Tag Archives: government

The Business of Government

Americans like to believe that government should be run like a business. That belief–pernicious and naive– helped elect Donald Trump, and its persistence is evidence (as if any additional evidence is needed) of the public’s profound lack of civic literacy.

Should government be run in a businesslike fashion? Of course. Is managing a government agency “just like” managing a business? Not at all.

A former colleague recently shared an article addressing the differences between business and government. Addressing the “myth” that anyone who can run a successful business can manage government, the author noted

This is not a 21st-century — or even a 20th-century — phenomenon. In a classic 1887 article, Woodrow Wilson, then a professor at Princeton University, maintained that there was a “science of administration” — arguing, in effect, that there were principles of management that transcended the context in which they were applied. “The field of administration is a field of business,” wrote Wilson. “It is removed from the hurry and strife of politics.”

Later observers and scholars of public administration thoroughly discredited this notion. The pithiest statement on the topic came from Wallace Sayre of Columbia University, who argued in 1958 that “public and private management [were] fundamentally alike in all unimportant respects.” In 1979, Graham Allison, then dean of the Kennedy School of Government at Harvard, used Sayre’s comment as a launching point from which to examine similarities and differences. He noted that both private firms and governments must set objectives, develop plans to achieve those objectives, hire people and direct them toward the achievement of objectives, and manage external environments. But he observed that the way in which these things occur is often fundamentally different from one sector to another.

The article lists some of the important ways in which private enterprises differ from public ones.

Government is about this thing called the “public interest.” There is no such animal in the private sector. Private firms care about their stakeholders and customers; they do not generally care about people who do not invest in their businesses or buy things from them. Thus, accountability is by necessity much broader in government; it is much more difficult to ignore particular groups or people.

Private-sector performance is measured by profitability, while performance measurement in government needs to focus on the achievement of outcomes.

Compromise is fundamental to success in the public sector. No one owns a controlling share of the government…. The notion of a separation of powers can be anathema to effective private management. It is central to the design of government, at least in the United States.

Government must constantly confront competing values. The most efficient solution may disadvantage certain groups or trample on individual or constitutional rights. In the private sector, efficiency is value number one; in government, it is just one of many values.

Government has a shorter time horizon. In government, the long term may describe the period between now and the next election. Thus there is a strong incentive to show relatively immediate impact.

Government actions take place in public, with much scrutiny from the press and the public. There is no equivalent of C-SPAN showing how decisions are made in the corporate boardroom. Corporate leaders do not find it necessary to explain their every decision to reporters.

When corporate executives are elected to run cities or states, they often expect to operate as they did in their companies, where they made the decisions and others obediently carried them out. But legislative bodies–even those dominated by the political party of the chief executive–are not “minions.” They too are elected officials, and they bristle (rightly) when a mayor or governor or president presumes to issue orders. Successful relations between the legislative and executive branch require negotiation, diplomacy and compromise–and those aren’t management skills generally found among corporate CEOs.

Trump and most of his cabinet nominees lack any government experience. Most also lack any education relevant to the missions or operations of the agencies they have been tapped to lead. They don’t know what they don’t know.

And it has become quite obvious that the concept of “the public interest” will be new to all of them….

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Flavors of Freedom

There is a book review in the latest issue of the Washington Monthly of “No Freedom Without Regulation: The Hidden Lesson of the Subprime Crisis.”  It was written by a Professor Singer of Harvard Law School, and in it, he considers a type of freedom that gets short shrift from the various special interests who are constantly insisting that any and all government regulation constrains our liberties.

I found this passage illuminating:

When the state sets minimum standards of safety and transparency for the manufacture and sale of consumer products, it affords me the freedom to buy a toaster oven without first hiring a lawyer to read the fine print and an electrician to look over the specs to make sure it won’t catch on fire. Other restrictions protect us from negative externalities. Building codes may limit my neighbor’s ability to contract for the construction of a house with cheap material and bad wiring, but it protects my house from the fire likely to erupt in his.

As I have noted in previous posts, I’m grateful for the Food and Drug Administration that relieves me of the need to test that chicken I bought at Kroger for e coli. (Before the recent news from Flint, Michigan, I used to be more grateful for the EPA’s monitoring of water quality–now, I’d like to see those regulations stiffened up a bit…)

The ongoing debate about government regulatory activity displays all the deficiencies of American policy arguments generally: it oversimplifies, assumes an “either/or” answer, and focuses on the wrong questions.

