The Federal government is not a business but people are always saying they want the government to run more like a business. This election may be a referendum on just this issue.
Government is composed of people doing the work of the people. Business is composed of people doing the work of a finite group of people, that is, owners and shareholders. What would be the benefit of running the government like a business? Government does follow administrative procedures that attempt to fairly implement the laws created by the representatives of the people (i.e., legislatures). Trying to be fair to everybody often results in absurdly complex bureaucracies. Still, the government is both efficient and effective at its job. The government creates all kinds of new technologies for businesses to capitalize on like pharmaceuticals and all the NASA and military developments. It also does its own inherently-governmental work, like policy development, budgeting, intelligence, security, and criminal prosecution, more effectively than contractors could because contractors don’t understand government systems and constraints. When the government needs to build or manufacture something, they provide direction and cost accounting, but rely on the private sector to do what they know best.
So, why should the government run more like a business? What would be better for the American people? Consider this.
The President vs. the CEO
The President and Corporate CEOs both have enormous power. The President is elected by voters; corporate CEOs are appointed by their Boards of Directors. The President can serve four, and sometimes, eight years. CEOs may serve for weeks or decades. Both get fabulous benefits and perquisites, often for life. Both can be kicked out of office, although it’s easier to fire a CEO. A big difference here is salary. The President earns $400,000 per year. About 90% of corporate CEOs make more than that. The CEO of Walmart , the only corporation with close to as many employees as the Federal government, makes about fifty times more than the President.
Run as: Government: There are good and bad Presidents, and good and bad CEOs. We might as well stick with the cheaper alternative where we have some say in who gets the job.
Congress vs. Board of Directors
Our Government has the equivalent of a 535-member Board of Directors, namely Congress. For comparison, even huge companies usually only have a dozen or so members. Both sets of directors might be paid $100,000s and can make additional money outside their director jobs. Corporate Directors might only meet a few days per year. Congressmen and women meet most of the year, albeit with long vacations. But the big difference is this. Corporate Directors normally only consider issues brought the Board by the CEO, and usually, though not always, accede with the CEO’s wishes as a group. Congress considers the President’s requests but acquiescence is anything but guaranteed. More significantly, Congress can initiate projects and direct how money is spent. That’s what pork is all about. Even individual members of Congress can affect operations. They can put secret holds on Presidential appointments and add amendments to legislation. No Corporate Director has that power.
Run as: Business. It’s a tough call but after seeing how the 112th Congress has performed, having a more businesslike Congress would be better. That might not be so clear a choice, though, if the President weren’t so benevolent.
The Supreme Court vs. the Legal Department
A CEO can ignore anything the Legal Department tells him, though sometimes at his or her own peril. He can fire lawyers he doesn’t like and then hire as many new ones as he wants. He can tell them who to sue and who to settle with. The President is stuck with the Justices and Judges he inherits, he can’t fire them, and he has to do what they say.
Run as: Government. In government, it’s all about balancing opposing powers. In business, it’s about concentrating power. Of course, we all know what absolute power does.
Lobbyists vs. Shareholders
Lobbyists represent powerful companies and special interest groups. They are well organized and well funded. They can act individually or form allegiances. Shareholders are usually not organized or funded, and must act as a group. They have much less power to direct their organization.
Run as: Business. It’s much easier to keep shareholders in line.
Foreign Governments vs. Competitors
Government puts on a good diplomatic face then they’ll declare war on you. Business puts on a good face at social events all the while scheming to destroy you. While there are many cases of businesses working together as allies, there aren’t any cases where a company sends economic and other forms of aid to build up their competitors. Usually they just steal what they can, like employees and customers, and then grind them to dust in the marketplace. Also, not as many civilians get killed in business wars even if you include crime families.
Run as: Toss up. We’ll be thought of as imperialist Americans either way.
IRS vs. Accounts Receivable
This is scary on both sides. If they can catch you, the IRS will pursue you and throw you in jail when you don’t pay. Debt collectors know who you are and will harass you to no end.
Run as: Business. AR departments only have CPAs and lawyers. Government has agents with guns and the Judges are in their pockets.
Treasury Department vs. Accounts Payable
Many government agencies pay bills but it all passes through the Treasury Department. Neither the government nor business can pay bills if they don’t have the money, but the government has never run out of money … yet. Plus, the government is required by law to pay their bills within a limited time period. Business has more flexibility to manage their cash flow.
Run as: Business. “Yes Ma’am, your Social Security check is in the mail.”
Civil Servants vs. Employees.
They’re both pretty much the same. Some work hard and want to do a good job, some don’t. Some have good bosses and some don’t. Some do critical, meaningful work, some work for Fox News. They all need their pay checks.
Run as: Toss up. They’re all tax payers, too.
Hiring and Firing
The government has complicated procedures to ensure fairness in hiring and firing. They strive to have a socially diverse workforce and they hire the handicapped. They only hire citizens and legal aliens. Businesses can hire whomever they want, fire at a moment’s notice, and outsource jobs overseas without reprisal. Both have unions, only business employees need them more.
Run as: Government. If we ran the government like a business we would get to outsource all the tax collector jobs. But if you have a soul, you gotta go with government.
Transparency vs. Confidentiality
The government keeps a lot of secrets but is supposed to be more transparent. Business demands confidentiality so they can maintain their competitive advantage.
Run as: Government. Little good comes from secrecy.
R&D vs. Product Development
The government hires the best scientists in the country to conduct basic research that will serve society for generations. They even share their findings, except for the military stuff, with the world. Business tries to produce something they can sell. Some of their research is original and some comes from government research, but most is just slight modifications in a new package. Yeah, we love our Post-It Notes, but that’s the way it is.
Run as: Government. You do the math.
Business is always complaining about regulations. Well, government agencies have to comply with those regulations and more. The Federal Acquisition Regulations alone make buying anything an ordeal worse than the labors of Hercules.
Run as: Business. No more Buy American Act restrictions and forget about minority and small-business set aside programs.
Government runs on the taxes it collects. Business runs on the sales and profit it makes. Citizens and consumers have little say in how much they have to pay in either case.
Run as: Government. You can’t boycott government.
Both business and government are supposed to operate by ethical guidelines. In government, you’ll be investigated by Inspector Generals and Congressional Committees. If you belong to the wrong party, you’ll be punished. In business, you’ll just be fired. You only get investigated in the business world if the government does it.
Run as: Government. Hard to imagine but it’s better than the alternative.
Run as: Government. Like you even had to ask.
Government is supposed to cut back and get smaller. Business is supposed to grow and expand. Too many politicians get these two mixed up.
Run as: Toss up. Both are more difficult than the other side will admit.
If a good or service is so unique or critical that it needs to be controlled by one entity, it's better provided for by government. Examples include controlling the airwaves, protecting the nation with the military, protecting the nation's resources like the parks, the environment, and yes, citizens in need. Businesses can do the rest, though there has to be a watchdog (i.e., the government) to prevent abuses. And that suggests the root of the problem -- there is no entity with regulation and enforcement power to be the watchdog over government. Government is supposed to police itself and it's just not working.
And the winner is
We’ll find out what most people think on Tuesday November 6, 2012.