Stifling Commerce

How the Department of Commerce smothers what it's supposed to promote

"I ran for office pledging to make our government leaner and smarter and more consumer friendly," President Barack Obama reminded a group of small businessmen at a January 2012 White House gathering.

You can see why the audience needed a refresher course. The president's two signature legislative accomplishments, the Affordable Care Act and the Dodd-Frank financial reform, had heaped unprecedented amounts of regulation onto the business sector at a time when full-time jobs were scarcer than they'd been in three decades. So to bolster his economic bona fides, Obama was now advocating greater executive-branch power to make the federal bureaucracy more responsive to business concerns. "Let me be clear," he vowed. "I will only use this authority for reforms that result in more efficiency, better service, and a leaner government."

The target of Obama's tweaking that day was the Department of Commerce, the century-old rectangular behemoth on Constitution Avenue. Currently headed by the wealthy Chicago businesswoman Penny Pritzker, whose family fortune derives from the Hyatt hotel chain, Commerce's mission is to "promote job creation and improved living standards for all Americans by creating an infrastructure that promotes economic growth, technological competitiveness, and sustainable development." Yet even the president recognizes that Commerce, like many other federal agencies at the nexus of the government and the private sector, has often been better at promoting its own bewildering bureaucratic growth.

"Right now, there are six departments and agencies focused primarily on business and trade in the federal government," Obama said. "In this case, six is not better than one. Sometimes more is better; this is not one of those cases, because it produces redundancy and inefficiency. With the authority that I'm requesting today, we could consolidate them all into one department, with one website, one phone number, one mission: helping American businesses succeed. That's a big idea."

It may have been a big idea, but with a Republican-controlled House of Representatives, Obama's expanded consolidation authority was a non-starter. That didn't stop him from floating a proposal, just over a week before Election Day, to create a brand new cabinet-level position-the secretary of business-presumably to tidy up the current byzantine sprawl that includes such non-commercial agencies as the National Oceanic and Atmospheric Administration (NOAA) and the Census Bureau.

After winning re-election handily, the president brought up the business secretary idea a few more times, but it ran up against the same unfriendly legislative math. The lesson is clear: You can campaign against the Department of Commerce, you can complain periodically about its activities and results, but even proposals for cosmetic surgery on the 42,000-employee agency are likely dead on arrival. And eliminating the thing altogether is not on the agenda of anyone near the levers of power.

From T.R. to Hoover to Byzantium

The best thing that you can say about the Department of Commerce is that it's small by Washington standards. The department's budget of $8 billion in fiscal year 2012 was just a thirteenth the size of Labor, which itself is a fraction of the Treasury ($443 billion) and Defense ($655 billion).

But there's small, and then there's small. Facebook, whose 2013 revenue ($7.9 billion) was essentially the same as Commerce's budget, managed to earn that money with a fifth the number of employees. eBay has a slightly smaller workforce than the department, but double the revenue and a much more convincing story to tell about enabling commerce between individual citizens. The Department of Commerce is physically massive, organizationally obscure, and technologically tethered not to the 21st-century Internet but to the early-20th-century Progressive Era.

In 1903, President Theodore Roosevelt inaugurated the Department of Commerce and Labor as part of his reform crusade. Within five months, the bureaucracy grew from one official, the secretary, to an impressive 10,125 employees around the nation. The labor component was hived off into its own department in 1913.

The newly single Department of Commerce was not entirely sure what to do with itself until 1921, when the energetic politician Herbert Hoover became secretary. Prior to Hoover's tenure, the post was seen as something of a joke-the department's vanity history of itself, From Lighthouses to Laserbeams, confesses right there in the title that one of Commerce's most important duties was managing lighthouses.

"Hoover saw the post as grander: an opportunity to show the country what it could do if it had a national engineer," Amity Shlaes reports in The Forgotten Man, her recent history of Franklin Roosevelt. "When the recession hit, he urged President Warren Harding to host a conference with business and labor on creating employment. The idea was that Washington could encourage business, and perhaps the states and labor, to work together to make the economy grow."

