Thursday, August 27, 2009

Why Government Can't Run a Business

From an article in the WSJ by John Steele Gordon in the May 20, 2009 issue, Opionion Section. Mr. Steele is author of "An Empire of Wealth: The Epic History of American Econmic Power (Harper-Collins 2004.

Mr. Gordon lists five basic reasons:

# 1 - Governemtns are run by politicians, not businessmen (ususally not enough successful businessment to make much of a difference. Politicians can only make political decisions, not economic ones. They are, after all, first and foremost in the re-election business. Because they have a strong desire to be re-elected. What looks good now is more important than long term consequnces even though those consequences are clearly visible. And politicians tend to favor [parochial interests over sound economic sense. Think stimulus money (a border checkpoint between Canada and the U.S. that averages 3 travelors a day received $15 million for repairs couretsy of Montana politicians Max Baucus and Jon Tester, while a checkpoint at Laredo, Tx. that handles 55,000 travelors ad 4500 trucks, and was rated "high priority", got zilch.)

# 2 - Politicians ned favorable headlines meaning a deep seated need to do something even when doing nothing would be the better option. Peorian Transportation Secretary Ray LaHood said today that the "Clunker" program was "wildly successful". We'll see.

# 3 - Governments use other people's money. When a school board sits down to negiotate with a teachers union or decide how many administrators are needed, the goose is the taxpayer. That's why public-service employees often have more genours benefits than thier private-sector counterparts. N.Y City has 10 times as many administrators as the Catholic system until Mayor Bloomberg, a competent businessman took over the public schools system.

# 4 - Government seldom tolerates competetion (think Peoria Public School District #150) Has a government entity ever competed successfully on a level playing field with the private sector? Name one.

#5 - Government enterprises are almost always monopolies and do not face competetion. But competition is what makes capitalism so successful an economic system. The ;lack of it always doomed socialist economies. (we are heading that way faster than many people realize). Cost cutting is alien to the culture of all bureacracies. See my upcoming blog.

Too many have forgotten what it is govenments job to do. It is to make and enforce the rules that allow a civilized society to flourish. But it has a dismal record of regulating. The JS and the WSJ report that "Federal Government Number Have Gone Stratospheric", with projedctions from Obam's White House a 10-year federal government deficit of $9 trilolion dollars that will equal 3/4 of the entire U.S. economy.

Will governemnbt never stop growing? No, it's too late. We are on the "night train to socialist city". See my upcoming blog.

I recived this email from Robert Huschen and feel it is appropriate for the above blog, Thanks, Bob.

>>> The U.S. Post Service
>>> was established in 1775 - they've had 234 years
>>> to get it right; it is
>>> broke, and even though heavily subsidized, it
>>> can't compete with
>>> private sector FedEx and UPS services.
>>> Social Security was
>>> established in 1935 - they've had 74 years to get
>>> it right; it is
>>> broke.
>>> Fannie Mae was
>>> established in 1938 - they've had 71 years to get it
>>> right; it is broke.
>>> Freddie Mac was established in 1970 - they've had
>>> 39 years to get it
>>> right; it is broke. Together Fannie and Freddie
>>> have now led the
>>> entire world into the worst economic collapse in 80
>>> years.
>>> The War on Poverty was
>>> started in 1964 - they've had 45 years to get
>>> it right; $1 trillion
>>> of our hard earned money is confiscated each
>>> year and transferred
>>> to "the poor"; it hasn't worked.
>>> Medicare and Medicaid
>>> were established in 1965 - they've had 44 years
>>> to get it right; they
>>> are both broke; and now our government dares to
>>> mention them as models
>>> for all US health care.
>>> AMTRAK was established
>>> in 1970 - they've had 39 years to get it right;
>>> last year they bailed
>>> it out as it continues to run at a loss!
>>> This year, a trillion
>>> dollars was committed in the massive political
>>> payoff called the
>>> Stimulus Bill of 2009; it shows NO sign of working;
>>> it's been used to
>>> increase the size of governments across America, and
>>> raise government
>>> salaries while the rest of us suffer from economic
>>> hardships. It has yet
>>> to create a single new private sector job. Our
>>> national debt
>>> projections (approaching $10 trillion) have increased
>>> 400% in the last six
>>> months.
>>> "Cash for
>>> Clunkers" was established in 2009 and went broke in
>>> 2009 - -
>>> after 80% of the cars
>>> purchased turned out to be produced by foreign
>>> companies, and dealers
>>> nationwide are buried under bureaucratic
>>> paperwork demanded by
>>> a government that is not yet paying them what
>>> was promised.
>>> So with a perfect 100%
>>> failure rate and a record that proves that each
>>> and every
>>> "service" shoved down our throats by an
>>> over-reaching
>>> government turns into
>>> disaster, how could any informed American trust
>>> our government to run
>>> or even set policies for America's health care
>>> system - - 17%
>>> of our economy?
>>> Maybe each of us has a
>>> personal responsibility to let others in on
>>> this brilliant record
>>> before 2010, and then help remove from office
>>> those who are voting
>>> to destroy capitalism and destroy our
>>> grandchildren's
>>> future.

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