495 FBF: Death of Common Sense by Philip K. Howard

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Welcome to the Holistic Survival Show. This is your host, Jason Hartman, where we talk about protecting the people, places and profits you care about in these uncertain times. We have a great interview for you today and we will be back with that in less than 60 seconds on the Holistic Survival Show. And by the way, be sure to visit our website@holisticsurvival.com you can subscribe to. Our blog, which is totally free, has loads of great information and there's just a lot of good content for you on the site. So make sure you take advantage of that@holisticsurvival.com we'll be right back. It's my pleasure to welcome Philip K. Howard to the show. He is a prominent attorney and commentator. He's founder and chair of Common Good and author of the classic the Death of Common Sense. And his newest book is entitled the Rule of Saving America from Dead Laws and Broken Government. What a timely subject. So, Philip, welcome. How are you?

Nice to be with you.

Well, it's good to have you. And just to give our listeners a sense of geography, where are you located?

I live in New York City.

Okay, well, there is a place with broken government, just like my home state of California. Anyway, so tell us a little bit about the organization and let's dive into the books and we can provide any solutions today.

Well, common Good I started about a dozen years ago and it is basically dedicated to creating new government structures that allow people to take responsibility and to act on their best judgment. So we had a joint venture with the teachers union and the New York Board of Ed to redesign the system of discipline so that teachers could maintain order in the classroom. We had a project with the Harvard School of Public Health to redesign the medical malpractice system so that doctors could actually trust courts to distinguish between good care and bad care. And pretty much everybody came out for it. Obama was for it, Romney was for it, all the debt reduction commissions. It hasn't happened because the trial lawyers have stopped it so far, but it will happen sooner or later because it's just crazy to waste one or $200 billion a year in unnecessary tests and procedures because doctors justifiably don't trust the system of justice. So those are two examples of.

So what you're saying there just on the medical issue is you're saying doctors are over caring because they're concerned about litigation, Is that correct?

Yes, yes. So, for example, because when the tragic occurrence of a baby born with cerebral palsy happens, there is almost always a lawsuit for 10 or 20 million dollars, but nothing the doctor did could have caused the problem. It's basically caused by a virus in the womb. So in reaction to the fact that, that the lawyers will claim this, doctors in America now order 50% more cesarean sections that are medically indicated, which is bad for the mother and bad for the baby and costs a lot of money because you have more surgery and more days in the hospital and all that sort of stuff just to cover themselves in case the baby's born with cerebral palsy.

So that's fair. I mean, there are most certainly two sides to this tort reform issue and the litigation issue. You know, it's a love hate relationship with trial lawyers I mostly hate. But people grouse about the cost of litigation and so forth until they have their own problem, and then, you know, they don't want to go to arbitration. And I can certainly see that side of it. Just out of curiosity, arbitration is kind of embedded in this whole tort reform issue. What do you think about arbitration?

Well, it's interesting. Well, I think arbitrations are very good for some things and not so good for others. But the system of justice ought to make trials economically available to people who want to have their day in court. The problem is the system of justice has become so dense that nobody can afford to go through the entire process. So that when justice isn't economically available, you might as well not have a system of justice. But one of the problems where the tort reformers have the wrong, generally the wrong solution. In my view, the right solution isn't just to limit damages, for example. The right solution is to create a system of justice that reliably sorts unreasonable behavior from reasonable behavior that requires rulings of law that people can actually respond to. Today we have the system where literally anybody can sue for anything anytime there's an accident. Almost never subject to arbitration, for example. But often the accidents are just the ordinary accidents of life. A kid falls off a seesaw or something, and the effect of that is the effect of the ability to sue for anything. Is it? In the case of children's play, we've really done away with all the fun implements of childhood. Seesaws, merry go rounds, jungle gyms, all that stuff that's disappeared because people are scared of getting sued.

Yeah, it's certainly a complex issue. No question about it. I don't know what the solution is, but I think it's probably to get these awards within reason somewhere and to limit these venue issues where everybody sues pharmaceutical companies in these certain jurisdictions because they know the juries will just give them a giant payout and you're just not going to have any pharmaceutical companies or the drugs. I mean, they're already so expensive. And, you know, a lot of that cost in there is probably embedded in litigation, you know, so it's a. It's a definitely a very complex thing.

