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Hillsdale College Hillsdale, Michigan 49242 Vol . 10, No . 5May, 198 1

IS WASHINGTON NOW A CITY OF HOPE ?

By Edwin J. Feulner, Jr .

Edwin J . Feulner, Jr . is President of The HeritageFoundation, which is a Washington-based, tax-exempt ,public policy research institution dedicated to the prin-ciples offree enterprise, limited government, individua lliberty, and a strong national defense .

He formerly served as the Executive Director of th eRepublican Study Committee in the U .S. House ofRepresentatives, as the Confidential Assistant to Secre-tary of Defense Melvin R . Laird, as AdministrativeAssistant to U .S. Congressman Philip M . Crane, andas a Public Affairs Fellow at the Hoover Institution atStanford University and the Center for Strategic an dInternational Studies at Georgetown University .

He is the author of a monograph entitled Congres sand the New International Order, editor of the antholo-gy China - The Turning Point, co-author of Tradin gwith the Communists, and a contributor to nine othe rbooks and numerous journals, reviews and magazines .He is the Publisher of Policy Review, a ContributingEditor of The Intercollegiate Review, and scholarlyarticles by him have appeared in the Southern Eco-nomic Journal, Euromoney and Il Politico . Featurearticles by Mr. Feulner have appeared in the ChicagoTribune, San Diego Union, Los Angeles Times, Rich-mond News Leader, and many other major metropoli-tan newspapers . His weekly syndicated column has wo na Freedoms Foundation Award and appears in morethan 500 newspapers .

He has studied at the London School of Economics ,the Wharton School of the University of Pennsylvani a(MBA), Georgetown University, Regis College (BS) ,and the University of Edinburgh.

Mr. Feulner delivered this presentation at Hillsdal eduring the Center for Constructive Alternatives semi-nar, "Washington's New Leadership : Will It Make aDifference?"

Whenever a speaker asks a question in the title of a

lecture or an article, the listener or reader may assumethat the answer will be "yes"—otherwise he wouldn' thave asked the question . I suppose my answer tonigh twould have to be "yes, but . . . . "

"Yes, but . . ." to some extent at least, we conserva-tives will be disappointed . Former Senator James Buck-ley wrote a book in 1975 entitled If Men Were Angels .Unfortunately, most men are not angels and mos tpoliticians certainly are not . Therefore, we canno tassume that because there has been a sea change in thepolitical scene, that Washington will be a city of hope ,that as conservatives we will have all of our proposal simplemented, or even that things will necessarily begoing our way in the months and years ahead .

Why then is Washington now a city of hope? No tjust because of what happened on November 4 . Moreimportantly because, as in the title of Richard Weaver' s

im•pri•mis (im-pri-mis) adv . In the first place . Middle English ,from Latin in primis, among the first (things) . . .

IMPRIMIS is the journal from The Center for Constructive Alter -natives . As an exposition of ideas and first principles, it offer salternative solutions to the problems of our time . A subscriptionis free on request .

book Ideas Have Consequences, John MaynardKeynes' quotation is appropriate: "Practical men, whobelieve themselves to be quite exempt from any intel-lectual influences, are usually the slaves of some de-funct economist . "

Professor F. A. Hayek said it another way : "Theideas which are changing our civilization respect n oboundaries . " Professor Hayek recently told me that thetwo most recent requests for translations of The Road toSerfdom, his seminal work published in 1944 (c . U . ofChicago 1944), had come from the underground inPoland and the Soviet Union .

Milton Friedman recently returned from Mainlan dChina, where his book Free To Choose is now bein gtranslated into Chinese . (Regrettably for the authors ,these editions will not respect the international copy -right convention—no royalties—but they clearly sho wthe power of ideas . )

Comprehend the enormity of this—Hayek bein gtranslated into Russian and circulated through th eunderground and Friedman being translated by a quasi -governmental entity in Mainland China. Changes lik ethis are mindboggling .

