Fisher Investments Editorial Staff
Others

A Beltway Blue Moon

By, 01/19/2011

Story Highlights:

  • President Obama wants to audit the US bureaucracy and ax inefficiencies.
  • Some beneficial change may happen, but it's more likely a marketing gimmick than political sea change.
  • Positively, that the president even perceives the need for a marketing makeover seems to herald the political moderation we've been expecting.

 

According to President Obama's recent Wall Street Journal op-ed, it's high time we whipped Washington into order. The president wants to audit the US bureaucracy and ax inefficiencies. To most responsible households, that probably sounds little more than pragmatic. An every week kind of activity—if not every day. Why is this front page news? Sadly, because it doesn't happen but once in a Beltway blue moon.

 

The rule of law is a pillar of most successful capitalist societies—that bureaucracies tend to run amok an unfortunate cost. Politicians just don't have much incentive to keep an orderly house. So what do we make of the president's message? Are we truly on the verge of some utopian "21st-century regulatory system"? (As if merely keeping pace is an incredible feat?) Well, maybe. But we won't hold our breath.

See here for a useful analysis of the president's message. He can think of one inefficient regulation (already corrected) off the top of his head—and three times that many needed new laws. Not exactly the golden ratio. The likely result? Token change writ large to back a new political marketing campaign. Image is everything in politics, and after a couple years of frantic activity, the administration needs a makeover—in this case, an efficient, business-friendly, free-market mask to see it through to reelection.

 

Positively, there's a key market driver lurking just beneath the surface. The fact the president even perceives the need for a marketing makeover—and especially one in this vein—seems to herald the political moderation we've been expecting. Before, the tone was aggressive: "No crisis should be wasted." But now, with political capital running on empty, the goal is to write "rules with input from experts, businesses, and ordinary citizens." The more the administration listens, the more competing voices it must accommodate—and the less it'll get done.

 

We may have to wait a bit for that gleaming, technology-infused 21st-century bureaucratic edifice. Luckily, a quieter legislative agenda—at least for now—is just as good.

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*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.

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