Well, the system of justice exists to support a free society, so it ought to reliably and economically provide a means of accountability when someone is injured by a mistake. But it should never be a lottery, and it should never subject people who didn't do anything wrong to years of litigation and a potential ruinous verdict.

Yeah, I mean, I certainly can see both sides of it. Look, I've been, you know, I've been a business owner for many, many years and have lots of business affairs, and the world is complicated. There's a lot of things that maybe I might offer my clients if I wasn't concerned about liability, you know, and they might benefit clients. But some things I just don't want to do because I don't want to take the risk. There's certainly, certainly understanding on both sides. Tell us about your concept of just so many laws. I mean, you know, I was brought up with the idea that ignorance of the law is no excuse, but there are so many laws. And I had John Stossel on the show a while back. He did a great piece on this. Nobody can know all the laws anymore. It's impossible. You know, in California every year, there are hundreds of new laws in the Socialist Republic of California every year. I mean, how can you possibly keep. How can you possibly know the law anymore?

Yeah, it's interesting. In the name of the rule of law, we've created this system with so many laws and regulations, the federal government has over 100 million words of law and regulation. And all the states together, all the states together have more than 2 billion. Well, no one can know that. No one can know a fraction of that. And so we don't have the rule of law. We have the rule of, well, pick your pet. Paralysis. Gotcha. You know, anyone, anyone can be indicted now for almost anything they do because I guarantee you, nobody complies with all the laws. There are studies done where when a regulatory agency, say a safety agency or environmental agency tells a company, we're going to inspect you in two months, so the company, with all their lawyers goes out and tries to make sure everything is in ship shape condition, right? And inspectors come and they inevitably find hundreds of violations because even a big company with, you know, scores of lawyers can't get it right. It's just impossible. We've created this crazy madcap legal system where people are constantly violating things, frankly, that don't matter very much most of the time. But they're. But the regulators get them for it.

Yeah. So there are two parts to this, if you will. One is the part of, you know, we have to worry about civil liability from, say, clients, customers, you know, in a business. But we also have to worry about liability from the government, which scares me the most, frankly, because they have unlimited power and they make the rules and it's all set in their venue. So that's administrative law, where, you know, especially, I mean, just a regular citizen, anybody is out there just breaking laws all the time that they don't even know exists. But if you're in business, you are definitely breaking laws all the time. And this really is a scary issue when it comes to civil rights and civil liberties, because at any time the government, if someone's got a vendetta against you for some odd reason, you know, some administrator, some bureaucrat can just haul you in and ruin your life, you were cooked.

And so, you know, the irony here is that conservatives join with liberals in this idea that law should be a kind of a form of micromanagement, that if we're going to oversee nursing homes or worker safety, then, then we want to make the laws perfectly clear. That's the idea, perfectly clear. To make sure that the government official doesn't have any authority to, you know, act unreasonably or act like a tyrant. The trouble is there's so many rules and laws that we've given the government official carte blanche to, you know, to act like a tyrant.

It would be far Better, it becomes a case. I mean, I think you'll make this point. But just one more thing to add to what you're saying. It becomes an issue of selective enforcement. Because there are so many laws, the government cannot possibly enforce them all. So they don't. So it makes the playing field unlevel in the business world because one business gets the law enforced against them and the other businesses don't. And it's selective. I mean, that's not fair.

No, it's not fair at all. And it doesn't serve the regulatory goals, nor does it serve the conservative goals of trying to limit government authority. It does the opposite. So, ironically, it would be far better in most areas of government oversight to have the law be radically simpler. I mean, I'm talking about 1%, the number of rules. So it reads more like the Constitution with interpretive guidelines, where you're still going to have an argument over whether, you know, something's reasonably safe or, you know, or whatever. But at least the argument is over right and wrong now. It's not over. Did you comply with 250, you know, section 256, 3, 4, whatever? You know, where the argument is is just over the parsing of words, not right and wrong. So you want, if you're a real person, if you want to understand the law, you need it to be tethered pretty closely to what real people consider to be the, you know, the main purpose of the goals of the law, not all these technicalities.

Yeah, no question about it. I mean, you know, when you look back at the Founding Fathers and you look at the original intent of, you know, our Constitution and the Bill of Rights, I mean, was the world just so much simpler back then that you could do basically set up a whole country on several pages of paper, you know, or maybe, you know, I mean, some might argue that we need, what did you say, a billion words of law or whatever the number was, you know, nowadays, because the world's just so much more complicated.