Leopold Tyrmand reaffirmed the significance o fideas in his excellent article in The Wall Street Journa lon Inauguration Day, when he referred to a long-tim efriend of Hillsdale College—the late Professor Ludwi gvon Mises—as one of those seminal thinkers wh oinfluenced President Reagan .

With the recognition that ideas do have conse-quences, the question arises as to how ideas make thei rway into the Washington political process . Dr. RhodesBoyson, a British Member of Parliament who has bee non the Hillsdale campus on several occasions, sum-marized the process best in a very important issue o fyour own publication, Imprimis, in 1977 . Dr. Boysonidentified the six factors responsible for the genesis o fan idea and its development through the political pro-cess .

1. Seminal thinkers—the Hayeks, the Friedmans ,the Karl Poppers, the Richard Weavers . The thinker swho today, by and large, are at universities or at one o fthe major think tanks .

2. Popularizers—the serious journalists, the organi-zations like my own, The Heritage Foundation, th epublications like Imprimis, and the organizations likethe CCA and the forum it provides for discourse o nthese important subjects . The popularizers or "th esecond-hand dealers in ideas" are critically important .

3. Pressure groups—the trade associations, the lob-bies, the Moral Majorities, and the political actioncommittees . Recent boycotts, tax revolts, and th eresults of last November's election—all attest to thegrowing influence of pressure groups and their abilityto translate "popularized" ideas into political action .

4. Political parties and politicians—the politica lactors who can be galvanized into action by the pres-sure groups .

5. Accidents—history has been said to be largely thestory of some men being in the right place at the righttime, and of other men being in the right place at th ewrong time . Former President Carter was a primeexample . Because of its dealings with foreign nation sand its handling of domestic policy issues, the Carte rAdministration was generally perceived as being in -competent . Mr. Carter's political fortunes were severe-ly damaged by the inopportune timing of the Irania n

revolution . The Administration's general incompetenc eand the "accident" of Iran led many Americans tobelieve that there had to be a change ; we just couldn' tafford "business as usual" any longer .

6. Implementation—we saw this change in attitud eexpressed in the election results in November, and wil lnow see some of these evolving ideas translated int oactual policy . The voters asked for a change in Novem-ber. I believe they wanted a radical conservativ echange .

But the obstacles which must be surmounted beforean idea is finally incorporated into law in this fina lstage are often greater than the initial difficulties in-herent in refining a concept and gaining public accep-tance of it . A recent battle within the foreign-ai dbureaucracy illustrates what can happen when one suc hproposed, radical change threatens bureaucratic turf .

President Reagan during the campaign expressedsupport for a streamlining of our foreign aid programs .During the transition, I headed the foreign assistanc etask force which sent 10 people into the agencie sinvolved shortly after the election . We sat in a suite inthe Agency for International Development bureaucracyand tried to ensure that officials did not commit th enew administration to policies it wouldn't endorse . We

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also tried to keep the incumbents from taking politica lappointees and rolling them into career status in thecivil service .

In the meantime, our task force prepared reports fo rthe new administration, recommending a change i ndirection with respect to foreign aid . One of the firs tthings we decided was that a new bureaucracy calle dIDCA had to go . (If you have never heard of IDCA ,don't feel bad . I had lived in Washington for 15 yearsbut hadn't heard of it until I went in and met it sdirector . )

IDCA is the International Development and Coopera-

thought the elimination of IDCA would be a goodsymbol, especially if we could get rid of it beforeJanuary 20, 1981 .

But IDCA director Tom Ehrlich told us to give hi sagency a chance to prove itself . So we asked him whatit had accomplished in its first two years . Other thanthe formation of a staff, the only achievement whichEhrlich could cite was the agency's successful figh tagainst a move to banish it to Haines Point (a site aboutthree miles from the State Department and hence con-sidered a bad location from the bureaucratic point o fview) .

tion Agency, and it is a living, bureaucratic tribute t othe late Senator Hubert Humphrey . The Humphrey ideawas to gather all governmental foreign aid program sunder one umbrella and place it under the direction of ahigh-level appointee, who would have direct access t othe President, and who could coordinate all of ou rforeign aid activity . That was the theory in 1975 befor eSenator Humphrey died . It didn't quite work out thatway .

