Fornication, the FTC, and the Civil Service

An old joke goes: what should be done about a couple fornicating on the steps of the public library? The conservative says, it’s OK if they have the benefit of clergy. The liberal says, it’s OK so long as it’s mandatory. The communist says, it really doesn’t matter because they’re going to be shot afterwards anyway. The libertarian says, there shouldn’t be any public libraries. 

The Wall Street Journal has been investigating stock trading by government bureaucrats in companies the agencies that employ them oversee.

Some of the Journal’s findings were: 

  • numerous federal officials owned shares of companies lobbying their agencies; 
  • issues emerged at a wide array of agencies; 
  • some officials traded ahead of regulatory actions, and some of the trades were large and risky; 
  • and the scope of the investigation was extensive: “The Journal obtained and analyzed more than 31,000 financial-disclosure forms for about 12,000 senior career employees, political staff and presidential appointees. The review spans 2016 through 2021 and includes data on about 850,000 financial assets and more than 315,000 trades reported in stocks, bonds and funds by the officials, their spouses or dependent children.”

One is tempted to say (like Jafar’s sarcastic parrot and sidekick, Iago, in Disney’s “Aladdin”), “Why am I not surprised?” Shades of Rick’s Cafe. But should we at least feign surprise? 

Listed among the worst offenders were the employees of the Federal Trade Commission—an agency that doesn’t do anything the Department of Justice can’t or couldn’t do. The Journal reports that “a third of its 90 senior officials owned or traded stock in companies that were undergoing an FTC merger review or investigation, based on actions the agency has made public.” 

There are approximately 2.85 million civil service employees working for the federal government—though we must stop to remember President Reagan’s quip to the Japanese ambassador who asked him, as they drove past the Eisenhower building in Washington: “How many people work here?” Said Reagan: “About half of them.” And that quip should remind us of what Milton Friedman said: “We should be glad we don’t get all the government we pay for.” 

The Journal’s investigation seems to have looked at only the senior executive service, a special category of employees established when Jimmy Carter was president. 

President Theodore Roosevelt is generally considered the father of the civil service in the United States. Part of the idea was that those in the civil service would be or become not just specialists but also, because they were being adequately compensated, more likely to resist the temptation to grift and corruption—and be, if not non-political, at least non-partisan.

It hasn’t worked out that way. As the Journal’s research shows, at least the top echelon of government employees, and probably the employees in many layers below, are perfectly happy to trade stocks, certainly in violation of the rules and probably on inside information. And it’s not as if they are underpaid: SES employees receive between $135,000 and $204,000 a year, far higher than the average wage in the country, which is approximately $50,000 a year.

We may not know how most civil servants vote, but we do know that in 2020 Biden won 93.7 percent of the District of Columbia vote.

So: the civil servants vote hard Left, almost certainly infuse the performance of their jobs with as much hard-Left ideology as they can, and are paid far more than average Americans. Something’s wrong with this picture. The question is, what to do?

What, first, to do with the employees of the Federal Trade Commission? Benefit of clergy won’t help here. Obviously, it shouldn’t be mandatory. And we don’t execute people. That leaves the libertarian answer: there shouldn’t be a Federal Trade Commission.

That was easy, but what about all the other SES employees, sprinkled throughout all the other agencies and departments, busily trading their stocks? Can we get along without them too?

Answer: probably. We should bring back the “spoils system,” in which the winner of the election gets to fill all those positions with people he can trust—unlike, e.g., the employees at FBI, which we now know is a hotbed of Democratic Party partisans, willing to cheat and lie in order to steal, or overturn, an election. They didn’t like the people’s choice in 2016 and sought to overturn it.

Pending bringing back the spoils system, we could amend the Hatch Act (which now restricts federal employee participation in certain partisan political activities) to forbid Senior Executive Service personnel from voting for any candidate for federal office or from contributing to the campaign of a candidate for federal office.

In addition, we should consider forbidding any employee (or perhaps any employee who receives more than the average American wage) of any organization that receives substantial sums from the federal government from voting in federal elections. Last year Harvard received approximately $750 million from the federal government. Biden raised 76 times as much money from Harvard employees as Trump did. And according to a Daily Caller survey, only three of the 260 Harvard Arts and Sciences faculty members who responded said they planned to vote for President Donald Trump in 2020.

We shouldn’t be shocked to find gambling going on in Rick’s Café—or in government bureaucracies. But we don’t have to subsidize it. And we shouldn’t be afraid of passing laws to stop it.


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About Daniel Oliver

Daniel Oliver is chairman of the board of the Education and Research Institute and a director of the Pacific Research Institute for Public Policy in San Francisco. In addition to serving as chairman of the Federal Trade Commission under President Reagan, he was executive editor and subsequently chairman of the board of William F. Buckley Jr.’s National Review. Email him at Daniel.Oliver@TheCandidAmerican.com.

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