Can regulation be too stifling? Can a “nanny-state” approach impose unnecessary costs on businesses and consumers? Sure.

Can the lack of appropriate regulation endanger innocent people, and impose additional costs on those same businesses and consumers? You betcha!

The questions we should be addressing are the “how” questions: is this particular regulation necessary? Is it “narrowly tailored” to accomplish its goal? Does it make sense from a cost-benefit standpoint?

We’ll still disagree, still argue about the extent and substance of regulatory activity. But at least we’d be arguing about the right things.

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Food, Water, Air and Government

Okay. Sunday sermon time.

For the past 30+ years, self-described “small government” conservatives have waged a propaganda war on the legitimacy of the state. While that war has rarely been as explicit as Grover Norquist’s famous threat to make government “small enough to drown in a bathtub,” or as intentional as the campaign I blogged about yesterday, the constant focus has been on what government does badly and the constant refrain has been that “we don’t need no stinkin’ government telling us to [fill in the blank].

Let’s stipulate that, yes, there are many things government at all levels does badly, and yes, we need to monitor its operations and correct its mistakes. Yes, there are good forms of government and oppressive forms, and thoughtful citizens should opt for—and attempt to institute— the former. But that is very different from the irresponsible attacks on the very existence of established political authority.

The shock that has accompanied the water crisis in Flint, Michigan demonstrates the extent to which even the most anti-government among us depend upon a well-functioning bureaucracy—not to mention the extent to which ill-considered ideological decision-making poses a very real threat to the well-being of citizens. (Especially citizens who lack the means to remove themselves from the polity and retreat into privileged enclaves where they can pay for clean water and other “amenities.”)

There’s a lot that might be said about Flint’s situation, and a lot of blame to go around, but  the lesson to be learned goes well beyond the idiocy of “penny wise, pound foolish,” stubbornly ideological policies, or even official misconduct.

America is no longer a country of family farmers and small merchants scattered along the eastern seacoast. The overwhelming majority of Americans no longer grow and preserve our own food or draw our water from a pristine nearby creek. Cars and factories discharge pollutants into our air, airplanes criss-cross the skies, and we live in densely populated cities where—among other things— we can’t just toss our garbage out the back door. The list is endless.

American citizens are utterly dependent on the institutions of government to provide services we cannot effectively or efficiently provide for ourselves. We expect government to assign air lanes so our planes don’t crash into each other, to inspect the foods we buy at the local grocery so we don’t get ill, to prevent the local factory from discharging its toxic waste into our waterways so we don’t drink contaminants, and much more.

The private sector cannot protect even the richest gated communities from polluted air.

There are certainly areas of our communal life where government need not and should not intervene. Debates about the necessity and/or propriety of programs and initiatives is entirely appropriate, as is criticism of poor performance of government agencies or officials.

But.

When self-serving political rhetoric encourages our dimmer citizens to fear a “government invasion” of Texas, when the slightest effort to curtail gun violence sets off hysterical accusations of “confiscation,” when loony-tunes cowboys try to “take back” land held in trust for the benefit of all citizens, when efforts to ensure equal treatment of the nation’s more marginalized groups is rejected by zealots who claim exemption from the laws of the land “because God,” we have not only weakened the bonds of citizenship, we have endangered our own safety and well-being.

If we don’t retreat from our bipolar “government bad/private good” approach to complicated issues, there will be a lot more people drinking brown, lead-filled water and breathing toxic air.

Among other things.

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A Wake-Up Call Too Late?

Finally, the alarms are going off in what is left of the rational GOP. The question is: is it too late? Has the party slept through earlier signals and bells, hitting the “snooze” button too often?

Okay, enough with the strained analogy.

Bill Brock recently wrote a “must read” column for the Washington Post. For young people and those with bad memories, Brock, from Tennessee, served as both a Representative and a Senator from that state, and for four years, was Chair of the Republican National Committee.

I am just as concerned about the destructive tone of the Trump campaign as I am about its demagogic content. How can you hear what someone else is saying, no matter how important, when you’re shouting? How can you bring people into a constructive search for solutions to our national problems when you do nothing but belittle them, and even suggest they are stupid, weak or corrupt?

A truly free society, one that gives its citizens the responsibility of participation, can function only to the extent there is civil discourse. We can engage in a mutual search for solutions only to the extent that we agree a problem exists. That can never happen unless we talk to each other, listen to each other and respect the fact that honorable people can reach different conclusions. When that sense of comity is missing, we are at risk.

