The Magazine

A Theme for McCain's Pudding

Here's how to tie together the campaign's assortment of ideas: a reform agenda for the 21st century.

May 26, 2008, Vol. 13, No. 35 • By YUVAL LEVIN
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Many of our public institutions arose to meet the demands of the 20th century. The growth of complex financial markets brought about the Federal Reserve and an evolving regime of financial regulation. The emergence of powerful new technologies brought about agencies, like the Food and Drug Administration and the Federal Aviation Administration, to ensure their safe use. The expenses of longer and healthier lives led to entitlement programs like Social Security and Medicare and to a complicated system of employer-based health insurance. The demands of two world wars and a long cold war brought about an integrated American military and a slew of intelligence agencies. And the challenges of managing and regulating all of this led to vast new institutions of governance: from the career federal bureaucracy and the absurdly complex tax code to the modern federal budget process.

These institutions have always had critics, but in recent years the old debates have begun to seem outdated as the circumstances from which they emerged have changed dramatically and the institutions begun to show signs of serious decay. Grave institutional failures have been behind some of the prominent problems of the Bush years. The systemic sclerosis of the intelligence community led American leaders to underestimate al Qaeda's ambitions and to overestimate Iraq's weapons programs. A disorganized domestic response apparatus revealed itself after September 11 and again in the wake of Hurricane Katrina. An overly rigid military (particularly the Army) designed for the Cold War found it difficult to adapt after early setbacks in Iraq and has even resisted a new and winning strategy more recently.

A health care financing system built for the mid-20th-century American economy has been showing strain for decades--just about everyone now agrees it needs a serious redesign. Old-age entitlements designed for a very different population are threatening to go bankrupt and take the federal government right with them. A legal immigration system enacted four decades ago is far out of touch with contemporary needs, while illegal immigration proceeds at a staggering pace.

Regulatory institutions have not fared better, and in just the past several months, we have seen embarrassing breakdowns at the FAA, signs of severe overextension at the FDA, failures of basic oversight in the nation's financial regulatory system, and new causes to worry about the readiness of the Federal Reserve to contend with unexpected events. Similar signs of trouble are everywhere. Individually, each of these may be dismissed as a modest problem, of the sort that is always popping up somewhere. But seen together, as they are arriving together, these signs point to a decay that may be the governing problem of the moment.

BIPARTISAN BLINDNESS

The left and the right have both largely failed to notice this emerging pattern. For the left, it has been easy these eight years to blame every failure of governance on a failure of execution and to assume that the man in charge of the executive branch is the key to all our troubles. To the extent that they now propose institutional reform--and it is a surprisingly limited extent--leading Democrats have in mind giving government more power and more responsibility: in health care, over the financial markets, in the housing sector. But that is less a response to the emerging decay of our public institutions than an expression of the left's generic approach to great governing problems.

Senators Obama and Clinton, moreover, have almost nothing to say about many of the most prominent institutional crises we face, including immigration, the structure of the military and the intelligence community, and (perhaps most amazingly) entitlements and the looming crisis of our welfare state institutions. Indeed, both have offered health care plans that would import into the private health care market the logic of a Medicare system now facing an $86 trillion unfunded liability.