Inside the Capitol

Friday, April 20, 2012

4-25 Government can't run like a business

42512 govt business

SANTA FE – Historian Dave Clary emails from Roswell wondering why, now that Wall Street tycoon Mitt Romney appears to be a presidential nominee, the press doesn't seem to realize that running government like a business isn't a good deal for our nation.
Clary says it is worth noting that the last two corporate executives to run our country, George W. Bush and Herbert Hoover, presided over economic meltdowns. He also points to the Italian counterpart Sylvio Berlusconi as another prime example.
The press has covered the subject of business and government being two different animals. Therefore the promise to run government like a business isn't necessarily something voters should embrace.
The subject was discussed at some length when Gary Johnson ran for governor. His claims that he did very well turning a handyman business into a multi-million construction firm sounded good. He should be able to do the same with the New Mexico economy.
But very soon after he took office, Johnson became frustrated with these two co-equal branches of government that were always getting in his way. Every time he made a bold move, the legislature or the courts would block it.
As a businessman, he could make those bold moves without first having to sell his idea and his method of operation. Gov. Johnson, a tenacious man, ended up spending most of his time fighting with the legislature and courts rather than moving New Mexico forward. New Mexico government just wouldn't run like a business.
The appealing part of running government like a business is control of costs. Profits are bigger if a business gets the most out of every dollar. We worry that government doesn't have the same incentive. Government's purpose is to provide services that the private sector can't. Sometimes costs get out of hand.
But it happens in the private sector too, especially as businesses grow. We recently learned that the head of the privatized Los Alamos National Laboratory makes three times what the director did when a governmental body administered it. The total package is over $1 million.
Executive salaries are even more out of line on Wall Street, which got us into this financial mess. They are most of the one percent. That high pay trickles down a little way to Wall Street employees. estimates that Warren Buffett's famous secretary makes between $200,000 and a half-million dollars.
That must be a Wall Street standard but I can't imagine Buffett paying that much. According to Buffett's cousin, former state legislator George Buffett, Warren lives a rather simple life.
So would Mitt Romney run government as he ran his Wall Street investment firm? He promises he will. As governor of Massachusetts he raised taxes and presided over creation of a healthcare system after which Obamacare is fashioned.
Those who believe that government should be run like a business have to make several assumptions. They must believe that running a public institution requires no public-sector experience at all. We've all heard candidates brag that they have never been involved in government before. Where else can one get a job bragging about having no related experience?
Another belief must be that public sector experience is something inherently bad. And finally, they must believe that a public institution will benefit from an infiltration of business executives who will straighten everything out.
Business and government are meant to be different. Government should be doing only what the private sector can't. That means that if the private sector can do something at a profit, it should be doing it. If it can't make a profit, government handles it.
That major difference can be a big shock to those moving into the public sector. You are helping those who can't afford to get services privately. You also are doing those things that no one can do alone like fighting wars, providing public safety, building bridges and dams.
Unbeknownst to some, most public employees and officials do very good jobs.


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