To Washington
After Chicago, Niskanen joined the RAND Corporation as a defense policy analyst in 1957, using his economic and mathematical modeling skills to analyze and improve military efficiency. Among his accomplishments was developing a 400-line linear programming model of the Air Force transport system. His programmer for the model was a young William Sharpe, who would later win the Nobel economics prize.
Because of his work at RAND, the incoming Kennedy administration appointed Niskanen director of special studies in the Office of the Secretary of Defense. There, he became one of Defense Secretary Robert McNamara's original Pentagon "whiz kids" who used statistical analysis to examine Defense Department operations.
During his time at the Pentagon, Niskanen became disillusioned with the nation's political leadership, later claiming that the president and other executive branch officials "lied with ... regularity" to the public. He frequently quipped that this disillusionment sometimes caused him to question whether the United States truly landed on the moon in 1969.
Niskanen left DOD in 1964 to become director of the Program Analysis Division at the Institute of Defense Analysis. In 1972, he returned to public service as assistant director of the Office of Management and Budget, though his internal criticisms of Nixon administration policy would make his tenure at OMB short.
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