The federal government is a bit like that one disreputable uncle who cannot stop falling for timeshare schemes, except this uncle possesses a nuclear arsenal and the power to garnish your wages. Every few months, the family sits down, feigns profound shock, and demands to know how on earth Uncle Sam let another shady character walk off with the silverware. This week’s edition of the ongoing saga comes courtesy of the Department of Justice, which is reportedly investigating Corey Lewandowski, Donald Trump’s erstwhile campaign manager, over allegations that he leveraged an advisory post at the Department of Homeland Security for his own personal enrichment.
To which any student of economics can only respond with an exhausted, bone-deep sigh. For what possible purpose did Washington imagine advisory boards were invented, if not to offer politically connected operators a taxpayer-subsidized veranda from which to broker access? The Justice Department is treating the matter like a terrible deviation from republican virtue, but influence peddling is not a bug of the modern administrative state. It is the operating system.
Consider the Department of Homeland Security itself. Conceived in the panic-stricken days following September 11, DHS remains the quintessential monument to bureaucratic sprawl. Lawmakers took twenty-two separate federal entities, stapled them together with duct tape and patriotism, and created a gargantuan chimera whose primary achievements over the last two decades have been harassing grandmothers at airport security checkpoints and losing track of billions of dollars. When you manufacture an agency with an annual budget that dwarfs the gross domestic product of several European nations, you are not merely funding defense. You are erecting a massive, glittering honey pot.
Enter the opportunists. Whenever government assumes arbitrary control over vast swathes of commercial life—awarding lucrative defense contracts, granting regulatory waivers, and picking market winners—the most valuable commodity in town ceases to be innovation. It becomes proximity to power. In an authentic market, a businessman earns his profit by convincing sovereign consumers to part with their hard-earned dollars in voluntary exchange for a superior good or service. In the artificial ecosystem along the Potomac, profit is extracted by knowing which undersecretary can quietly reroute a grant or fast-track an approval.
This dynamic was diagnosed with surgical precision eight decades ago by Friedrich Hayek. In The Road to Serfdom, Hayek dedicated an entire chapter to explaining why the worst inevitably get on top whenever society allows the state to direct economic activity. When success depends not on producing value but on navigating the discretionary whims of political authorities, the people who rise are not the upright and scrupulous. They are the operators, the fixers, and the brazen back-slappers who understand that political pull is the ultimate form of arbitrage. Whether Lewandowski crossed a specific legal boundary is a matter for the prosecutors, but the broader mechanism of the grift is older than the republic.
Naturally, the prescribed remedy from Washington’s chattering class will be the usual assortment of performative hand-wringing. We will be treated to stern lectures on good governance, calls for expanded ethics subcommittees, and promises of stricter conflict-of-interest disclosures printed on triple-carbon forms. The administrative state will attempt to cure the disease of excessive regulation by creating yet another regulatory bureau to monitor the regulators. It is the bureaucratic equivalent of attempting to extinguish a grease fire with a bucket of hot oil.
The uncomfortable truth that neither major political party wishes to confront is that grifters cannot exploit powers that do not exist. If DHS did not possess the unilateral authority to dole out sweetheart contracts and issue regulatory mandates, having an advisory ear in the department would be functionally worthless. Nobody pays a lobbyist for access to a bureaucrat who lacks the authority to do them a favor. Until we muster the constitutional fortitude to dismantle these redundant agencies and dramatically curtail the discretionary empire of the executive branch, we are simply rearranging deck chairs on a ship built specifically to spring leaks. In the meantime, the family will keep holding its interventions, and Uncle Sam will keep losing the silverware.