Bad Government

November 19, 2016

Donald Trump wants to run the government like a business. There are a lot of conservatives who think this would solve many problems. This is an inherently terrible idea and I’ll explain why in two ways.

The first is on a strictly theoretical level. Government is created in order to serve and protect its people. That is the only reason for its existence. Any money necessary for that enterprise must come from its people and be expressed how the majority wish it. That equation doesn’t work out perfectly (obviously) but for the most part it holds true. Most government spending is spent the way the majority of the people want it to be, and that is to serve and protect them from foreign enemies, from crime, from isolation, from starvation, from poverty and from many of the ravages of old age, just to name a few. And these are expensive enterprises which is why taxes are so important but also “high”. Trust me, almost every person in the history of Earth who ever paid taxes felt they paid too much in taxes. That’s because in the vast majority of cases they didn’t recognize how much of it goes to their own benefit. But that’s kind of the point: if they see something that isn’t being done that should be, then the government is not doing its job. The people are the end. Their happiness and safety are the only results that satisfy the conditions of what qualifies as a successful government.

A business, on the other hand, is created to make its owner and/or shareholders money. That’s it. When push comes to shove, the money takes priority. The people are merely the means by which to achieve that end. They give the money for the product, but the people who run the business could care less about the safety or happiness of the people as long as they are getting their money. Safety and happiness in the customer base certainly develops more loyal customers, but in most cases the business sets only a minimum standard for that in order to maximize profitability.

So a government is created to serve the people. They are its end. A business is created to exploit the people. They are the means. So there are clearly some things that the government should be responsible for and some things that can be done successfully by private enterprise. Assuming one can be done more successfully by the other is a recipe for disaster. The dilemma is determining which is which. And the fallacy that Trump is playing into is that someone who is successful as a businessman should be successful as a government administrator. It’s not like we don’t already have 35 years of evidence to the contrary, given many of the agency appointments over that period.

Which brings me to the second way: citing real life examples. BP’s Deepwater Horizon is one of history’s largest oil spills, an environmental catastrophe that will adversely affect the Gulf Coast fishing industry and the health of the people who live there for decades. The well itself went into deeper water than is generally allowed for “safe” drilling – although there really is no such thing as “safe” drilling since every well leaks hundreds if not thousands of gallons of oil into the sea – so fail safes are necessary in case some link in the drilling chain breaks down. One of those fail safes was a blowout preventer that costs $500,000. But BP didn’t have a working one in place. That sounds like a lot of money but when you consider that big oil companies generate billions in income each quarter, it’s not really that big of a deal financially. Still, BP opted not to implement a working preventer, even though it was required by law. The resulting explosion cost 11 men their lives and the oil spill it caused cost the company $4.5 billion in fines to the Department of Justice, $3.5 billion in civil penalties, $9.2 billion in settlements to local businesses, and another $20 billion to be put into a trust for the benefit of anyone else who was harmed. In total, BP set aside $42.5 billion to repay the damage they caused and they likely lost the patronage of tens of thousands of formerly loyal BP customers for their negligence. And all because they didn’t want to pay for even one half million dollar fail safe. But that is how business works; they get by on as few redundancies and fail safes as possible in order to maximize revenue. Safety is almost always a secondary concern.

Conversely, perhaps the most important aspect of the government’s work is safety. One example of how government safety works is NASA’s Apollo program, which built in hundreds of redundancies and fail safes into their launch and exploration vehicles in order to assure the safe conduct of their astronauts. It’s more expensive to do it that way that but a mission is only a success when the astronauts safely return, so they were necessary. This became abundantly clear during the Apollo 13 mission. Those redundancies gave the astronauts enough of an opportunity to improvise what they needed in order to come home. Without them, they would have been casualties of space travel when the oxygen tanks were first stirred. But as it was, it became an inspiring story of how human ingenuity and government safeguards worked together. When profitability/funding begins to gain priority, as it did with the Space Shuttle Challenger, disaster is the result.

Our nuclear deterrence system incorporates a fleet of long range bombers equipped with nuclear bombs. Often times the crews on these planes are asked to complete training missions with live weapons. They do this because an actual nuclear strike will cost millions of lives and the crews need to be mentally and emotionally prepared for that moment of truth so they can act without the delay that might arise from a last second bout of moral ambivalence. One of the things that not a lot of people are aware of is how often mistakes happen on these missions and how often we have come close to nuclear war and/or catastrophe. On one such a mission in 1961 a bomber broke up in mid-air and dropped its payload on North Carolina. Fortunately one of the bombs fell into a swampy field and disintegrated without detonating its conventional explosives. The other, however, fell on a piece of land near Goldsboro and was found by military authorities. When they arrived, they discovered that three of the four arming mechanisms had armed, leaving only one fail safe enabled. The people of North Carolina can thank their existence to the fact that the government insisted that there was more than one fail safe on that weapon.

