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How We Institutionalized Incompetence

Charles Hugh Smith
OfTwoMinds blog
October 13, 2020

And so we face the ultimate irony: ‘bailing-out-everything’ destroys the entire rotten system.

You’ve probably noticed things no longer work as well as they once did. For example, the store’s online inventory says something is in stock and when you get to the store, it’s not on the shelf. A small issue, but telling nonetheless.

Or you might call a local government agency to get an explanation of how a new fee is calculated, and nobody’s ever available to explain it–or sort out your punitive late fee even though you paid on time.

You’ve probably noticed services cost a lot more now, but the quality has eroded. Sure, it’s easy to blame it all on the pandemic, but quality has been eroding as costs have risen for years.

You’ve probably noticed massive cost overruns in public projects. That $1 billion bridge is now $3 billion–oh, sorry, make that $4 billion. If we ever get it finished, better estimate $5 billion.

You’ve probably noticed that enormous investments in infrastructure, education, reducing homelessness, etc. don’t actually improve the situation or fix what’s broken. Even the most basic projects take years or decades, congestion and homelessness increase, and education that’s not aligned with the real economy flounders on.

You’ve probably noticed that all the highly paid analysts, academics, think-tank gurus, private-sector hotshots, etc. are either clueless, incoherent or delusional. All their “solutions” boil down to one recommendation: keep the feeding trough filled to the brim, no matter how many hogs are gorging themselves.

Incompetence is now so ubiquitous, so embedded, so obvious and so intractable that we finally have to recognize that America has institutionalized incompetence.

Why? That’s an interesting question with no one answer.

Broadly speaking, self-interest is all that matters. Every decision is made to maximize self-interest while cloaking the predation with sickly-sweet propaganda of the most transparent type.

Institutions protect insiders because every insider must mask their self-interest and the general failure of the institution. Insiders protect other insiders lest transparency reveal the insiders’ skims and scams and the failure of the institution to fulfill its purpose.

Risk is to be avoided at all costs because any failure might reveal the systemic failure of the entire organization. So as Louis-Vincent Gave recently explained, CYA Is the Guiding Principle Of Our Time [1]. If insiders just maintain the status quo and don’t rock the boat with any risky innovations or policies, no one will look too deeply at the systemic failures or the rising risks of the whole rotten mess collapsing.

This is how we’ve devolved to doing more of what’s failed spectacularly. Indeed, spectacular failure is the excuse for bigger budgets, more staffing, more studies, etc.

America’s core businesses are monopoly and corruption. In either case, the customer / end-user can be ignored because they have no real choice. Or the choice is false: your choice of healthcare insurance provider, Internet provider, etc. is between two equally predatory companies.

As a result of the network effect, quasi-monopolies abound in Big Tech. Yes, there are alternative platforms for posting videos other than YouTube, but few will see your content because “everybody goes to YouTube.” So content providers have to not just promote their content, they have to promote the alternative platform in a system that’s rigged to favor the monopoly-platforms.

Corruption also limits transparency and competition just like monopolies and cartels. Insiders rig the hiring process so cronies and relatives get the jobs, and so on. Those tasked with oversight look the other way because their cushy post-retirement position awaits them if they just keep their mouth shut.

Then there are the incompetent elites at the top. They’ve punched all the right cards–elite university, multiple diplomas, internship with the right judges, investment bank, etc.–but they’ve learned absolutely nothing other than how to navigate a corrupt system that protects or even rewards incompetence.

What the ruling elites learn in America is somebody will bail me out. The government will fund the financial bailout, the fines will be wrist-slaps, the university will slip me into a highly paid position out of the limelight, and so on.

And always, always, always, the feeding trough will be filled to the brim, no matter what the cost or the incompetence. Sacrifice and discipline have been reduced to platitudes in America’s elites, whose core competence is issuing mea culpas when caught.

An enormous percentage of well-paid “work” is compliance-related. As the pursuit of self-interest has decayed competence, we’ve become obsessed with monitoring and ticking endless boxes to conform to accepted practices, whether they make sense or not.

This is the essence of BS work: all the compliance busy-work has nothing to do with the actual production of goods and services or innovation or excellence; as the late David Graeber said of BS work: everyone doing it knows it’s worthless.

Compliance is the perfect cover for institutionalized incompetence. The irony is rather rich: systemic incompetence is papered over by incompetent compliance measures, all of which drain the feeding trough.

There’s only one way left to fill the feeding trough being drained by systemic incompetence: trillions in “free money” forever. That this extravaganza of endless “free money” debauches the currency is ignored, because all the ruling incompetents have been trained to be utterly confident that somebody will bail me out.

And so we face the ultimate irony: bailing-out-everything destroys the entire rotten system. Competence now means successfully navigating incompetent systems corrupted by self-interest. This means avoiding all risk and leaving everything as it is, lest someone notice the systemic failure.

What we’ve institutionalized is run to failure: we’ll just keep doing more of what’s failed spectacularly until the entire status quo collapses in a fetid heap of greed, self-interest and gross incompetence.