Essential Corruption

Prior to this week, Kathleen McGrade was a “contract specialist” for the State Department.  That means she had a hand in doling out million-dollar contracts.  A lot of those contracts were doled out to the Sterling Royale Group, which offers design and construction services.  Over $52 million taxpayer dollars flowed into Sterling Royale’s coffers before it was discovered that its president and vice-president are Kathleen McGrade’s daughter and husband, respectively.

The family went to great lengths to conceal its relationship.  Kathleen’s husband, Brian Collinsworth, flat-out lied about it when the Daily Caller confronted him.  On the other hand, he did leave his wedding photos posted on his MySpace page.  I guess the ethics watchdogs of our masterfully-run federal government can’t be expected to notice things like that.

Just as the public was gathering its breath for a good, old fashioned howl of outrage, the State Department sacked Kathleen McGrade.  Huzzah!  Big Government is clean once again!

Or do you think there could be more Kathleen McGrades out there?

How are those massive Obama subsidies for politically favored projects ladled out?  It’s a process that involves a lot of high-powered super-lobbyists and political connections.  Does it matter that none of them ever seem produce much in the way of energy, useful technology, or “green” jobs?  Big Government “stimulus” plans never produce the promised results, because politicians have no idea what really needs to be stimulated… but their good friends and big-money contributors have a few suggestions.  

When the government picks winners and losers in the marketplace, tossing around bailouts and penalties, what criteria are used to select the “winners?”  It’s obviously not efficiency or productivity, or else we wouldn’t be caught in a death spiral of stagnant growth, rising inflation, and sky-high unemployment. 

Turn the situation around, and ask yourself this: what if Sterling Royale really was the best company for performing all the work Kathleen McGrade slipped their way?  Perhaps they were.  They might do great work at a reasonable price… but obviously their relationship with State would never be free of the taint of corruption, even if McGrade’s relationship with the company officers was openly acknowledged.  The necessity of avoiding corruption can, itself, lead to inefficiency.  Would it be logical to exclude every company whose officers have relatives in the public sector from doing business with the government?  Given the current size of the government, is that even possible?

Politics is all about connections.  Business can be that way too, of course, but politicians are insulated from the market realities that swiftly punish bad business decisions.  Politicians depend on vital supporters and loyal constituencies, whose reward is a higher priority than the efficient allocation of government resources.  Why shouldn’t it be?  If those resources run low, they can always raise taxes – or the debt ceiling – once again.

There is no such thing as “clean” Big Government.  It will always be corrupt, no matter what ethics or campaign laws are passed.  It is inherently corrupt.  Vast amounts of power are too valuable to be kept off the market.  Rich and influential buyers will always be able to persuade politicians to sell their influence.  Demand for influence rises as the government expands, and political power becomes the most valuable resource in the land. 

Ask oil companies how valuable all their offshore crude is, compared to the political power used to enforce Obama’s drilling moratorium.  Ask someone from a corrupt subsidy failure like Solyndra, Obama’s favorite solar cell manufacturer, if any technology in their stockpile is worth more than the political connections that got them a $535 million loan guarantee from the Energy Department, with a lot of corners conveniently cut off the paperwork.

The only way to increase the honesty and transparency of the State is to reduce its size.  Clean governments are, without exception, small.  Government control of the economy, from bailing out corporate failures to subsidizing politically favored “transformative” industries, is all about neutralizing the results of competition.  The opposite of competition is corruption.  Anyone who wanted to compete with Kathleen McGrade’s daughter and husband for those State Department contracts could tell you all about it.