Before readers dismiss Brock’s column as just one more heart-felt but ultimately feckless appeal for civility, I would call attention to an important paragraph in which he identifies the structural elements—what he calls “root causes”— that have brought us to this (very unpleasant) place in our national life:

Shouting is only part of it. There are also root causes. They include, but are not limited to, the ever-widening gap between our two parties caused by redistricting abuses and the undeniable sense that the election process itself is being swamped by unlimited and too often undisclosed funds from a select few. There is one more I fear — the too-often cable-TV-driven sense that only the dramatic, only the negative, only the ad hominem attack can garner sufficient attention to assure electoral success. The public disgust is palpable, and rightly so, but in a more fundamental sense, the results are disastrous.

Redistricting. Unlimited and unreported money. The rise of sensationalist, propaganda radio and TV.

We can and should do something about these causes of our political pain. It won’t be easy, but we need to move from today’s pervasive gerrymandering to nonpartisan redistricting. We need a Constitutional Amendment to overturn Citizens United, and far more transparency about political funding.

And–most difficult of all, but also perhaps most important–we need to reclaim what has been called the journalism of verification. We need a journalism that fulfills its constitutionally-protected function of acting as government’s watchdog, a journalism that is trusted because it has demonstrated that it is trustworthy.

Let’s take Brock’s wake-up call seriously—and hope that it isn’t too late to restore both civility and a government that functions.

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What If We Tried Running Government Like a Government?

We’ve all heard it a million times: “why can’t government be run like a business”? I generally want to scream “because government isn’t a business….” but I generally settle for “Don’t you mean we need to run government in a businesslike fashion? You really don’t mean we should run government like a business…”

This notion that government is just like business, only less efficient, is often cited by people as the reason they support candidates for public office who, like Donald Trump or Carly Fiorina, have no government experience (and frequently, only the dimmest idea of what government is and does).

In a recent post–rant, really–Mark Sumner insisted that the recurrent theme that “government should be run more like a business,” is both dangerous and completely counter to the whole idea of democracy.

Government and business are not the same thing. In fact, there are good reasons why, in a democracy at least, any effort to run the government like a business should be seen as a hostile act.

After making the (obvious) point that the business of business is profit,  and the business of government is the common good, he goes on:

Well, those who still want to run government like a business would surely be thrilled at the idea of giving the president a pay raise of 16 percent a year—the average increase for Fortune 500 CEOs last year. In fact, CEO pay has risen 937 percent since the business-friendly 1980s, while presidential pay hasn’t even kept up with inflation. Come to think of it, when you compare average CEO pay to company revenues, it looks like President Obama should have pocketed about $124 billion last year. I think everyone can get behind that aspect of “running it like a business.” Right?

But then, the president would deserve that money, because unlike an actual president, as government CEO he’d have enormous freedom to ignore what anyone else said and run the nation as he wanted. Sell the Grand Canyon! Swap North Dakota for North Sudan! Fire the Congress! Yes, Mr. President.

I suppose that people could mean “run the government like a business” in terms of keeping the books tidily balanced. Only, of course, they don’t. Check out Amazon. Or Twitter. Or… well, just about any of them. Check out all those investment banks that invented more theoretical money than the GDP of the entire world, and then lost it.

I particularly liked his conclusion:

If you want a government that takes as much of your money as it can, delivers as little as possible, gives what it takes to a handful of the powerful, and is intrinsically unstable … Sure. Run it like a business.

And actually, there have been governments run this way. Plenty of them. There’s even a word for it. Starts with an ‘F.’ Just Google Mussolini, Benito. You can take it from there. Though, speaking of Mr. M, a lot of this “run it like a business” stuff seems to grow out of a longing for having one tough-talking leader at the helm. Maybe you should add Mugabe, Robert and Franco, Francisco and Dada, Idi Amin to that search. Like I say, this kind of government isn’t exactly a new idea.

On the other hand, if you’d rather have a government that’s interested in providing the best service to the greatest number of people, in rewarding everyone fairly, in protecting the weak from the powerful, then you have another choice. You need to run it like a government. That’s the only way you can, hmmm, what’s that phrase?

“Establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our posterity.”

That stuff. There’s no profit in that stuff. That’s why it’s nobody’s business … but should be everybody’s government.

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