Smart move by the Republicans

[stahleyp]

https://www.nationalreview.com/news/hawley-to-introduce-bill-moving-federal-agencies-out-of-washington-d-c-to-economically-stagnant-areas/

 

National Review is biased to the conservative side but I like this idea.

 

It saves taxpayers a lot of money and it helps promote less affluent economies.

[cubsfan]

Absolutely a very good idea. The real benefit is that it breaks up the cesspool that is DC - and puts the agencies among the

American population where they will be exposed to the real world instead of the corrupting forces of paid lobbyists that feast on DC.

[DTEJD1997]

Hey all:

 

A similar thing is happening in the legal sector (and others I suspect).

 

Back office, grunt & low level work is being moved out of high cost areas (NYC & CA) to lower cost areas, and Detroit is one of the prime ones.  Costs in Detroit are significantly lower than on the coasts.  Detroit still has infrastructure in place, has plenty of workers that will work at a much lower rate, plenty of real estate, and so on.

 

Another benefit of moving some of government out of DC would be to make government more resilient to attack/catastrophe by dispersing it somewhat.

 

Probably a good idea!

[LC]

Both California and Texas both have more Federal employees than the District of Columbia. This does not include Maryland/Virginia however.

 

I understand the populist notion against big bad government but some centralization is needed and an actual feasibility study must be done. For example I would assume having the same time zones is most likely required. A level of infrastructure is needed, particularly for jobs requiring security clearance. And does anyone actually know how much "back-office" work can realistically be shipped out?

[DTEJD1997]

Both California and Texas both have more Federal employees than the District of Columbia. This does not include Maryland/Virginia however.

 

I understand the populist notion against big bad government but some centralization is needed and an actual feasibility study must be done. For example I would assume having the same time zones is most likely required. A level of infrastructure is needed, particularly for jobs requiring security clearance. And does anyone actually know how much "back-office" work can realistically be shipped out?

 

I thought the telegraph/phone/interweb was supposed to enable diffusion of business activity, not concentrate it?

 

Detroit is in the same time zone as Washington DC.  Chicago is only 1 hour behind.  Might placing some of the federal government on the West coast not improve productivity?  They continue working as the East coast shuts down for the night?  Then, when the East coast picks back up the next day, they can pick up where the West coast left off?  Even with differentials in time zones, you've got email and video conferencing to deal with that.

 

What type of infrastructure (other than room/office/building infrastructure) (secure communication lines) is required for confidential/top secret work?  Heck, you could build totally new "secure" campuses in the hinterlands of Detroit.  Totally set off from everything else with large earthen berms & crazy security fencing (like Chrysler Jefferson Ave. assembly plant).  Something you have to drive into, passing through multiple security checkpoints.  You wouldn't even SEE any of the building from the public street.  You could also build/tunnel underground to be doubly/triple secure.  Detroit has PLENTY of open & available land.

 

Could everything be moved?  No, probably not, but you don't have to move everything, maybe just 1/3? or 1/2 Some examples could be moving 99% of Veteran's hospital administration stuff.  What about weapons/systems procurement for the armed services?  The Detroit area still has an incredible amount of experience and engineering capability/knowledge.  What about social security administration/paperwork?

 

I think the Midwest is oversold and the coasts overbought.  I think there is a great opportunity to move business back into the hinterlands.  We will see!

[LC]

Well, I'll tell you what we've seen from outsourcing (both within the US and outside). This is the global financial industry, knowledge-intensive work:

1- Reduction in "culture" or work ethic or whatever you want to call it. We get more productivity out of our NYC-based teams than anywhere else in the world, barring perhaps APAC (Hong Kong). They do higher quality work with less time.

2- Reduction in institutional knowledge - aside from EU-specific regulatory items which our London groups knows best, the NY based group has the highest skillset, quickest to be exposed to and understand new industry dynamics, and routinely has to informally train our other groups. Other gro groups are essentially lagging indicators.

3- Definitely higher cost in NY and London than Latam, APAC, or other parts of the US. Now, depending on the work this is really the cost-benefit calculation that you need to make.

 

In terms of time-zones, this is the pipe dream. Aside from FO work where we need people awake during market hours, the hand-off situation that you describe is not accurate. You need people working together at the same time for maximum efficiency. We tried integrating work between geo groups and it fails every time because there is little real-time communication. It works better when you can clearly and cleanly divide functions and remove dependencies between groups.