Shortly after IDCA's creation, the Internationa lMonetary Fund, the World Bank, the Internationa lDevelopment Agency, and the three regional develop-ment banks, were all removed from IDCA's jurisdictionby the Treasury Department, which did not want t ogive up jurisdiction over them . (Remember that one o fthe reasons for creating this new layer of bureaucrac ywas to bring together these separate agencies with al lthe other elements of foreign aid .) IDCA ended u psupervising three agencies, including the Agency fo rInternational Development .

We listened to Mr . Ehrlich, but didn't go along withhis ideas . So we asked the general counsel of AID todraft a memo on how to eliminate IDCA . He was alogical person to ask, because AID does not like IDC Asince it removed AID's direct access to higher leve lpeople . (This is the process known as using the creativ etension within government to fight against itself . )

We then started talking with some friends on Capito lHill, primarily Senator Jake Garn (R-Utah) on theAppropriations Committee, whom we hoped wouldintroduce an amendment to cut off funds for IDCA asof April, 1981 .

Hope was springing eternal . The word got out—andwithin 48 hours Secretary of State Alexander Haig ha da letter from the Democratic chairman of the Hous eForeign Affairs Committee, protesting the eliminatio nof IDCA. Several senior Democrats in the Senatereceived phone calls from Mr . Carter asking them t oplease save IDCA . Other pressures were applied, an dour task force beat a hasty retreat from the legislativ earena .We recommended that AID be returned to the State

Department and that IDCA as a separate entity be

Our substitute strategy was outlined i nabolished . The latter seemed an easy task, since IDCA from the general counsel of AID . It toldhas an annual budget of only $5 million and about 50 eliminate IDCA, partly by reorganization and partly b yprofessional employees . We on the transition team legislation . Within two days, that memo was in th e

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the memous how to

hands of the general counsel of IDCA, who had avested interest in seeing that his organization stayedaround . (Remember, this was a Presidential appointeewho knew he would be leaving in five weeks . But it isan ignominious end to one's government career to seehis agency dismantled . Who wants to say he served a sthe general counsel for an agency that no longer exist sand to be too embarrassed to hang his Presidentia lcommission on the office wall?)

Instead of arguing directly with the AID genera lcounsel, the IDCA general counsel wrote the AssistantAttorney General of the United States to say that AID' sgeneral counsel had fought unfairly—he had supplie dthe transition team with a memo on how another agencycould be abolished, and, in effect, had trespassed o nIDCA's turf . The AID general counsel's response tothe Assistant Attorney General of the United States wil lgo down as a Washington classic . Let me quote on eparagraph from that letter :

Dear Mr. Harmon :Imagine but for Jonathan Mark's letter to you o f

January 8, I might have finished out my tour hereon January 20 without once more having t oaddress the relationship between AID and IDCA .Indeed, I might have gone to the end of my day swithout such an opportunity . After more than 1 5years in Washington, at different times of my life ,I have observed a phenomenon of unnatural selec-tion whereby normal and reasonably bright peopl elearn in successive stages to focus their energieson matters that become increasingly less and les srelevant to normal concerns of folks outside ofWashington. It is a transmogrification resulting i nwhat might be termed "intellectual pigification . "Doubtlessly the cathartic effect of quadrennia lelections relieve some of the pressures . I wouldcertainly hope my own departure from the officia lscene will be a not totally insignificant contribu-tion .

He went on to defend the action of providing us wit hthe memo. But I think that one paragraph correctl ydescribes a lot of what is wrong in Washington .

Back to IDCA . Garn did not introduce the amend-ment, so before our final report was submitted o nDecember 22 we were already controversial, becaus ewe tried to remove this one tiny piece of overwhelming'ederal bureaucracy . Holmes was right—it truly is re-narkable how perverse and distorted things becom ewhen viewed from Washington .

