IF THERE IS a key intersection in the government at which the public interest is most likely to be sacrificed it is where the self-protecting bureaucrat and the self-promoting assistant secretary meet. The cabinet secretary is so busy conning the press, the president and the Congress that he has no time left to run his department. This executive function is performed by his assistant secretaries, so it is they who actually have the day-to-day job of leading and inspiring the bureaucracy.

The catch is that the standard assistant secretary is not a politician who sees his future as dependent on the overall performance of his department and the administration of which he is a part, but a badge-collecting meritocrat who goes from job to job every two years or so, adding to his list of distinguished credentials. The practical problem is that he is interested in performing in his present job for only the year or so it takes to stir up the admiring talk that will bring the next offers. As he chooses and negotiates among these offers, his department suffers for his attention, his focus is no longer on it, so that by the time he has left for his next step up the career ladder, the department is in a shambles and he is often described as having left one step ahead of the sheriff. This second year in power is also often marked by extensive travel in the manner of lame duck congressmen.

The current rage for the roman a clef threatens to totally confuse modern history.Was J. P. Morgan the man described by E. L. Doctorow? Were the real Rosenbergs as innocent as "The Public Burning" suggests? The latest novel to raise this sort of question is "The Whole Truth" by John Ehrlichman, where a character the reader is supposed to recognize as Sam Ervin is revealed to be an evil old fraud who makes behind-the-scenes deals with a White House under congressional investigation. Is that what you really think of Ervin, Mr. Ehrlichman? And do you really know, as your book suggests, that George Gallup doctored poll results to suit Richard Nixon? Then why not make your accusations openly?

One of the reasons designer and brand names are now on the outside of clothing is that in modern America people tend to define themselves by their taste. This is particularly so in the big cities, where, if you want to impress that interesting-looking man or woman at the crowded party, you have to flash your taste badges first. Of course, when the flashing is done too aggressively, it turns into a series of put-downs that may intrigue but might alienate the other person. A marvelous example of the latter occurs in Diane Keaton's first scenes in "Manhattan." She is obviously interested in demonstrating that she is more sophisticated than the people she's talking to, and it's great fun to laugh at her. A more subtle form of self-definition in terms of taste comes near the end of the film when Woody Allen recites the list that identifies him: Groucho Marx, Mozart's Jupiter Symphony, Louis Armstrong's recording of "Potato Head Blues," Flaubert's "Sentimental Education," Willie Mays, Cezanne's still lifes of fruits. In contrast to Diane Keaton's, Allen's list is charming. You'd think exactly what you're supposed to think: What a wonderful, interesting man this must be to have such a delightful mixture of enthusiasms. The problem is that it's still badge-flashing. In the early scenes you thought Woody knew what was wrong with the gang at Elaine's. What develops, however, is that he simply knows how to play their game better than they do.

In his attempt to get to know rank-and-file government employees better, Jimmy Carter invited 13 of them to the Oval Office in May. His reward: The American Federation of Government Employees has filed an unfair labor practice against the president, alleging that he violated federal labor-management rules that require the government to negotiate with union representatives.

I find myself in the embarrassing position of having a kind word to say about one oil company, Mobil. Its president, William P. Tavoulareas, has opposed Carter's decontrol program, urging the industry to forego price increases on oil already under production and recommending decontrol only for newly discovered oil. While it may be that Mobil has less to gain from raising prices of old oil than some other companies, its position on decontrol still represents a vitally important step toward truly constructive thinking by big business. The main way out of our present economic mess is incentives that are precisely tailored to create new plants and new production. Although I reject the goal of energy independence - I think we should keep our oil in the ground and use rationing to reduce demand and force down OPEC's prices - those who do accept that goal should realize that Tavoulareas has a better way of attaining it than Carter.

Because of the twice-a-year cost-of-living raises, 2,900 federal retirees now make more than anyone presently employed in the civil service. To paraphrase Nicholas Von Hoffman, only the United States government would give more money to those who don't work than it pays to those who do.

Mayor Marion Barry has proposed a payroll tax to finance completion of the Metro. This proves that Barry has never run a business. Otherwise he would know that payroll taxes - the social security tax is one - can kill. Taxes on net income, on the other hand, cannot destroy a business. If you don't have a profit from which to pay the tax, you don't have to pay. It is unfortunately true of many liberals like Barry that their knowledge of business is so slight that they don't understand the difference.

For those investigative journalists who passed up the opportunity to pursue the connection between Vietnam and the copper-centered coin, I offer one more chance for fame and fortune. Who were the secret backers of the Ayatollah Khomeini? Who had the most to gain from the disruption of Iranian oil production and the resulting world shortage of petroleum? The oil companies? James Schlesinger? No. It's the Japanese car companies. In January they had 500,000 Subarus, Toyotas, Mazdas, Hondas and Datsuns ready for sale in the United States. A statistician for Ward's Automotive Reports is quoted as saying, "There must have been a bunch of crazy optimists back in Tokyo." Now what self-respecting conspiratorialist would accept that explanation!

When did the federal bureaucracy turn into the lethargic, self-protective monster it is today? The tendency to become lethargic and self-protective has always been there, but the federal bureaucracy did not become monstrous in size until the 1933-1945 period. But then it was inspired by the struggle to defeat the depression and win the war, and by an exciting leader, FDR.

The decline, it seems to me, began with the end of the war and the death of FDR in 1945. Truman may be remembered fondly today, but in the late Forties he was not perceived as an exciting and challenging leader by federal workers. The loyalty program he established in 1947 was the first step toward making them value caution and keeping out of trouble. Then came the attack from Congress, from William Jenner and Joseph McCarthy, the Who Lost China mob. The defeat in 1952 of Adlai Stevenson, who seemed to reawaken the idealism that had been dormant under Truman, was the final blow. Eisenhower was not one of them. The result was that the ritualization of self-protection, the sense that the people at the top didn't share your goals, didn't understand or didn't care about your ideas - unless your ideas were Red, which meant you would be fired - all this became habitual in the Fifties.

By the time Kennedy arrived, this bureaucracy had become set in its ways, and any flurry of ardor that may have stirred under JFK or in the first years of Johnson's Great Society was snuffed out by Vietnam and Watergate.