Between Hoover's ascension to secretary and his departure in August 1928 to run for president, the department would vacuum up governmental organizations in a bid to increase its influence. In 1925, Commerce snatched the Bureau of Mines and the Patent Office from the Department of the Interior. The following year saw the creation of an Aeronautics Division at Commerce, a precursor to the Federal Aviation Administration. And a short-lived Radio Division was created in 1927.

Hoover did not forget where he came from after moving to the Oval Office. Among his first actions as commander in chief was to lay the cornerstone of the Department of Commerce building (now the Herbert C. Hoover building) using the very trowel George Washington used to lay the cornerstone of the Capitol. The building, which was constructed between 1929 and 1932 and cost $17.5 million to build ("over $2,000,000 more than the Louisiana purchase," From Lighthouses to Laserbeams brags), was then the biggest office building in the world.

It's a good thing they left room to grow: By 1969, Commerce had 25,400 employees; by 1972, after President Richard Nixon set about monkeying with the economy, the number had climbed to 35,000. Today, that figure is more than 7,000 higher.

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  • ||

    Obama saved the economy, so can't we just trust that he knows the value of Commerce better than we? Plus, he cares, so we can believe what he says about leaner government. Also, BOOSH, racists, income inequality, extremists and hate-the-poor.

    Finally, racists.

  • x4rqcks3f||

    "Let me be clear," he vowed. "I will only use this authority for reforms that result in more efficiency, better service, and a leaner government."

    I have this feeling that "Let me be clear" isn't on the teleprompters anymore, and every time Obama adds it his speech writers roll their eyes.

  • Drake||

    And his audience braces themselves for some extraordinary bullshit.

  • pan fried wylie||

    The Pavlovian responses vary. Some salivate, some recoil in horror, some bend over to fellate their warboners, some stock up on guns and gold, etc

  • John C. Randolph||

    No, when Obama attempts five whole syllables without the teleprompter, you get "you didn't build that".


  • Rich||

  • EDG reppin' LBC||

    That was pretty bad. Not an extemporaneous speaker. He wouldn't have even made my high school speech & debate team. Of course, we were the best team in Indiana when I was doing extemp. Fun fact: my speech/debate coach was a speech writer for Dan Quayle.

  • ||

    I tried to watch it all, but I just couldn't.

  • EDG reppin' LBC||

    The sad (but laughable) parts are when he tries to make excuses including, "I haven't been able to sleep for two days" and, "I can't hear myself".

  • wareagle||

    right along with "make no mistake."

  • ||

    Let me be clear, there is no sugarcoating it, these catchphrases are becoming tiresome, make no mistake.

  • WTF||

    How the Department of Commerce smothers what it's supposed to promote

    I bet he thinks the Ministry of Truth was actually supposed to promote the truth.

  • UnCivilServant||

    Do you need a chat with the Ministry of Love?

  • Ted S.||

    Is that the kind of love between a man and a woman, or the love of a man for a fine cigar?

  • Rich||

    Why did the weather-measuring NOAA wind up in the department after a Richard Nixon-led restructuring in 1970? "It had something to do with President Nixon being unhappy with his Interior Secretary for criticizing him about the Vietnam War," Obama said, with a chuckle.

    That's a real knee-slapper, Mr. President.

  • CampingInYourPark||

    A similar invitation for bids to supply 46,000 rounds of hollow point bullets along with 500 paper targets was issued by the National Oceanic and Atmospheric Administration (NOAA). That ammunition is destined for the NOAA's National Marine Fisheries Service (NMFS), which is tasked with protecting fish stocks from depletion, marine mammals from extinction, the livelihoods of commercial fishers, the hobbies of recreational fishers, and the health of seafood consumers."