These are the kinds of problems conservatives are u ptgainst in Washington . This incident shows why ideashat made their way through the first five stages can bestymied in the sixth . Ideas can also be stolen an d)erverted through the political process . If that happens ,t concept originally advocated by conservatives might)e turned inside out and conservatives might end u plaving to oppose the concept .

An idea we have been pushing at The Heritag eFoundation is that of "enterprise zones." It is based onthe premise that inner-cities can be revitalized b ycreating within them havens from both governmenttaxation and regulation . Take an area of, say, onesquare mile of the South Bronx . Remove governmen tsubsidies, but at the same time remove governmentconstraints from it—remove the minimum wage law ,remove OSHA regulations, remove burdensome taxa-tion and regulations .

When Heritage first introduced that idea to th eUnited States about two and a half years ago, one o fthe first people to become enthusiastic about it wasRepresentative Jack Kemp (R-New York) . Jack is notonly a captivating and articulate speaker for conserva-tive beliefs, but also a practical politician . But one ofthe first things he decided was that if "enterprisezones" legislation was to go anywhere, it would nee dmore than a conservative Republican as a prime spon-sor. He also needed a liberal Democrat . Kemp enliste dRepresentative Bob Garcia, who fit the descriptio nperfectly . He is a liberal Democrat from the SouthBronx .

But by the time Kemp enlisted Garcia's support forhis bill, they had eliminated the deregulation part of th ebill . Instead of what we originally called "enterpris ezones," what was finally introduced more appropriatelycould be called "subsidy islands ." The concept hadbeen changed to emphasize tax incentives for busi-nesses to move into these areas . Some key staff aide sare now working with Kemp and Garcia to see if the ycan put a little substance back into that bill to make i tmeet its original objectives . We must guard against thi skind of perversion of some basically sound conserva-tive ideas .

Another problem is the normal process of bureau-cratic co-option :

• Candidate Ronald Reagan says : Abolish theDepartment of Energy; The Heritage Foundation Man -date for Leadership study outlines three easy steps toabolishing the Department ;

• So President Reagan says abolish the Departmentof Energy ;

• But Energy Secretary James Edwards says, w earen't really going to abolish the Department of Ener-gy—we're going to reorganize it .

I don't believe watering down the options is what th evoters on November 4 were telling us to do . Unfortu-nately, in some respects, diluted seems to be what th eresults are becoming . And here we have lost sight o fthe objective—to eliminate the Department of Energybecause it was an extra layer of bureaucracy that i sexpensive, unproductive and unnecessary .

But the rationalization put forth for preserving thi sdepartment reminds one of a dictum attributed to Paul

Anderson, who said, "I have yet to see any problem ,however complicated, which when looked at the righ tway, could not become still more complicated ." Theoutcome could be different, however, if everyone wereasked to sacrifice some of the goodies which help him .As Professor Martin Feldstein has pointed out, it i sabsurd for his daughter's school lunch to be subsidize dby the federal government . Similarly, if we all becomeless protective of those programs which help us direct-ly, but whose need is questionable in this time o fsevere economic dislocation, we can eliminate som efederal goodies for the common benefit . In otherwords, if everyone's approval is secured—if we are al lasked to sacrifice—we can get the federal budget unde rcontrol .

Conservatives do have a grasp of positive marketing ,and, as conservatives, we should overcome the impres-sion that we are always negative. We can do this b ypromoting "enterprise zones" and other positive initia-tives, but should acknowledge that conservatism in th epolitical realm is inherently and necessarily negative . Itis "negative" because as conservatives we do no treceive satisfaction or fulfillment from the politica lprocess . Instead, we look for it within the individua land within the substructures of society .