 

In terms of security I don't know what government requires for its varying levels of clearance. I know for our work which is much less "secretive", we must have all sorts of contingency plans in place to deal with natural disasters, terrorist events, etc. I would imagine for a SSA office it's no different than any other company, but for aspects of energy, military, aerospace, cybersecurity, etc. their needs will be more unique. To me this is an unknown.

 

I think you downplay the benefits to having a concentrated industry (or government) location. All those MBA "soft skills" are actually important, and they are amplified with population density. Additionally I think you run the risk of losing better people when you move to tier 2 & 3 locations.

 

Finally I think we'd be naive to think nobody in government has thought of outsourcing back-office work to the heartland. Perhaps the reason it hasn't happened is due to bureaucracy and politics, or perhaps they did the analysis and it simply doesn't make sense. Again, an unknown.

 

Now all that being said as a person who lives and works remotely in the middle of the country I welcome it for selfish reasons, but I would be lying if I thought it would be more effective to do.

[Read the Footnotes]

It is important to notice is that the relocations are being done to benefit the districts of the sponsors. Just seems like pork barrel politics to me.

 

Given that in many cases the offices are being relocated to be closer to the industries they supervise, I am suspicious this also to do with regulatory capture and disempowerment of regulatory bodies. Those industries are campaign contributors, and are especially likely to be influential in the home districts of the sponsors and backers. This will likely make the revolving door move faster, not slower. If you consider the revolving door, part of the "swamp", then this does little to drain the swamp. If anything it deepens it and moves it slightly more out of view.

 

That analysis may not fit with the talking points of either Democrats or Republicans, but it seems to have more explanatory power to me.

[stahleyp]

Sure looking at efficiency is fine but I highly doubt the role of the organization outweighs the cost savings (and economic boom to those areas).

 

How about we just move the DC to Kansas or something? That's actually a way more fair place to be than the current set up.

[Spekulatius]

It is important to notice is that the relocations are being done to benefit the districts of the sponsors. Just seems like pork barrel politics to me.

 

Given that in many cases the offices are being relocated to be closer to the industries they supervise, I am suspicious this also to do with regulatory capture and disempowerment of regulatory bodies. Those industries are campaign contributors, and are especially likely to be influential in the home districts of the sponsors and backers. This will likely make the revolving door move faster, not slower. If you consider the revolving door, part of the "swamp", then this does little to drain the swamp. If anything it deepens it and moves it slightly more out of view.

 

That analysis may not fit with the talking points of either Democrats or Republicans, but it seems to have more explanatory power to me.

 

Regulatory capture works both ways. A lot of the defense industry moved their headquarters to Virginia to be closer to Washington DC and the Pentagon. That’s why you see the fluent transition of Senior military officials working/consulting for defense companies. They don’t have to move to do so. Some decentralization might do some good.

 

On the other side, it’s just a matter of fact that knowledge industries tend to crystallize in a few cities. It’s because the employees make the decision where they are going to live and work, not the companies. the company can decide to move to Kansas to save money, but if their main contributors don’t like to go, thr company is hosed.

 

I have worked for a company that did quite a few acquisitions and liked to shuffle locations around and it generally didn’t work well. Good engineers or managers typically find it easier to get another job in their current location than to move their family.

[Read the Footnotes]

Regulatory capture works both ways.

Some good points, Spekulatius, but I'm confused. Regulatory capture being a two way street doesn't seem to fit with any definition I am aware for regulatory capture.

 

 

Regulatory capture is a form of government failure which occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or political concerns of special interest groups that dominate the industry or sector it is charged with regulating.[1] When regulatory capture occurs, the interests of firms, organizations, or political groups are prioritized over the interests of the public, leading to a net loss for society. Government agencies suffering regulatory capture are called "captured agencies."

 

from:

https://en.wikipedia.org/wiki/Regulatory_capture

[Spekulatius]

Regulatory capture works both ways.

Some good points, Spekulatius, but I'm confused. Regulatory capture being a two way street doesn't seem to fit with any definition I am aware for regulatory capture.

 

 

Regulatory capture is a form of government failure which occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or political concerns of special interest groups that dominate the industry or sector it is charged with regulating.[1] When regulatory capture occurs, the interests of firms, organizations, or political groups are prioritized over the interests of the public, leading to a net loss for society. Government agencies suffering regulatory capture are called "captured agencies."

 

from:

https://en.wikipedia.org/wiki/Regulatory_capture

 

Poorly worded on my side. Regulatory capture would tend concentrate business wherever the regulator might be or move, so it would probably do nothing to move the regulator elsewhere. I would posit in fact that if you would move a regulator into a smaller town, the would become even more inbred , due to limited opportunity for the personal involved to do something else without moving.