Much is being written about Jared Kushner leading another task force to make government run like a business, with the usual caveats about how it's likely to fail. Included are all the usual right and wrong reasons about government not being a business. But the lack of failure is the biggest point.
American business is successful precisely because so many businesses fail, and are replaced by new trendy companies with just as much chance of failing. Amazon, one of our great recent "success" stories, didn't make a profit for years, and now 20 years later only pulls in profits of maybe 1% of revenues. Uber's much worse, with a 2016 loss of perhaps $3 billion. It's hard to imagine US voters putting up with such poor results. And those are the *good* examples.
Though many businessfolk will tell you that a failed business was not necessarily a bad business. Misplanning cash flow despite strong sales can be disastrous. Changing trends and market acceptance can catch good products by surprise. Sudden crises can take related and unrelated businesses down.
Nokia was flying high in the early 2000's, with more than 50% of the world's cell phone market, while the phone industry had invested heavily in the next generation of phone network called IMS. But Steve Jobs came along and made his money less on phones and more on content sales, while avoiding the expensive network improvements completely. (even security was largely an afterthought a few years later). Short story, Nokia was soon acquired by Microsoft (who failed miserably in the phone market despite some good models, even as it succeeded in enterprise software and gaming), and in a couple years Nokia vanished completely.
PIcture this graph of employment in the
Yes, that's a death plunge you're looking at, and it occurs in industry after industry. In a process called "creative destruction" we once averaged 400-500,000 new businesses a year with a typical 50,000 bankruptcies a quarter to leech the less survivable out of the system.
Every decade or so we have a new foreign competitor that's praised as eating our lunch, buying up all our assets, killing the American Dream. It's been Japan, Saudi Arabia, China, sometime Russia, and those less visible German, French and British investors. And then our typical death spirals send the foreigners ducking for cover and we have a new round of rebuilding and attracting someone else to our shores.
But imagine if that curve meant not just the next recession but the government itself - that it meant a China or Saudi Arabia would take ownership of America Inc to run it like *their* business. Yes, that would change our whole dynamic, especially our approach to risk, expenditures, cash flow, assets...
But that won't happen. The US government goes into a spending freeze every September as the fiscal year approaches, and comes out of it in January or February. No competing company could function with this kind of restriction. While we talk about downsizing companies, government hiring is usually running counter-cyclical to take up the slack, lowering unwanted unemployment.
If we think of what government invests in, it's actually failure itself. There is no profit margin in managing public lands; there's nothing to be made from handing out Medicare services; 2 year presidential campaigns are one of the least efficient ways to choose an executive board; and on and on. When government saves money, it's often cutting off its nose, such as those closed government offices Republicans are so proud of.
Yes, we've tried some business-like efficiencies such as digitial medical records - a technical issue mixed with privacy nightmares that's made it a stock promise for every new administration for decades. If government made a profit, we might tie salaries and hiring to sales and delivery, but government services are mostly constraint driven, not goal oriented. If we could actually implement Death Panels, the GOP would cheer, but we only have mostly toothless advisory panels to try to tame a runaway tiger.
But it won't get better even with more intent to business-ize government. First, businesspeople succeed at what they know, via specialization and lessons-learned, and the portfolio theory of corporate acquisitions failed miserably in the 70's-90's - just like trying to run diverse bureaus in the same way will disperse focus and resources and abilities. Second, business frequently runs on seeking advantage, not in resource efficiency but in control of your customers and larger exploitation & overworking of your workflorce - these are the secrets to corporate success much more than any marginal innovation over the competition. Since government jobs in general pay *less* than private sector, the tendency is to leverage longevity as a benefit, rather than squeezing more output from the turnip. Third, private sector efficiencies often don't translate to public sector services - from procurement to marketing to project management to sales force, on and on. Conflicts of interest, government competition with private sector and other factors combine to limit adoption.
It's amazing that 40 years after the Chrysler bailout and less than 10 years after the 2008 crash with 2009 bailout, that we're praising the performance model of our corporate sector. And we can find good examples where short-term profiteering rather than long-term viability specifically led to vain and shortsighted decisions that sunk a large number of companies globally.
What also appeared in that meltdown was a large amount of criminal behavior peddling toxic worthless assets, a large lack of scruples and moral values, a blatantly carnivorous environment of profit-taking, tax avoidance and overspeculative presumptious behavior based on unwarranted optimism about world conditions.
You might say voters already took the step of trying to introduce this unsuccessful mix into government, and are now awaiting the unrealistic results. Well, "too big to fail" doesn't actually mean it can't fail, especially since with the US government, there's no one bigger to bail us out. It's simply a big warning sign like those 100,000 volt power lines overhead that only a fool would try to touch. But as we know, fools rush in where angels fear to tread, and just as Britain has swallowed a season's worth of false promises in its Brexit gambit, the US has embarked on an unplanned, largely seat-of-the-pants approach to decision making, hoping that a young questionable inheritor of real estate fortune can just wing it where more professional administrators have crashed into the rocks. Faith-based government - we tried that in the 20's with "the business of government is business", to disastrous results.
So perhaps the caveat should be rephrased "Too Big to Fail Small". When the giant ferris wheel comes off its axle, the townsfolk are not amused.