Wednesday, August 19, 2009

Government is not a business

It's common for a political candidate to run on the idea that he or she was in business, and that experience will apply to government. The politician asserts that government ought to be run like a business.

This is a load of hooey. Gov Otter has tried to use this approach, and actually seems to persist in the endeavor, despite its lack of success. His approach has been somewhat businesslike. He has acted like the boss/owner/manager in that he seems to think that he can just hand down an edict and it will be carried out. Think of last year when he demanded $240 mil (or whatever it was) for transportation. He correctly identified the need, but, he's not the boss of the legislature and can't just order it to cough up the dough, and it refused.

Otter decided to align state employee compensation with the private sector, which is admirable. He actually managed to cut benefits, which he saw as being higher that the private sector. Great. Unfortunately, he hasn't managed to raise salaries like he said he wanted to, and it appears unlikely he'll get this done. He sure hasn't been talking about it much lately. Anyway, he hasn't been able to run the state like a business, and the result is that state employees are now worse off.

State government provides services, and does not earn a profit. It the state were a business, we'd have way fewer paved roads, for example, and the rural areas would still be rattling along on dirt roads. This would hinder their agricultural production, it would hinder getting crops and goods to market, and it would hinder their access to buying products. It would reduce the selection available in the cities and probably drive up costs.

That's infrastructure, and only government can afford the huge projects. Why would Micron, or HP, or whatever business, pay to repair the old bridge over the Payette River? They wouldn't. Well, I suppose some business might, but then they're going to charge dearly to use the bridge. How about paving the road to Murphy? Who'd do that? Given the cost, if a business were to do it and charge for it, either the cost to drive on it would be prohibitive, or the pay out would take a century. It just wouldn't happen.

Things like infrastructure are so important, and so unlikely to be provided otherwise, that only government can do it. I submit that health care is infrastructure. To put it in terms that uber businessman Walt Minnick can understand, health care is an investment in human capital. Really, it's not unlike roads, safety services, electricity, water and other utilities. A productive and ordered society must have it.

Human productivity goes down when the humans are sick, or are bankrupt because of medical bills. Just like leaving the rural areas to drive on dirt roads, which hurts the rest of the state, allowing people to be hurt or ill hurts us all in lost productivity.

Counties have an indigent fund that they use to pay hospital bills of indigents. That's taxpayer money. If we had universal health care, that tax goes away, a benefit to all the citizens. (Whether it goes away or just gets shifted is another question; depends on savings in the health care system.)

Anyway, I'm really sick of hearing that government should run like a business. How maddeningly stupid. That's precisely the same as saying business should run like government. Or that a train should run like a car. Or that an airplane should run like a submarine.


Serephin said...

Great post, but, c'mon -- be resonable... a subplane would be so cool. :)

Alan said...

Well, yeah, that's true. I think I read about one recently, now that you mention it.

Anonymous said...

Well put.

" care is an investment in human capital. Really, it's not unlike roads, safety services, electricity, water and other utilities. A productive and ordered society must have it."

Sara E Anderson said...

The only reason anyone ever makes money is because of ineffeciencies in the marketplace (i.e. profit). We're all middlemen.

fortboise said...

I worked in business for many years, and more recently I've worked as a contractor on some government projects. I get an occasional look into "how government works" as a result, and I have to say there are more similarities than differences.

Big bureaucracies have a lot in common, and certain improvements do apply to both.

But there's a more direct refutation of the silly notion of "if only": Dilbert. Scott Adams' humor is inspired by how well business works.

But that's at the detail level. Big picture, you're exactly right. Government's goal is to improve public welfare by protecting and enhancing the commons, and by constraining the abuses that arise from unequal economic power.

"Business" has a way simpler goal: make profit.

vijayanand said...

Recession is a term that would we well known to all of us. It’s the period of dull trading of a business or widespread economic difficulty. Several ace economists share the same view that the period of recession is at its last stages. According to them recession was at its infancy towards the end of the year 2007. Here we would like to recall that a similar scenario that was witnessed in the year 2001 and the subsequent bloom of IT and Its sectors. Hence the statement of economists assumes significance. Let us hope for a positive comeback again. However the change will not take place in an overnight and just the beginning of end of recession has started. This statement by experts seem to be credible as the soaring crude oil prices have been stabilized in the recent past. Although it’s rising again, it is expected definitely to not to touch its peak as before. Several countries saw their governments cutting off the fuel prices accordingly. So the economy may not be as brisk as before but still gradually improving, making us heave a sigh of relief. You may start planning to buy your favorite vehicle. Job seekers need not spend wastefully the hard earned money of their parents in the name of job search expenses. So gear up !

vijayanand said...

Surveys conducted by reliable sources reveal that around ninety percent of the web traffic ( the request- response process taking place between server and client) is predominantly derived based on the list populated by search engines. In simple terms , people visit uncommon websites only if the search engine projects them at the top of its listing. This gives no wonder as in today’s world life has become mechanical and shortage of time is the problem faced by almost all the illiterate people who have the knowledge of browsing the net to look up for information. In particular most of the users irrespective of the geographical boundaries do not have patience to even have glance at the names of websites displayed beyond first two or three pages of Google. So pushing forward your website so as to get displayed within those top twenty or thirty website list will enhance your prospects of earning money through advertisements greatly. For a search engine that is looking into the future at its early stages, the relevance of results is very indispensable in creating a rigid platform for ad revenues. So you cannot use short cut methods such as canvassing the management of search engines by paying an amount as bribe or by resorting to cheap strategies like just typing the important keywords hundreds or thousands of times as an ardent devotee of God would write the name of his favorite God repetitively in a paper to please his God. The search engines reportedly use complex and robust algorithms which are intelligent in providing ranking to WebPages in a wise manner after a thorough in-depth analysis. Some people few years ago used to create ‘spam websites ‘ – the ones whose purpose behind the creation is to promote the ranking of some other websites. Google is cautious that if it detects a new website for a few months it will not alter its original rankings. During the intermittent time it checks whether the website is intended for long term.

Anonymous said...

Here is a great chance to drive a large number of visitors to your blogs and websites for free.

Submit your websites, blogs, videos to and get 1000s of targeted visitors everyday for free. It also helps your websites/blogs gain valuable backlinks.

Let the other bloggers cast their votes to push your posts up for a greater visibility. Enjoy a free, huge traffic to your sites.