    Maybe we can get the NMFS agents some Aquaman uniforms

  • Heroic Mulatto||

    I find it absolutely bizarre they knew enough geekery to write this Aquaman gangsta rap, yet not get the bright idea to actually write and perform the lyrics from Black Manta's point of view.

  • Drake||

    I work for a corporation with 40-something-thousand employees. We have Marketing, Sales, Operations, Logistics, Production, Finance, R&D, Legal, HR, and thousands of customer service employees.

    I cannot imagine what the Commerce does with 42,000 employees. Would anyone engaging in actual commerce notice if all of them were fired tomorrow? Some would miss the Patent Office, the rest wouldn't be noticed.

  • Rich||

    There's nothing magic about Commerce in this regard.

    I saw years ago an interesting "modest proposal". There was more to it, but the gist was that every year a random 10% of the Federal workforce should be laid off and not replaced. I suspect many years would pass before "anyone engaging in actual commerce" would notice.

  • ||

    If by anyone, you are excluding the unions that collect fees from them and pols that pander to them for votes, then you are correct.

  • Night Elf Mohawk||

    And the Department of Education smothers education. It's almost like a pattern.

  • Raven Nation||

    It's almost like a pattern

    It is. It's an indication that our beloved government is still woefully underfunded and understaffed.

  • OneOut||

    "Right now, there are six departments and agencies focused primarily on business and trade in the federal government," Obama said. "In this case, six is not better than one. Sometimes more is better; this is not one of those cases, because it produces redundancy and inefficiency. "

    But sometimes redundancy and inefficiency is better ?

  • The Late P Brooks||

    "I ran for office pledging to make our government leaner and smarter and more consumer friendly," President Barack Obama reminded a group of small businessmen at a January 2012 White House gathering.

    That's funny.

  • Rich||

    "Let me be clear. In other words, I'm a politician."

  • CampingInYourPark||

    China faces duties ranging from 20.85% to 72.69%, while Vietnam faces a tariff between 52.67% and 59.91%. Added on to other tariffs that the U.S. levies, this means that some Chinese wind turbines could face a nearly 100% tariff.

    These tariffs are in the preliminary planning stages, and will be finalized by votes by both the Commerce Department and the U.S. International Trade Commission. These will happen sometime later this year, or in 2013.

    This move comes on the heels of a similar decision by the Commerce Department to slap tariffs on Chinese-made solar power equipment earlier this year.

    While they probably don't need 42,000 employees to operate, to say that actions of the DoC go unnoticed is a bit of a stretch. How else are we going to protect our pet industries?

  • John||

    And gee, I always thought Congress was the law making body and thus set US trade policy and tariffs. Silly me. Maybe I am old school, but I find the idea of some executive board rather than Congress raising tariffs to be a bit disturbing.

  • John||

    This is one of the collateral effects of the feds regulating everything. It used to be that customs was about collecting tariffs. When that was the only job, the damage commerce or customs could do was limited to how high the Congress set the tariff. Once the feds started regulating everything, then customs became about more than just collecting money. Now they had to insure that the imported goods met the increasing leviathan of US regulations. That gave customs a slew of new jobs and the accompanying mission creep and susceptibility to corruption that came with it.

    Most people have no idea how customs actually works. They don't and couldn't if they want to search every cargo container coming into the US. Instead they search selected containers. There is a place called the National Targeting Center in Washington. They apply very closely held algorithms to determine what cargo entering into the United States is going to be checked.

  • John||

    That is a perfectly reasonable way to do things. In fairness I have always found the NTC to be an amazingly efficient and professional place by any standard let alone by government standards. That said, the place is only as good as the algorithms they use to target cargo. It is not difficult to imagine those things being manipulated for political purposes in order to help cronies and punish their competitors or just to allow the politically connected to import without checks at all.

    I am not saying this is happening. It is however a possibility that is inherent in the entire system and only increases as the customs system gets more complex.

