Charles Hugh Smith: America's legacy systems are like stars about to go super-nova.
There are two problems with the vast, sprawling legacy systems we've
inherited from the past: they're dysfunctional and cannot be
fixed/reformed. The list of dysfunctional legacy systems that cannot
be truly reformed is long: Social Security, with its illusory Trust
Funds and unsustainable one-to-two ratio of beneficiaries to full-time
workers; Medicare, 40% fraud and ineffective/needless care; the
healthcare system (if you dare even call the mess a system), 40% paper
shuffling and 25% defensive medicine and profiteering; weapons
procurement--the system works great if you like cost overruns and
programs that take decades to actually produce a weapon; higher
education--costs have skyrocketed 700% while studies (Academically Adrift)
have found that fully a third of all college graduates learned little
of value in their four years; the financial system--now that we've given
the Federal Reserve oversight over Too Big To Fail Bank practices, do
you really think we'll ever get rid of TBTF banks?
There are two problems with the vast, sprawling legacy systems we've
inherited from the past: they're dysfunctional and cannot be
fixed/reformed. The list of dysfunctional legacy systems that cannot
be truly reformed is long: Social Security, with its illusory Trust
Funds and unsustainable one-to-two ratio of beneficiaries to full-time
workers; Medicare, 40% fraud and ineffective/needless care; the
healthcare system (if you dare even call the mess a system), 40% paper
shuffling and 25% defensive medicine and profiteering; weapons
procurement--the system works great if you like cost overruns and
programs that take decades to actually produce a weapon; higher
education--costs have skyrocketed 700% while studies (Academically Adrift)
have found that fully a third of all college graduates learned little
of value in their four years; the financial system--now that we've given
the Federal Reserve oversight over Too Big To Fail Bank practices, do
you really think we'll ever get rid of TBTF banks?
One place to start an investigation of any legacy system is to ask: how would we design a replacement system from scratch? The
gulf between a practical, efficient replacement system and the broken
legacy system is a measure of the legacy system's dysfunction.
We all know why legacy systems cannot be reformed or replaced: each has a veritable army of constituents and vested interests. Every
single person drawing a check or payment from the legacy system fears
reform of any kind, as each fears that their place at the feeding trough
might be threatened.
As a result, reform is necessarily superficial, a simulacrum of real
reform that satisfies the PR need to "fix the system" but actually
hardens the system against future reform by adding layers of complexity
that act as defensive complexity moats.
There is a fundamental asymmetry between those threatened by reform and the reformers. The
reformers are trying to save the system from eventual collapse, but the
benefits of their efforts often fall to the cohort of young people who
have not yet become voters or entered the workforce; these citizens
don't exist politically.
Meanwhile, those drawing paychecks, benefits or payments from the legacy
system will fight with every fiber of their being to protect every cent
of "their fair share." (Needless to say, every share is fair and
deserved.) Those resisting reform are fighting to the death, so to
speak, while the reformers have no equivalent motivation or political
persuasion.
Corporations threatened by reform launch a ceaseless lobbying/PR attack
on the reform, either watering it down, eviscerating the regulatory
structure or co-opting the reformers into accepting a superficial reform
rather than walk away with nothing.
Legacy systems have hardened into bureaucracies whose primary purpose
is defending the fiefdom's budget and power from any threat. I prepared this chart to illustrate the life-cycle of bureaucracy:
As revenue flatlines and pressure for real reform mounts, the
embattled institutions find that propaganda and facsimiles of reform are
cheaper "solutions" than real reform. This is the key driver behind
the flood of propaganda and all the phony "reforms" laid out in
thousands of pages of befuddling bureaucratic self-preservation.
Real reform would mean powerful constituencies would have to take real
reductions in staffing, power, benefits and in their share of the
national income. Rather than reveal this double-bind--reform is
impossible but the Status Quo is unsustainable--the legacy system
deploys its gargantuan resources to laying down a smoke-screen of bogus
reforms and ginned-up statistics.
America's legacy systems are like stars about to go super-nova. They
have increased in size to the point where their stupendous mass
guarantees that once their energy source (as measured in fossil fuels
and money) falls below a certain threshold, the institution will
collapse inward on itself.
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