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No Business Like Government Business

Once upon a time, Americans were shareholders of government. Today Americans are consumers of government.
IRS headquarters in Washington, D.C.

IRS headquarters in Washington, D.C.
Photo Credit: U.S.Department of Treasury

As the great anchor of the election hits bottom, plummeting past feeder fish, political plankton and eyeless creatures that lurk in the depths of MSNBC and Current TV to rise during election season to lecture us on how angry we should be, the theme of the season is that the choice between Romney and Obama is the choice between big corporations and big government.

Most people have already been primed by decades of songs and shows to pick the right answer to this one. We know that corporate boardrooms are full of menacing characters who are always laundering money, dumping toxic waste on children’s playgrounds and plotting to blot out the sun. And then they temporarily step out to work in government for a few years before returning to do their sun-blotting duties.

A choice between big corporations and big government is a choice of choices and no choice at all. There isn’t much good that can be said about corporations, just as there isn’t much good that can be said about any branch of the government. The difference is that you have a choice whether to deal with a corporation or not. Unless the government mandates that you buy health insurance from one of them; because most cases where people are forced to do business with a corporation is due to government regulations.

Imagine a big corporation. A really big corporation that monopolizes as much as it can and compels you to buy its low quality overpriced services and imprisons you if you refuse to pay for them whether you use them or not.

Now imagine a CEO who has no accountability, who cannot be put on trial for his actions while serving in that position, who picks and chooses which laws to follow, who breaks the law, causes thousands of deaths, lies repeatedly and wants to spend another four years doing it all over again.

We are all shareholders of the corporation of government. A corporation whose board and CEO we can vote for, but the corporation also has a variety of undemocratic governing mechanisms that make those votes much less meaningful. And the biggest problem is that many of the shareholders are part of blocs that make money from the current unsustainable practices of the corporation and vote in bad boards that rob us blind so they can make more money.

Once upon a time, Americans were shareholders of government. Today Americans are consumers of government.

The current incarnation of the American Republic (is it the Fourth or the Fifth incarnation? At least the Europeans have the good grace to tack on those numbers) is primarily a provider of domestic services and international defense. This is a striking contrast from the older American Republic where the government provided domestic defense and not much else.

It’s simplest to think of a thing in terms of its function. With the majority of Federal spending going to Social Security and Medicare, our government is essentially an insurance company, taking a percentage of salaries and “investing” that money to provide a social safety net. Except the money isn’t invested, it’s squandered, and much of it goes to people who are not paying into the system.

As insurance companies go, our government is completely financially unreliable and untrustworthy, its payouts are poor, its customer service is terrible and the people running it would be in a jail cell if they were serving on corporate boards.

To understand what our government is, imagine a wasteful non-profit obsessed with Third World children, merged with some kind of domestic poverty charity, merged with an insurance company, attached to a bunch of umbrella trade and regulatory groups for entire industry with a huge military arm that exists to stabilize troubled regions for the business community and occasionally does pro bono genocide interventions.

This Frankenstein America monster is what the current Republic looks like and the people running it insist that this unwieldy beast, its bulky body that can hardly walk in a straight line and its deviant brain, are a massive step forward into the future. Well Dr. Frankenstein thought the same thing and whether it’s the Tea Party or OWS, there are no shortage of peasants with pitchforks out there.

Our national government is essentially an insurance company attached to a bunch of national and international trade and regulatory groups. And that might be fine enough, if it actually worked. If it did work then senior citizens would never have to worry about their Social Security and local jobs would be protected against foreign competition. And when Islamists began destabilizing a country that we do business with, our Dutch East India Company with nukes would bomb them and their villages to oblivion, on a budget, before flying home for a celebratory dinner.

Beyond all the moral and political problems, there is the practical problem that the monster can’t do any of these things. It performs its functions like Frankenstein trying to take a flower from a girl’s hand. The flower gets crumpled and Frankenstein stomps off to smash things.

It can’t handle the insurance business, because it can’t control the temptation to spend all those piles of cash coming in. It can’t pay out the money again, because it is determined to spend giant chunks of it on social services to people who did not pay into it. And it can’t deliver any services in an efficient manner because its departments exist to employ incompetents who are bound by the rules to be even more incompetent than their actual inclinations, so that the system will be forced to hire even more incompetents on an annual basis.

As for national defense, forget about it. Frankenstein can react to threats after they happen. Mostly the military is lent out on a pro bono basis to humanitarian projects maintained by NATO, which like an international buggy whip manufacturer, exists with no purpose, and has instead decided to go into the business of preventing trendy genocides and is absolutely terrible at that as well. The whole thing is rolled into the United Nations, which is like one of those dot com companies that are supposed to be the next big thing, but never becomes the next big thing, but keeps raking in piles of money from investors while promising to one day revolutionize absolutely everything.

The big conflict with our grand corporation is conflict of interest.

First, the corporation is far more beholden to its suppliers of services than its consumers of services. This is a significant problem because it means that the cost of providing those services is constantly becoming more expensive and the corporation keeps nodding its head at the inflated product and labor figures presented by its suppliers.

Between the internal inefficiency and the unwillingness of the corporation to hold the line with its suppliers, the financials are impossible, and the corporation is currently running an annual trillion dollar deficit. It keeps raising its compulsory prices, but there is no reason to think that it can function within any conceivable budget because its boards, its executives and its suppliers simply adjusting their spending to match the available funds and then go twenty or thirty percent higher.

More money doesn’t mean better or even workable government. It means the corporations and unions who are on the inside will take more money home and next year there will be an bigger deficit, because like a dumb beast, the system will eat as much as you give it. It will not stop, because there is no profit motive for the individuals running things to stop. They can only make money by spending money and they don’t have to make money to spend money because they control the cash flow..

On paper, the corporation exists to provide services to customers. In practice it exists to provide wealth to its boards, its suppliers and its employees. It is a non-profit, in the worst sense of the word, because its finances are unsustainable, it keeps going only by compulsively lying to everyone it owes money to, promising debtors that they will be repaid and customers that they will be served, while its insiders stuff their pockets full of stolen money.

This state of affairs is not unprecedented among corporations. It’s a familiar form of corruption being practiced on a truly epic scale.

Conflict of interest is completely natural. It is human nature for people to look after themselves and their friends first. It is also completely natural for a system to serve itself and to build its governance mechanisms in such a way that everyone on the inside gets paid and almost everyone on the outside gets screwed. It’s all natural, but so is murdering your neighbor for his camels and his wife.

Governments are set up to restrain the sort of natural abuses that flow out of human nature. The American variety of it was an experiment that tossed out a ridiculously corrupt system dependent on access and birth, and replaced it with one that depended as little on government as possible. It was still corrupt from the first, because it was still human, but it was much less corrupt than all the other alternative systems to it because everyone had limited veto power over it and unlimited immunity from it in many areas.

Since then we have gone from a system that limited its own power to a system whose ideologues cry for unlimited power and spin us the wonders of universal college education and green energy that they will produce for us if only we let them do whatever the hell they want. But at least it’s not one of those horrible big corporations. Then we might actually have a choice whether to do business with it or not.

Originally published at the Sultan Knish blog.

About the Author: Daniel Greenfield is an Israeli born blogger and columnist, and a Shillman Fellow at the David Horowitz Freedom Center. His work covers American, European and Israeli politics as well as the War on Terror. His writing can be found at http://sultanknish.blogspot.com/. The views expressed in this blog are solely those of the author and do not represent the views of The Jewish Press.


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