On “running government like a business”
Gov. Nikki Haley frequently says that we need to “run government like a business.”
I’d hoped that cliché had died in the wake of the Enron and AIG scandals, but it’s still alive and well in the governor’s office. Rob Godfrey, Gov. Haley’s spokesman, dropped the little gem in a quote he gave to The State newspaper just last week.
Prudent decision-making, striving for efficiency in systems, improving customer service, okay… fine. We can all agree that these are good and desirable things that ought to translate from running a business to running a government. But beyond that?
I’ve got a few ideas as to how we can go about transforming South Carolina into an operation that’s truly being run like a business. A “businesstate,” if you will! It’ll be a national model once this thing’s up and going.
The sole goal of a business is to maximize shareholder value and profits. (But making money off running a government is illegal. Is this what Haley means?) In order to increase profits, businesses must maximize revenues and minimize costs. Therefore, the leaders of the businesstate of South Carolina should raise taxes as much as possible (because taxes = revenue in government) while cutting costs (services) to the bone. Then pocket the budget surplus (profit).
We’ve also got to root out inefficiencies. You know what’s inefficient? Old people. And we’ve got a slew of them. (Ever been to Hilton Head?)
As Matt Yglesias at Think Progress notes, “Old people, generally speaking, don’t produce anything of economic value. They sit around, retired, consuming goods and services and produce nothing but the occasional turn at babysitting.”
It’s simply not in the best interest of our businesstate to keep old people around. They must be fired. Yglesias suggests that we “euthanize 70 year-olds and harvest their organs for auction.” Great idea!
Next on the chopping block: poor people. After all, they’re a tremendous drain on resources — especially the sick ones. Guess what? We just solved the state’s Medicaid budget crisis!
Now let’s talk compensation. Haley is already paying her staff private sector salaries, so A+ on that one, Guv.
But how about her own salary? As the CEO of a businesstate with roughly $20 billion in annual revenue, she’s going to need a hefty executive compensation package. We’re recruiting the brightest and best to run our businesstate, and folks of this caliber aren’t gonna line up for the job out of the goodness of their hearts or because of some cheesy sense of civic duty. This is the marketplace, people. We’ll set our chief’s salary at $20 million a year for now. We’ll also need to work out a “golden parachute” agreement for incumbents who lose re-election. These arrangements will be kinda like the one Haley’s lawyers squeezed out of Lexington Medical Center for her — but even bigger!
That should get us started in transitioning South Carolina into a businesstate.
I admit that I don’t have it all figured out, though. After all, I graduated from pre-businesstate South Carolina public schools … in the Pee Dee at that. Maybe some of you with higher educational pedigree and business acumen can help me resolve a few questions.
- Don’t most – if not all – well-run businesses seek to grow? Don’t Republicans want to shrink government? Isn’t a business that is shrinking an unprofitable one?
- Are the citizens of the businesstate of South Carolina the customers? Or the shareholders? Or both?
- Do Haley campaign contributions = stock?
- What kind of CEO goes out of her way to anger one of her company’s biggest investors … to the tune of $75 million … and who has the capacity to invest far more?
A business’s success or failure is measured by easily quantifiable metrics such as stock prices and profits. A government’s success or failure is measured in social impact, which is harder to quantify.
Why is it that we assume businesses are paragons of efficiency and prudence anyway?
There’s plenty of mismanagement and dead weight in even the most profitable enterprises. Remember that time when those Wall Street businesses dreamed up magic new assets called “derivatives” and sold a bunch of ‘em and then when everyone realized they were a crock, our whole economy went the way of Humpty Dumpty?
How about the time the federal government bailed out big banks and bank CEOs awarded themselves multimillion-dollar bonuses instead of increasing lending — and then were insulted when members of Congress questioned how the money was spent?
The reason we have such a keen awareness of government inefficiencies is that there are organizations and a whole sector of the media focused on highlighting government waste. (And that’s a good thing.) Private sector companies don’t typically face that kind of scrutiny.
In conclusion, Colorado Political Scientist Seth Masket sums all of this up nicely:
“But to say that governments should be run like businesses is to reveal ignorance about what either governments or businesses — or both — are. Businesses exist to turn a profit. They provide goods and services to others only insofar as it is profitable to do so, and they will set prices in a way that ends up prohibiting a significant sector of the population from obtaining those goods and services. And that, of course, is fine, because they’re businesses. Governments, conversely, provide public goods and services — things that we have determined are people’s right to possess. This is inherently an unprofitable enterprise. Apple would not last long if it had to provide every American with an iPad.”