Well, the world is somewhat more complicated, and certainly the role of government is bigger because the world has gotten more interdependent. So we entrust people we love to the care of people we don't know in nursing homes and daycare centers and schools, all kinds of things. So there's a role for government oversight where they didn't used to be one. However, the world isn't that much more complicated. And if you go back and look at the debates over the Constitution, there were some pretty subtle issues that they were discussing, and they concluded with the Constitution, which is barely 10 pages, that it would be much better to have general principles and to let people argue about right and wrong. And they talked about that. That was explicitly part of our founding philosophy, that it would be better for a free society to have everybody focusing on the goals, rather than an instruction manual telling people exactly what unreasonable searches and seizures meant, or the necessary and proper clause of the Constitution on the, you know, the role of government. So our founders were not dealing in a simple world. They had their own complications. And they dealt with it in a way that was, that allowed humans to take responsibility. We've tried to create a system of law and government where officials are just mindless mechanics to this huge legal machine. And the problem is, of course, the huge legal machine doesn't work.

It certainly doesn't. Is there, I mean, you know, where should the reform start? Should it start with reforming the profession of the practice of law? Some think what we need to do is change the way lawyers operate. Or do you know Shakespeare, first thing we do is kill all the lawyers. Right. And you are an attorney, of course. Is that where the reform starts? Or does it start in, I mean, government is just such a giant, slow moving, micromanaged, conflicting motivation monster? Or does it start in government with actual the laws on the books? Or do we start with the way the profession operates?

Well, I think if I had to set a kind of a set of goals, the first goal would be to change the public narrative. Let's don't argue about right versus left. Let's argue about, let's talk about why the schools don't work and why the health care system wastes money and why nursing homes are so awful. And ask ourselves the basic question, who has responsibility? And the answer in all these questions, who's responsible for the budget deficit? It's nobody. We've created a world in which literally has the rule of nobody, where nobody's responsible. So the next step, I think is to take area by area. We're working on one right now, which is infrastructure approvals, where we could hire 2 million people in a couple of years if we could get this done. Where you take something that's now a decade long process and you simplify it in the following way. Instead of just having people doing studies with nobody really in charge, give an official, probably at EPA the authority to decide when there's been enough review, which is normally about nine years before it actually gets finished. And because there are a lot of projects that basically have no impact, you're just rebuilding a broken bridge or something. And let those projects keep going, because today they can't. So you go area by area. You come up with a proposal that's radically simplified, mainly by giving somebody responsibility to make a decision. Then you have a way of holding them accountable, and you begin to develop a kind of a movement, if you will, which is what's needed, where you go area by area to radically simplify government so that it's back to a human scale that humans can understand, humans can deal with. Exceptions can be made, and government becomes back in state, in our control. Today, government's in control of nobody.

One of my show guests, Philip, called this concept in this thing between the government, the public employee unions, and then the constituency, or, you know, which may be the vendors selling to the government who are profiting. You know, he called them iron triangles. And you can never break them because everybody's motivation. You know, of course, the government bureaucrats, they want to keep their jobs, they want to keep their pensions, you know, and they want to have their little tyrannical power trips sometimes. And then there are vendors making money selling information systems to all these bureaucrats and selling supplies and, you know, providing services and so forth. And then there are constituents that, you know, everybody's just profiting or benefiting in some way everywhere you look. And, I mean, I don't know if you can ever break those triangles. Maybe the way it has to happen, sadly, is with a revolution.

Well, first of all, that's right, there is a triangle. So if you think of the way I look at modern democracy is it's not people making decisions. It's a giant blob. And it's a giant blob of accumulated laws and regulations, mostly written by people who are dead. They wrote them, and they just kind of sail along into infinity.

Right, and I just got to comment on that before you go on. I mean, until just last September with the JOBS act, you'd look at a private placement memorandum to invest in a deal and the securities act of 1933. I mean, it's the law, the slowest thing in the world to adapt.

