Businessman-in-Chief

One of the things we heard repeatedly over the summer was that it would be great if government was run more like a business and that, as a great businessman, Trump would be the one to make this happen.

First of all,  the question of whether Trump is a good businessman is very much open to debate. Even if your only criterion was how much money someone had, it’s still not settled in Trump’s case.

Second, there is a huge difference between running a publicly held corporation and running a closely held private company.  In a family business like Trump has, you can fire people at will, stiff your contractors and creditors when it suits you, sue or threaten to sue people who challenge you, declare bankruptcy for profit, disregard affirmative action requirements, refuse independent audits, keep financial results secret, refuse outside directors, and so on. Virtually all the profits flow into your own pockets, and the sole purpose of the enterprise is more and more profits. For you.

Trump did try going public at one point about 20 years ago, and it was an unmitigated disaster. Stockholders, or as Trump regarded them, “shmucks”, lost 90% of their investment in the TRMP offering.

But third, and most important, the whole thesis that government should be run like a business is silly. Government isn’t a business and shouldn’t be run like one. It should be run like a government.

Businesses have managers, owners, customers, employees, and creditors. The interest of each differs wildly from the interests of the others. Government doesn’t have owners or customers. It has citizens.

The interest of business management is obscene compensation, particularly in proportion to their employees. They work for short-term gains. For themselves.

The interest of business owners (stockholders) is long-term growth. They are mostly represented by mutual fund companies, which also have a grotesquely overcompensated management class whose interest aligns more with company management than their own customers, the retail stockholders. The stockholder is routinely misled for the short-term advantage of the managers.

The interest of business customers is to get high quality products or services at a reasonable price. But in recent decades, customers have devolved from important clients-to-be-pleased to disposable suckers-to-be-fleeced. Just look at the way the big cable and phone companies treat their customers for ample evidence of this. Better still, look at the “students” at Trump University.

The interest of business employees is long-term stability, including a living wage, and health and retirement benefits. But employees are no longer really valued by most business managers. They are exploited, disposable, and typically don’t share in the success of the enterprise. They are regarded as overhead to be reduced whenever possible by outsourcing, salary cuts, and diminished benefits.

The interest of business creditors is that they want to get paid,  but they can be easily stiffed. The terms of their contracts can be re-negotiated by the business managers who have all the cards in that game. Bankruptcy can be declared to provide management “protection” from having to pay. The business can simply say, “we’re not paying – sue us”. Trump has stiffed his creditors, bondholders, and suppliers over and over again.

Government is not like this at all.  Everyone has the same interest. It’s employees are citizens. Its creditors (bondholders) are often citizens, too.  No one is paid disproportionately, and certainly not obscenely. Creditors can be assured they will be paid – U.S. debt obligations are known to be the safest in the world.

But, most importantly, the government is not a for-profit enterprise. All assets belong to the citizens, and if any manager were to directly benefit from any “deal”, he will have committed a crime.

When a voter says he wants the government to run like a business, he means he wants to eliminate waste and not overpay for what we buy. Fair enough. But it’s also understood that the government is to be run for the benefit of all, not the few at the top.

And here is where the voter will be bitterly disappointed. This is not what they will be getting with Businessman-In-Chief Trump.

 

 

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1 thought on “Businessman-in-Chief”

  1. Good post. The idea that the government should be run like a business has always been a pet peeve of mine. Government may benefit from ideas from business (efficiency and productivity in general, for instance) but profit provides the wrong incentive for good government.

    Like

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