  • ||

    I once saw an honest-to-god, no-shit website promoting the idea that Wal Mart was importing nuclear materials from China as a result of every shipping container crossing US borders not being inspected, and calling upon locking down all imports and confiscating Wal Mart's profits as recourse. I thought it was a satire site at first.

  • John||

    How about we get rid of all tariffs on all goods? If the Chinese or Vietnamese want to subsidize selling us shit at below cost, I don't see why we should stop them.

  • Night Elf Mohawk||

    Because once they drive all of the US firms out of business they'll raise their prices and hold us hostage. Or something.

  • John||

    Of course, because there isn't any competition from anywhere else or anything. And we all know those wily Chinese have the ability to subsidize every industry forever.

    Subsidizing your export industry is a road to nowhere. We shouldn't worry when other countries do it.

  • ||

    Was it Krugman that argued not long ago that by constantly fucking with businesses and making things difficult for them the government made them stronger and more efficient? I don't remember and I am too lazy to look it up.

    That is how a sadistic bully rationalizes his behavior.

  • John||

    And to think that Krugman made his reputation writing about international trade. He really is an example of a once serious person going insane.

    And the government fucking with businesses needless to say doesn't make them stronger. It does however make some businesses a lot weaker by making the path to success getting the government to fuck with or shut down your competitors rather than making a better product.

  • dantheserene||

    Note that the same rationalization is used to explain why god(s) mess with the faithful.

  • ||

    When my grandfather died a preacher that i did not know showed up at the funeral. While I was alone in the dining area of the funeral home getting some coffee he approached me with this:

    "God never tests us with more than we can bear"

    My response:

    "Really? If I were a weaker person my grandfather would still be alive?"

    He got very red-faced and disappeared.

    I would not have been such an asshole to him if he were genuinely trying to comfort me, but it was painfully obvious that he was just trying to recruit me.

  • ||

    it was painfully obvious that he was just trying to recruit me.

    He was probably slightly misquoting Corinthians, and I think your assumptions about his motives may have had more to do with your mindset than his. Very few funerals or other tragic events go by where some pastor doesn't offer up a mindless quasi-biblical truism such as that, fully believing that it contains some profound truth and source of comfort to the grieving.

  • Drake||

    In the old days it was competition that made businesses efficient.

  • John||

    I am preaching to the choir here about free trade I know. There is more value to free trade than just consumers being able to buy cool stuff cheaply. Protectionism makes domestic businesses worse in more than just making them lazy because they have a captive market. Protectionism keeps your companies from being competitive on the international market. If you are manufacturing something, protectionism keeps you from being able to buy the best equipment or component parts. If the best automated plasma cutter is made in China and the Commerce just slapped some huge tariff on it, you are stuck buying and inferior one and being at a disadvantage to your competitors in countries that can get it at a good price.

  • ||

    Yes, but if you have to build your own plasma cutter from scratch at 20x the cost, paying red-blooded Americans union wages, then they'll have more money (to buy fewer goods at higher prices). Everybody wins!

  • OneOut||

    So you move your plant to China.

  • Agammamon||

    "I ran for office pledging to make our government leaner and smarter and more consumer friendly,"

    When the hell did he *ever* pledge that?

  • Robert||

    lines of code are not all that much different from lyrics in a song-which are copyrightable, but not patentable.

    They're different enough to make a good argument for patent protection from the former. Ways of doing things via a computer have utility, which song lyrics don't. You might as well say you don't need utility patents for gadgets, when they can be protected by design patents. There's a difference between the working of a device and its appearance.

    If software were only copyrightable, it would be easy enough to "translate" protected code into other computer languages where it would be unprotected (or worse, copyrighted by someone else). The analogy that this is infringement the same way xlations of copyrighted literature are might not stand up, because natural language is different from computer languages.

  • Eric Bana||

    In 1903, President Theodore Roosevelt inaugurated the Department of Commerce and Labor as part of his reform crusade.

    Remind me to add that to my list of reasons why I hate Teddy Roosevelt (and John McCain for constantly invoking him as his favorite president).


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