Right, exactly. So, so you have this blob, and there are all these people feeding off the blob. There are special interests, there are lawyers, there are bureaucrats. And so it doesn't work. It has all these unintended consequences. There's not one legal, there's not one government program that isn't broken to some significant degree. But the solution isn't to get rid of government. It's not the Tea Party solution, in my view. It's to have a mechanism in place where you go and as you would in a business, to fix the problem. Okay, why is the Veterans Administration not working? You go ahead and fix it. It's not rocket science. Just fix it. But government doesn't have any capacity for somebody to actually take responsibility and do that. And Congress doesn't even have the idea that it should go back and fix all these old laws. It's treats them like they're the Ten Commandments. That is like the ten million Commandments.

Right, the ten million Commandments. I love that.

So it. So it just keeps on going. So what history shows is that change in a society almost never happens with small ball. It's just not how it works. It happens in big gulps and pressures build up decade after decade. And all of a sudden you get the 1960s or you get the 1930s, or you get the Progressive Era, or you get the Civil War. And that's going to happen here too. So it's got to change. But the question is, how is it going to change? And so what we're trying to do at Common Good and what I'm trying to do with this book, the Rule of Nobody, is actually portray a vision of how a democracy could actually work and make decisions and not be paralyzed.

Yeah, tell us about that. I mean, you've alluded to it for sure, but you know, maybe just give us the big broad view if you would.

Well, if you take any. So I just mentioned the infrastructure project. You can take a process where now nobody's in charge, where anybody who wants to complain can complain, and it'll go on for an average of almost 10 years for a relatively straightforward project. If you give an official the authority to say when there's been enough review, then it can go forward immediately. I tell the story of the Bayonne Bridge, which was a bridge that spans to kill Van Cold, a strait that goes from New York harbor into Newark harbor, where all the ships go. And the bridge is 65ft too low for the new generation of post Panama ships. So it needs to get raised. And the Port Authority, which owns the bridge, thought they were going to have to tear down the bridge and replace it. It's going to cost $4 billion. And this lifetime government employee came up with the idea that why don't we just raise a roadway within the existing arch? And they did structural test. Sure enough, they could. It was going to save $3 billion. The same foundations, the same right of way, everything right. It was just like a miracle. And guess what? Four Years later, they still didn't have approval, and now it's in litigation because they. Because the review they did was only 5,000 pages long. Imagine that for a project with no environmental impact. And people are suing, claiming they didn't do enough of a study.

Unbelievable.

Well, that's madness.

That's madness. That's crazy. Yeah.

Or I'll give you another example. Australia, like the us, had terrible nursing homes, very bureaucratic. They had a thousand rules. Food must be stored not less than 19cm above the floor. There must be 0.09 recreational workers per person. There must be a trash can in each bathroom. Yeah, it's just one thing after another.

And those all sound good, but aren't they just common sense?

They're all perfectly dull. But when you have a thousand of them, then what happens is people go through the day making sure those things are checked off right, instead of actually focusing on the person and saying, what does this resident need today? So Australia got rid of all their rules and they replaced them with 31 general principles. Have a home, like setting, respect the dignity of the residents, stuff like that.

Have it clean and nice, you know? Yeah, things.

All the experts scoffed. They said, all these nursing home operators are going to get away with murder. Within one year, all the nursing homes were twice as good. And the reason experts studied it, the reason is because people started going to work focusing on asking this question, what's the right thing to do? Instead of just being mindless, bureaucratic widgets complying with these thousand rules. And it's just. And it transformed Australia's nursing homes.

Very interesting. Very interesting. Well, let me just run an idea by you, if you'll indulge me for a moment. You're the perfect person to ask this. I have become so disillusioned and disappointed with government that I just don't believe in it like so many Americans don't believe in it anymore and for seemingly many good reasons. So I'm libertarian on the political spirit spectrum. And, you know, I'm just wondering if, you know, it's sort of. Whenever I talk with someone about these issues, we all have, you know, a few things that we want. Of course, when we go to a restaurant, we want our food to be safe. We don't want to get sick, we don't want to get hepatitis because the guy didn't wash his hands. You know, when we walk into a building, we don't want the roof to fall on our head. So that's the need for building codes and health codes and, you know, all of these laws. Right. And your common sense approach sounds great. Conceptually. I don't know how you do it and how it comes out in practice exactly. But, you know, it seems like a lot of this stuff could just be a simple law that says, look, the building has to be up to code, and we're not going to send a government inspector out there to see that it's up to code. And the restaurant has to do certain things to make sure the food is healthy, but we're not going to send a government inspector out there to do it. We're just going to make a law. And I know you're thinking, God, another law, terrible idea. But the law is just going to be really simple. You have to do all these things, and you have to have insurance that insures all of these things to the public. And to get that insurance policy, the insurance company that writes the policy will have to protect their interest and come in and inspect you and make sure you're complying. So you sort of delegate this responsibility away from government to private enterprise, which. The one thing I definitely do not like privatized is the prisons. I think that has turned into a disaster. Although conceptually, I liked that idea when I first heard of it many years ago. But I don't think that one is right. Am I. Do I have a good or bad idea here? I really don't.

