Deep State and the bankers lobby that controls US monetary policy. In the meantime, be aware that “the subsurface part of the Deep State iceberg” has mostly been content to float along on the ocean of red ink that is the consequence of the deciders’ own efforts, and those of others, to spend uncounted trillions out of an empty pocket.

  3. Mancur Olson’s argument in The Rise and Decline of Nations is directly relevant to the triumph of the Deep State.6 The emergence of its leaders as the deciders, who pull the puppet strings controlling the Muppets, accords with the logic of Olson’s argument. In any stable human society with settled borders, he said, distributional coalitions and lobbies tend to accumulate over time, with parasitic intentions. He believed that groups with the organizational incentives and coherence to capture the state for their own profit would not stop short in their plunder until they had totally destroyed a country’s economic vitality. Unfortunately, Olson died in 1998, long before the Tea Party was ever heard of. Yet he could not have imagined a circumstance where powerful special interest lobbies, like those comprising the Deep State, would share the interest of some citizens in reforming government finance. He doubted that those groups with the power to enact policies and programs that benefit themselves at the general expense would forgo any benefit they might otherwise have won out of public-spirited concern for the solvency of future generations.

  In fact, Olson personally told me in the 1980s, while I was laboring to enact a balanced-budget requirement in the US Constitution, that even if I succeeded, I would fail. In his view, the desire of special interest lobbies to benefit from runaway deficit spending was stronger than the Constitution.

  He cautioned that “the scarce resource of respect for the Constitution” would be swept away by the powerful groups who would pay no more attention to a restriction on their ability to empty your pocket than they have to constitutional niceties that ostensibly prohibit the government from tapping your phone or reading your email word-for-word without a warrant.

  4. Olson’s argument explains why the Deep State puppet masters have no interest in, or respect for, upholding the general interests that all citizens share. It also explains, however, why they might be obliged to take account of and heed the interests of other smaller “privileged” groups. Olson’s “privileged” groups are privileged in an organizational sense. They are groups in which members have an incentive to see that the collective good of their group is provided and that it will be obtained, even without any group organization or coordination. In other words, unlike the encompassing general interest, which Olson tells us will not find representation in the political process, smaller privileged groups will be represented. So if a burdensome tax is proposed that will reduce the real living standards of millions of people by $100 each, Olson tells us that those millions will be unable to organize in order to achieve the collective good of defeating that tax. By contrast, if burdensome taxes were proposed that would cost one hundred people millions of dollars apiece, the smaller, privileged group of one hundred multimillionaires or billionaires would probably be able to defeat the tax. Unlike the encompassing general interest, smaller privileged groups will be represented in the political process, even if there is no obvious organization or explicit coordination undertaken on their behalf.

  So whose interests would you expect to be represented, or at least accommodated, by the denizens of the Deep State?

  Certainly not the general interests that you share with other citizens, common human betterment or even the survival of civilization itself. In Olson’s The Logic of Collective Action, he discusses the ideas of George C. Homans, author of The Human Group. Homans tells us that past civilizations, and perhaps even our own, might have been saved if large-scale cooperation could have been organized with the same cohesion found in small groups. Yet Olson tells us this can’t happen. He writes, “It does not follow that because the small group has historically been more effective, the very large group can prevent failure by copying its methods.”7

  If you are one of millions poised to lose $100 to an annoying new tax, for example, you cannot thwart its enactment by pretending that you are a billionaire and personally hiring a battery of influential lobbyists. Billionaires can prevent themselves from being taxed on that basis. You can’t. That is why an accumulation of antimarket distortions could cost you and every member of your family $125,000 in lost income annually.

  Equally, if you assume that the Deep State deciders have no political ideology whatever, apart from a commitment to prying as much loot as possible from the political process in the guise of national security, the most logical way for them to go about it is to see that the cost of their appropriations is passed on to you and not to those with a greater capacity to fight them.

  It would make no sense for the Deep State to risk antagonizing other privileged groups that possess the incentives and resources to rival their political power. Consequently, they tend not to pick fights with other vested interests. The deciders more or less leave other privileged groups to scramble for whatever dollars they can squeeze out of a nearly bankrupt political system.

  That is not to say, however, that the deciders of the Deep State may not lend support to policies and programs of other vested interests in cases where doing so seems to increase the resources the Deep State can capture.

  This logic helps explain why there tends to be a single economic orthodoxy ruling America—a not always logical amalgam of arguments and rationales favored by the various privileged groups of crony capitalists that control the political process. Even before Richard
Nixon proclaimed, “We are all Keynesians now,” military Keynesianism had fattened the coffers of the Deep State.8

  The United States now spends more than every other country combined on the military. And our stated expenditures comprise only about half the real costs. Hundreds of billions in annual military outlays are hidden in the budgets of the Departments of Energy, Homeland Security, State, and Veterans Affairs.

  But enough is never enough. There are massive new weapons systems on the Pentagon’s drawing board that would add trillions more, such as the Littoral Combat Ship and the F-35 Joint Strike Fighter. the F-35 alone is expected to cost $1.5 trillion—enough to cover Russia’s entire military budget at current levels for the next thirty-seven years. David Crawley helps explain why military equipment costs so much:

  I worked for a company that sold a microchip to the military for more than $2k per chip. This chip would have sold to a civilian contract for about 30 cents, but we never sold it to civilians as it was such an old technology (about 20 years old) that no civilian wanted to buy it . . .

  The cost to re-qualify to a lower cost part was about half a billion dollars (all that paperwork remember). We were just one of thousands of line items of parts that were too small for congress to notice. So we absolutely price gouged like crazy. Contrary to what other people answering this question might claim the part was not more reliable, or somehow magically better, it was actually quite a lot worse than alternatives. Imagine that happening thousands of times over on millions of small parts that make up hundreds of big contracts and you can see why the American military is the most expensive in the world by far.9