November 23rd, 2010 11:03 EST
Whether You Run a Government Entity Or a Business, What's Important is Improving Productivity
Obviously, politicians are not economists, and economists are not businessmen and women. So, it isn`t surprising that governments at all levels today are facing financial problems and budgets they cannot balance. The success of Capitalism in America is derived from increasing the throughput of economic units: assets, resources, and employees. That in turn is the consequence of having competition. A strong competitor forces a business to provide up-to-date products and reliable services for reasonable prices. Successful businesses depend heavily on having fierce competition that challenges them to improve their productivity, quality, and response time.
A government at any level has no competitor. All governments and their various agencies are what economists would call "monopolies." Any economist worth his tenure in a university will teach students that a monopoly in an industry frequently is inefficient, protects incompetents, lacks sensitivity to customers` needs, caters to its union, and is lax in demanding from its employees year over year increases in their productivity.
There is no "bottom line" or "market share" measurement criteria for a government monopoly. Public dissatisfaction may alter the mix of Republicans and Democrats who hold official positions from time to time in our numerous governments, but rarely is there a report card issued for a failed administration. Taxes are increased to cover up any major fiasco.
The government officials who monopolize the various agencies responsible for inspecting, auditing, verifying, and enforcing the laws and regulations of this country let the following disasters happen on their watch: the Great Recession that is plaguing us now primarily due to lax supervision of mortgage banking and peddlers of derivatives; the oil catastrophe in the Gulf of Mexico; the invasion of illegal immigrants; the never ending "nation building" and "regime changing" wars in Iraq and Afghanistan; and the burgeoning federal deficits that will haunt future generations forever.
The bureaucracies continue to grow, and the attitudes of those who run them are autocratic not democratic. The INS, the IRS, the FBI, and the CIA are untouchable. Supposedly they are protecting someone`s interests when they operate above the law in many instances. The TV CSI shows mock the official organizations. The job of any whistle blower employed by the government is not protected. Those who work for the government have better benefits than a majority of those who work outside the government. Although a citizen is "considered innocent until proven guilty by a jury of his or her peers," the cost of bail and lawyers make an alleged law breaker feel guilty and financially abused by the system.
Why should a government entity try to improve itself? They don`t have to make a positive return on an investment, pay investors a dividend, and fear that they will be audited by some superior agency. There is no suspense dates for improvement, no implementation schedules that can`t be delayed, and no periodic report cards evaluating military maneuvers. Budget due dates are rarely met, performance reviews of personnel at high levels are never published, and unfavorable reports covering government agencies like Fanny Mae and Freddie Mac are classified "for eyes only." Has there been any noticeable productivity improvement? Don`t ask, because no one can or will answer that question!
A few heads may roll is those agencies where gross negligence and "incompetence in depth" can be observed. Proof may be forthcoming but not without a great deal of obfuscation of the facts and figures by those who want to save face and blame someone else of lesser importance. Who was investigating the activities of Bernard Madoff after it was reported that he was running a Ponzi Scheme? Who checks on those businesses suspected of hiring illegal immigrants? Who is allowing banks to pay such low interest rates to savers? Who lets the credit card companies charge outrageous late fees and usurious interest rates? Who assured the residents of New Orleans that the levees were adequate to withstand Hurricane Katrina?
The Federal Reserve Bank sets interest rates. It is a monopoly. Who approves applications for visas? The INS, another monopoly. Who allows businesses to shelter earnings made outside the US? The IRS, and what is that entity but a monopoly. Is there any monopoly that doesn`t have sole power to operate in its "force field?" Perhaps we in America are better served by our monopolies than residents in other countries. But these powerful entities that supposedly work for us have little incentive to improve their productivity.
Our leaders cry over the fact that they can`t manage the business of governing us without running deficits. Yet they act as if everything they do is well managed, their services well planned and executed, and the regulations, apt or not, assiduously enforced.
But we citizens know otherwise. Even the media is forced to admit now and then that they are shocked by some of the malfeasance and ineptitude uncovered by serious journalists who are truly working for the man in the street who buys a periodical for its enlightenment.
Are citizens against business monopolies? Of course. Absolute power in any area of human activity corrupts those in charge. Look at Enron and Microsoft. Their competition was weak, and they got away with business practices considered monopolistic. However, government practices are never treated as abusive, and their shenanigans are financed by us sooner or later.
Good or bad, the law is the law. Scofflaws are indicted when caught, but rarely are those incompetent government workers indicted. Were the bankers who accepted questionable home mortgages indicted? They weren`t even fired. The worst banks were taken over by others at the behest of the government agency who handles insolvent banks (the FDIC).
Now the Socialists in America want more government involvement in everything because they will never admit that government monopolies are dangerously incompetent. Lord Acton`s saying that "power tends to corrupt, and absolute power corrupts absolutely" applies to monopolistic governments. Governments of small underdeveloped countries like the one in Afghanistan tend to be corrupt. The people in larger governments like ours are looking out for themselves primarily and silently covering up their mistakes and misdeeds. Isn`t that some sophisticated form of corruption and spending tax revenue wastefully?
You tell me, because you are the one who is paying for our unproductive bureaucracy and its services! Isn`t it about time citizens of the U.S. establish some criteria for measuring the productivity of our governments and their numerous agencies?
Periodically a knowledgeable gardener must prune a healthy bush, remove any suckers, and cut off the dead branches.
Chic Hollis lived on four continents, speaks seven languages and had five children, all of which helped him gain a unique perspective on life.