Oh, no, no. I actually think it's an excellent idea. I think there are many areas of government oversight where it's important to put the obligation on the private sector that actually works with building codes. I mean, they're the professionals, architects and engineers and stuff actually have to certify that buildings and things are up to code. And that is a form of privatization because there are not enough inspectors to go around and look at every, you know, every building project. I've always thought that in certain areas, like pollution control and others, that you could actually have a new business line for accounting firms or consulting firms where they would actually go and they would themselves be certified as kind of regulatory experts. And they would go in instead of the inspector would come in, you know, and typically, and give out tickets and stuff. But they would go to, say, the pig farmer and say, look, you know, you're probably out of line with best practices here. You're allowing runoff from your pig farm to go in the creek. Da, da, da. Here are the ways you need to fix it. And if you fix it, we can give you the certification that you need to give to the government. And so you. So you have A much more of a cooperative type attitude, rather than a harried, overworked government inspector who just sees something bad and slaps an injunctive order or something.

Or on the other end of that spectrum, he sees something bad and takes a payoff and a bribe.

Well, that too, absolutely. And so you could. And government has become so intrusive in certain areas of regulation that it actually makes a lot of sense, I think, to privatize oversight because the government just can't get to it. The government can't. Doesn't have nearly enough worker safety inspectors to look at all the workplaces in America. So people can do whatever they want. So I think that's a very good idea. I think. I think the whole system needs to get rebuilt. And again, there's not one program that is effective. Maybe the FAA is effective. You know, I'm sure you can find exceptions. But basically, by and large, government is almost universally ineffective and wasteful and often counterproductive.

Yeah, yeah. I was listening to a Peter Drucker speech, you know, the great management expert, the late great management expert. And he was saying just over the weekend when I was listening to it, that government has been. The last time government was effective was in the 50s. It's. Since then it just. Nothing has worked, basically nothing.

Peter Drucker is an important source for me in the Rule of Nobody in my new book.

Oh, really?

So I quote him a lot. Yeah, he's incredibly wise. And one of the points he makes is that nothing happens unless a human makes it happen. Following a rule in the whole history of the universe, never made anything good happen. You know, rules are there as a framework to prevent bad things from happening, but they don't accomplish anything. Only people accomplish something. And so if you want government to work, you've got to give everyone the freedom to try to make it work. You don't just go around with your noses in rule books.

Yeah, no question about it. No question about it. Well, give out your websites. I mean, you've got one for yourself, I think, as an author, and then also one for your organization.

Well, one of the, you know, we're hoping to start a movement here. And so we're working with some of our. We have a great board, people like Al Simpson and Bill Bradley and people like that. And so we're looking for stories, stories from citizens of frustration with idiotic bureaucracy and such. So they can send the stories to storiesommongood.org and they can learn more about common good@commongood.org and, you know, for the Rule of Nothing. They can get to me through mine. My name is Philip K. Howard, but the book is getting a lot of good reception, many good reviews, and I think people seem to be responding to the Rule of Nobody and coming up with ideas about how to fix it as you have too. So thank you and I hope you'll be creative and come up with some more ideas and let us know what they are so we can enlist you in the cause.

Philip, if you have if you're collecting stories of idiotic government, I hope you have a lot of space on your server because there are a lot of people with a lot of stories out there. So keep up the good work. It was great having you on the show and talking about some of this stuff. That's Philip K. Howard, philipkhoward.com or commongood.org and the book, of course, is available on Amazon and all the usual places. Very, very interesting. Any closing thought, Phillip? Just real quick.

No, no. Thanks very much.

All right. Thanks for being on the show.

Thanks, Jason. Bye.

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