Mike Lofgren was a three-decade veteran of Capitol Hill in 2012 when he saw Congress reduced to a cowering and ineffectual mess during budget fights. The recently elected Tea Party members forced a government shutdown and threatened default on public debt.
Lofgren quit in frustration.
The Tea Party, he says, is a symptom of more structural problems with the way big, interconnected organizations function today — not just in Washington but on Wall Street and in Silicon Valley.
In The Deep State: The Fall of the Constitution and the Rise of a Shadow Government, Lofgren describes what he calls “the transformation of the United States from a quasi-social democracy to a political oligarchy maintaining the outward form, but not the spirit, of constitutional government.”
Both in the book and in his discussion below with Penguin Random House, Lofgren outlines ideas to address a range of issues — income inequality, campaign finance, military spending, national security, digital surveillance — by shifting power from corporate interests and the Executive branch back to the people in the form of a reinvigorated, refocused, and responsive Congress.
PENGUIN RANDOM HOUSE: The United States spent $1 trillion in Afghanistan and Iraq, which you note in the book. What did we spend that on?
MIKE LOFGREN: We spent it on combat pay and medical care for the many people who got wounded. We spent it for operations — Haliburton got paid $20 billion to handle Army logistics in Iraq. We spent $7 billion on a sewer system in Baghdad.
PRH: If we are paying for core governmental responsibilities through private contractors, do we wind up paying an outsized profit premium on top of the actual work?
ML: Oh, yes. The Army cannot logistically go to war itself. In World War II, we had something called the Red Ball Express with truck drivers bringing food, fuel, ammunition, etc., from the landing ships at Normandy to the fighting front. Today, Haliburton would do that, and when you have a contract, there’s a profit margin. A lot of the guards around military bases in the United States today are actually provided by DynCorp and other companies, and it’s very lucrative for those companies.
PRH: Are you arguing that the federal government should take back some of those functions from private contractors?
ML: Yes. We have fewer federal employees per capita now than we did during the Eisenhower administration, yet the spending has continued to rise. That’s because so much of it is outsourced. Roughly seventy percent of the National Security Agency’s budget goes to contracts. As much as the NSA’s leadership wanted to boil Edward Snowden in oil for leaking secrets, they should look in the mirror. Why did a lowly contract employee from Booz Allen have access to all those secrets?
PRH: You quit Capitol Hill in frustration over the 2011 budget fights. How did things look from where you were sitting?
ML: They looked ridiculous. There has to be some notion of governance in this country, and the Tea Party election in 2010 resulted in a new Congress in 2011 with many members whose highest priority was to use the threat of a sovereign credit default to get the things they wanted. That’s like pointing a gun at your own head and threatening to pull the trigger. I didn’t stick around for very long.
The Treasury was juggling its accounts to stave off hitting the debt ceiling through early and mid-2011. There was a lot of talk about the FDA not inspecting for food safety, the FAA not inspecting the airlines, airport improvement projects were put off, yet they scraped together $1 billion to overthrow Muammar Gaddafi, which was one of the dumbest ideas in my lifetime. It was a disaster.
PRH: There’s a lot of evidence that handgun availability correlates to rates of firearm deaths. Do you see the same effect with having such a large military resulting in looking for ways to use it?
ML: If you have a hammer, you’re going to use it. It’s too easy to intervene and for members of Congress to play armchair Douglas MacArthurs about what they’re going to do with ISIS, what they’re going to do with Putin, how they’re going to constrain China.
PRH: The idea of the book is that power has become increasingly concentrated in corporate interests with lots of money and executive departments with big budgets. Why do you call that “the Deep State”?
ML: That term comes from Turkey, from the description of the corporate moguls running the show regardless of what political group was in power. The New York Times recently ran a piece that said half the money contributed to Republican and Democratic presidential campaigns came from just 158 families. That was $176 million. At the same time, the Pew Research Center did a study recently that said the middle class is now less than half the population for the first time in four decades. I think those two data points are connected. As the money concentrates in one small segment of the population, it drains out of the rest of us.
PRH: There are a lot of examples in history of economies gravitating to income inequality. If that’s what free markets are naturally inclined to do — if that’s a natural outgrowth of a growing economy — why mess with it?
ML: Free-market capitalism does certain things very well. Stalinist Russia couldn’t produce shoes or other basic goods because it was all determined by basic planning. If I want to buy a two-by-four, I’d rather go to Home Depot than have a government agency sell it to me. However, it must be constrained by anti-monopoly laws and sensible regulations that limit companies from shifting their costs to the rest of us. A steel mill or oil refinery shouldn’t be able to lower its costs by polluting the surrounding area, making people sick, and lowering their property values.
PRH: You include Silicon Valley as part of the problem. Isn’t it their role to innovate even if that means innovating around unintended consequences?
ML: Innovation is fine. We’ve had innovation throughout the industrial revolution, but most of that innovation took place in the United States. When Henry Ford figured out the assembly line, he doubled the wages of his employees. He figured out that if they have enough money to buy the product they produce, it will help them and help him. With Silicon Valley, the labor is largely overseas. There’s only a handful of people in the United States involved in the tech sector relative to tech’s slice of the economy. In the 1950s, the car companies experienced enormous growth and enormous job growth here at home.
