I wouldn't call that first paragraph a degradation in quality. I'd call that too much government. I thought you meant politicians were getting dumber or more corrupt.

The point is that we're having too much (and increasingly more) bad government, this aside from the question of whether one accepts the libertarian principle that more government is always worse. As for politicians (in the sense of people running for elective offices), they are only one relatively small element within the government, and nowadays certainly not the most significant one.

I don't understand the second paragraph.

Try to imagine some real-life examples of getting things done in a straightforward, commonsensical, and customary way, where people's personal incentives and personal responsibilities are more or less aligned with the desired goal -- the way things are normally done in private life and well-run business. This may turn out to be inefficient, unfair, wasteful, irrational, etc. in many ways if scrutinized rigorously from an idealistic perspective, but it's still fundamentally sound and effective. Then try to imagine attempts to get things done by large faceless bureaucracies lacking any locus of personal responsibility, or by people driven by ideology that for them trumps reality whenever there is any conflict. (Or by some diabolical mixture of the two.)

Basically, my thesis is roughly that the way government works in the English-speaking world has been steadily drifting from the former to the latter way of doing things for a very long time. (Which then influences both the scope of things it attempts to do and the quality of work at whatever it undertakes.)