Conservative legislation is not a series of panaceas t o"solve" or "cure" big problems . Rather, our bills ten dto cut, to decrease, to roll back—not to come up wit hdramatic new solutions to the problems of the day . Thepositive side of our approach, however, is that i tprotects the liberty of the individual from too muchgovernment . It gives the individual more opportunit yfor free choice—to make his own decisions and not t ohave them made by the state . The conservative advo-cates pluralism—to enforce competition where there i smonopoly; to encourage alternatives where there is con -formity; to achieve choice where there isn't any .

One of the big challenges of conservatives will be toproject more positive ideas, more positive alternative sin a radical way . As conservatives, we have to beradical . One of the reasons for this is because thing schanged on November 4 . Conservatives no longer hav ethe luxury of fighting a guerilla war . We are now theEstablishment . Rightly or wrongly, despite the fact tha tthe House of Representatives is still in the hands of th eDemocrats, we are perceived as "being in charge . "Whether we win or lose, we are going to be praised o rblamed . Therefore, over the next four years we have t orefine our conservative ideas, reach out to all sectors o fsociety, and vigorously promote radical changes .

In view of this rather gloomy picture, you might as kwhy I am still hopeful . I'll cite several reasons fo roptimism: (1) In the realm of ideas, the national new smedia are taking conservative ideas seriously, as the ynever have before . For example, The New Republi crecently noted the rise of conservative intellectuals an dsaid that what the liberals need is their own version of a

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Heritage Foundation . Our ideas are being taken serious-ly, and ideas do matter .

(2) There are people in the new government likeDavid Stockman. Stockman was a radical in the 1960sand Stockman knows how to fight . He will not besatisfied with "business as usual ." Other appointees a tthe secondary level have come up through the ranks o fconservative thinkers and were activists in the '60s and'70s, when the conservatives were badly outnumberedon the college campuses and when it wasn't at all chi cto be a conservative . We conservatives have had t oargue against the liberal orthodoxy . Our arguments aresharper, our positions more rigorous . Now, with manyof our people in the government's policymaking posi-tions, we can make a real difference .

(3) As never before, conservatives are in a positio nto scrutinize the White House at close range . Heritage' sMandate for Leadership volume has 600 specifi crecommendations . It is a measuring rod for the newadministration's performance . (This is not to imply thatthe conservatives will ever get 100 percent of what wewant . It would be unrealistic to believe that through th epolitical process we ever would get all that we want . )Organizations like the CCA at Hillsdale and othersshould raise the standard to which the politicians areexpected to repair .

(4) Another reason to be optimistic is the Presidenthimself. He has all the right instincts, both in publicand in private meetings . President Reagan is not thetype to worry about the schedule for using the WhiteHouse tennis courts (as President Carter did at the star tof his term), the temperature of water in federal em-ployees' restrooms, or what is going on in the bowel sof IDCA or somewhere else—but he is the ideal perso nto use the Presidency as, in the words of Theodor eRoosevelt, a "bully pulpit . "

(5) The new conservative members of the Senate an dthe House can effect exciting changes . Organizationslike Heritage can continually remind the Congress tha tneutrality in terms of public policy does not necessaril ymean doing things the way they are being done now .There's going to be some changes made . The Americanpeople did not want more "business as usual . "

If these factors can collaborate to extend the Presi-dential "honeymoon " beyond its usual 100-day dura-tion, what we might have is a "continuous honey-moon"—where as positive initiatives are taken, asdecisions are made, a perception that things are goin gto change gains momentum among the people . Theywill see that there are some people in Washington wh oare trying to make government not only more respon-sive to the people, but also a lot less intrusive . TheAmerican people can better decide for themselves ho wto spend their own money than can the government .

If the new administration manages to keep the honey -moon continuing long enough, it might be able to keep

the vested interests at bay until some major changes can

That is why I am optimistic, and why I believ ebe implemented .

Washington will be a city of hope .

The opinions expressed in IMPRIMIS may be, but are not necessarily, the views of the Center for Constructive Alternatives or Hillsdale College .Copyright © 1981 by Hillsdale College. Permission to reprint in whole or in part is hereby granted, provided customary credit is given .Editor, Ronald L. Trowbridge .

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