The whole notion of running the government as a business is that it would trim some of the waste that occurs in government. Much of that “waste” comes from redundancies, which can be wasteful but as we’ve seen sometimes are necessary. A lot of Trump supporters and tea partiers are calling for the end of the Department of Energy as a means to trim government spending. Apparently many of them are unaware that the DoE controls our nuclear arsenal as well as the safe management of our nuclear power plants. They want to transfer those responsibilities into private hands. Perhaps they forgot about the lessons learned from Blackwater, the private mercenary firm that was contracted for security in Iraq. Despite the fact that they saw no front line action and were basically security for motorcades, they were involved in at least a dozen incidents in which Iraqi non-military citizens were killed including one infamous incident in which 17 innocent Iraqi citizens were shot to death. This was only in the span of four years. Imagine how well that would go if you put those same people in charge of nuclear weapons.

So rather than put everyone at risk with frivolous, utterly foolish cuts, I have a few suggestions that might be a suitable compromise that both eliminates a significant amount of government waste but don’t risk our safety.

1) The US Government spends $25 billion per year maintaining unused or vacant properties. There is no doubt some reason for this but it is a luxury at this point. There are plenty of realtors who could use the extra work. In that respect, this could be one of the most efficient jobs programs the government ever enacted.

2) Over half of all farm subsidies go to corporate farms which report annual household incomes of more than $200,000. Farm subsidies and farm insurance total more than 20 billion per year, of which corn subsidy gets the lion’s share. Of that corn subsidy, 90% of all corn grown is inedible; used for ethanol, animal feed and products like sweeteners. This is wasted money. End farm subsidies for any farm that generates more than $200,000 and scale it back as they approach that number (inflation adjusted, of course).

3) Boeing, Alcoa, Intel, GM and Ford are among the top beneficiaries of government corporate handouts, receiving more than $25 billion annually in federal subsidy in the form of tax breaks, reduced land values, etc. Corporate welfare of that ilk as a whole runs roughly $100 billion annually. Of that, more than $7 billion takes the form of tax write-offs for CEO compensation. Trim the tax code to eliminate these subsidies. Instead, re-write the tax code to benefit start-up businesses (i.e., businesses with no franchise, subsidiary or similar connection to a larger company that are less than three years old, or something along those lines).

4) Fossil fuel companies get roughly $40 billion a year in government subsidy. Really? The most lucrative industry on Earth needs government handouts?

5) Pharmaceutical companies get more than $200 billion a year in government breaks and handouts. Roughly one third of all drug research is conducted through government agencies and funding. Pharmaceutical companies reap a huge benefit by buying patents that result from this research for pennies on the dollar, then jacking up the prices of those drugs. Medicare Part D needs to be rewritten so that the government can negotiate drug prices. Currently they must accept whatever price the pharmaceutical company lists and cover the cost under the program. That’s the primary reason why Medicare expenses have increased over the last 10 years. Make a law that limits how much a drug price can be raised based on the cost of the research and production the company that’s selling it invested.

6) The Department of Homeland Security wastes more than $30 billion annually according to a GAO audit. Clearly, the GAO has a better idea of how to trim that than I, so I will accede to their recommendations.

7) The F-35 fighter jet will cost more than $1.5 trillion over the next 50 years. It has many problems, including but not limited to an inability to use all of its systems or fly safely or shoot its guns. We’ve ordered nearly 1500 of them to combat a total of 200 similar fighters from Russia and 100 from China, and both country’s programs are only in the early development stage. No other country possesses a fighter within a generation of complexity. The government is currently spending $400 billion a year to get it ready for testing and production and it is already eight years behind the projected ready date. Perhaps it’s time to look for an alternative solution.

8) The government made roughly $137 billion in improper payments in 2015. That number varies quite a bit from year to year but runs roughly between 90-150 billion. However that total is not strictly overpayments. It includes the total amount of underpayments, as well as insufficiently documented payments. So the actual amount of government overpayment is significantly less. Also a good portion of that is due to state-level errors administering federal programs. Refine the efficiency of these payouts.

9) State and local governments grant another $80 billion in corporate subsidy per year. As above, many of these are superfluous to companies that have no such need.

I do not imagine it would be difficult from a math standpoint to trim $300 billion in annual spending from this small list, maybe even as much as a half trillion. The problem is convincing the people who have a vested interest in continuing these programs – the Congressmen who represent the districts that get this wasted money – that cutting this waste would be both in their self-interest, the interest of their constituents, and most importantly, in the interest of the country as a whole. But I am sure they can be convinced by persistent engagement by voters and concerned citizens who contact them directly.

Honestly, wasn’t that a lot easier than privatizing Social Security and Medicare, which would be tantamount to stealing money already paid to the government and giving it to the same private investors who crashed the economy in 2007-2008? Imagine the mayhem that will ensue when guys like Paul Ryan turn to the largest population of senior citizens in our nation’s history, hand them a coupon and tell them “remember all that money you paid the government over the last 50 years? Well, this coupon is now your retirement safety net. I hope it covers your needs”. You might think they are old and feeble but remember that Chuck Norris falls into that age group. I expect that we can all come together in agreement that we don’t want to get on his bad side.