Tech companies book much of their profits overseas. Tim Cook had the temerity to complain on “60 Minutes” that Americans don’t have enough educated engineers to produce Apple’s products here, so the company had to set up factories in China. Apple is benefitting from public institutions like Berkeley and Caltech and benefitting from the infrastructure here, but it doesn’t want to pay the taxes in the United States that would educate the workforce here.
PRH: The president’s power is moving in two directions at once — less influence with Congress but more influence over military and national security. What has the effect of that been?
ML: The president often can’t get his own nominees confirmed to important positions. He can’t move gun control forward. The executive orders that everyone is jumping up and down about are very limited. He can’t get his budgets passed. But he can order drone strikes, put special forces on the ground in Iraq and Syria. That’s partly attributable the natural growth of executive power, but it’s also an abdication by Congress. They don’t want their fingerprints on foreign wars. They jump up and down about the Constitution but abdicate their own constitutional responsibilities for purely political reasons.
PRH: Do you see gerrymandered, safe, ideological congressional districts as the biggest obstacle to Congress becoming more willing to work toward bipartisan solutions to big problems?
ML: Aside from money drowning politics, it is. And it’s a double whammy in that the districts are drawn so carefully that an incumbent is essentially guaranteed to keep his seat unless he gets unseated by an even more ideological member of his own party in a primary.
PRH: You argue in the book for the United States to take a much smaller role in the Middle East. Doesn’t the Islamic State’s willingness to engage with the United States make a compelling argument against that?
ML: It a compelling argument for it. It was our engagement in invading Iraq — which had nothing to do with Al Queda — that resulted in ISIS. If we fought ISIS the same way we did the surge in Iraq in 2007, we could wipe out most of the terrorists. But what would take their place when we withdraw? Keeping a vast garrison force there in perpetuity is not a very attractive option. The way we are fighting terrorism creates more terrorists than it kills and captures. There have always been terrorists; we have to look at whether what we’re doing to fight it makes it better or worse.
PRH: Hillary Clinton has strong connections to Wall Street and in the national security community. How concerned are you that she would be inclined to the status quo on some of the issues you’re concerned about or that she would even exacerbate some of those problems?
ML: She would be the same or worse. Her track record in advising for intervention in Libya and in Syria doesn’t give me confidence on that.
PRH: Can you conceive of her nominating someone like Sen. Elizabeth Warren as Secretary of the Treasury?
ML: I doubt it. Barack Obama didn’t nominate her as Secretary of the Treasury. He nominated Tim Geithner who was very Wall Street-friendly. He wasn’t significantly different than Hank Paulson, George Bush’s Treasury Secretary. They administered the bailouts in similar fashion.
PRH: There’s a good chance that a Democrat as the next president would get an opportunity to change the orientation of the Supreme Court from a conservative majority to a progressive majority. Would that have a meaningful impact on the areas you’re concerned about?
ML: It would definitely have an impact on domestic social issues like gay rights and abortion. On the money issues — who gets what, what are the rules for Wall Street, can we fight these wars in perpetuity — I’m not sure Hillary Clinton’s appointees would make much of a difference.
PRH: The book makes some specific policy prescriptions. Do you see yourself in a think tank role, or do you see yourself as an activist on some of these issues?
ML: I’m looking over the long term. A lot of people become narrowly focused on one issue, which is great because that’s how you make changes on those issues. I tend to look at many of these issues not in isolation. I don’t think it’s a coincidence that we have accelerating income inequality, outsourcing, deindustrialization, and rampant military interventionism. They spring from the same philosophical roots among a small group of elites.
PRH: Do you see things moving in the right direction on some of these issues?
ML: We’re seeing a kind of time-delayed reaction to the biggest economic cataclysm since the Great Depression. The 2008 crash was horrendous, but nothing seemed to change. People’s thinking had to catch up with events, and maybe they have. Occupy Wall Street largely failed, but everybody is talking about income inequality now.
Donald Trump and Bernie Sanders represent the fallout of the crash in that enough people know that something is really rotten about the status quo, and they have a different model of raising money. Trump doesn’t need it, and Sanders has raised it from small contributions. They threaten to disrupt the beltway racket of the permanent campaign. We spent $6 billion on federal elections in 2012, and we’ll spend a lot more in 2016.
PRH: You don’t sound much like a Republican who came to Washington in the Reagan ’80s.
ML: I believe in empirical evidence. When supply-side tax cuts — heavily skewed to the rich — don’t work, I look at the evidence of that. They don’t pay for themselves with revenue produced by growth. Maybe it was worth a try coming off the stagflation of the 1970s, but it didn’t work. The debt tripled under Reagan’s two terms, yet Republicans in 2016 pretend it worked just great. They all have tax plans that are skewed wildly toward the rich and would blow a hole in the federal budget.
PRH: When you worked on Capitol Hill, did Republicans talk about these things in private the same way they talked about them in public?
ML: A number of them know that these things don’t work, but they become a magical incantation that they say like it’s a religious ritual. I talked to members of Congress before we invaded Iraq about the dangers of occupying Iraq and the weak evidence that Saddam was linked to Al Queda. Many of them agreed with that, but it didn’t change their vote.
