Hi Everyone – first time posting here, but I’ve been reading for months. I really like the community and am glad to be able to offer up some thoughts.
I really liked the piece “I am a social liberal, but a fiscal conservative”….. and if you believe that, I have a bridge to sell you. and it rang a bell with something that’s been rattling around in my mind for awhile.
I think progressives need to reclaim the idea of “Running Government Like A Business” from conservatives.
The typically “gov’t as business” conservative view is to come into government and cut spending, cut services & cut costs. And conservatives/middle of the road types tend to view the liberal view as “Spend more money! Raise more taxes! Give more money to those who haven’t earned it!”
We all know this is hogwash, but that’s the way it gets painted by the media and by anyone who’s not a politics & policy wonk (Which is unfortunately somewhere north of 90% of voters).
As Mark points out in Governor, We Have A Revenue Problem, our government here in “liberal” Massachusetts has struggled for years with budgets that are constrained by revenue cuts, and when you look across the country you see the same problem in other states that have embraced tax cuts (Sam Brownback in Kansas, Chris Christy in New Jersey). The way many states are looking to plug these gaps are to do things like cut public employee pensions & benefits, divert funds from the state’s rainy day fund revenue stream, or impose excise or other types of taxes that don’t impact income or capital gains and shift the tax burden towards consumers (Increasing tobacco & alcohol taxes, etc). I say we need to reframe the debate and talk about running government like a business, but with a progressive tilt.
So how do we accomplish this? If we want to appeal to a broad base, nothing can be sacrosanct and we should be open to some ideas from the conservative side, but put a progressive twist on them.
First things first, and this may prove to be unpopular, but I think we shouldn’t shy from wanting to make government more efficient and to look to cut government expenses across the board. I don’t mean “stupid” broad based cuts like we saw from Sequestration, but mandating that all departments & agencies find ways to be more efficient. Why do I suggest this? People want to think their tax dollars are not being squandered – that’s why people get teed-off when they hear about $500 Pentagon hammers, multi-million dollar IRS conferences, or even just RMV/DMV employees who seemingly don’t care about their jobs. This means embracing technology and finding ways to deliver the same level of service with fewer people & resources. Just like at a company, you don’t want to pay employees to sit on their duffs – employees need to show a return on investment. For decades government jobs have been a gold standard for moving oneself into the middle class, with job security, benefits, pensions, etc. I’m in no way saying that we shouldn’t pay people high salaries for delivering high levels of results, but we need to change the view that liberals just want “Big Government” and to give everyone a job they can’t get fired from and pay for them with taxes from the rich. We can have efficient government that delivers on progressive policies while still looking to trim unneeded spending and positions. Government too can be a pay for results organization, and you can craft those targets to be as progressive as you want. This may mean cutting government jobs, but we should do it smartly in a results oriented fashion and find ways to move those cut back into the broader workforce.
Next, we need to change the conversation on taxes. Let’s take a step back and ask what are taxes when we run Government as a Business? Taxes are the prices for the different services that governments provide. When you pay for your services with your tax dollars, you’re getting back a “product” in your schools, our military, government backed loans, police, courts, public transit, the FAA, roads & highways, etc. Conservatives love to talk about cutting taxes, because who doesn’t like lower prices? I love going shopping when there’s a sale on. However, the more you lower prices, the more you need to cut back on your product. The less taxes (lower prices) flowing into your schools, the fewer teachers we can afford, or we can only pay for less experienced teachers. The less taxes (lower prices) flowing into the military means less equipment, less training, fewer deployments when we really need them, less veteran health care. The less taxes (lower prices) flowing into the Highway Trust Fund means fewer new highways, less frequent road repairs, more potholes and bridges that collapse out of the blue. How do we change this conversation? On two fronts:
- First, people need to understand that what they pay in is what you get back. If you want Saks products, you need to pay Saks prices. If you’re okay shopping at Wal-Mart, then you’re going to get cheap products made in China instead of handcrafted products made in Europe (Or America). I think most people understand that, but we’ve let conservatives take the tax reigns and repeatedly say they can deliver Saks products are Wal-Mart prices because no one ever calls them out on their BS. This narrative can be shifted. 30 years of Republican led tax cuts have lead to inflated deficits, roads that barely function, the worst public transit in the developed world, an outdated FAA and a military that can barely meet its own mission goals. America – what do you want? Wal-Mart services, or can we at least aim for Target? Maybe everyone pays a little more, but what we get back last much longer
. - Secondly, we need to fight the “redistribution of wealth” argument from the right when it comes to higher taxes on the rich, and you can also make a business argument for that. The wealthy get a lot more out of this country than anyone else due to laws and institutions and policies put in place by the government. They live in a country with the best financial system in the world, allowing them to make record wealth. They live in a country with a fantastic court system, which they can use for bankruptcies & having the companies they helm fight out litigation. They have an amazing patent & copyright system, allowing them to protect their innovations. They have relatively lax regulatory systems that allow them to make huge money in everything from private equity to real estate to pharmaceuticals. The money may flow from the private sector, but it’s our government & laws that allow them to prosper – that’s why the rich come here to do business and why we have one of the most robust economies in the world. So when we propose to tax the rich at a higher rate, is it about “redistribution of wealth”? No, it’s about charging those who get the most benefit from our government & country a fair fee for the services they get back. If I’m running a business (A state or US government), my goal is to properly price the services I deliver to my client (In this case wealthy individuals or businesses). I’m not robbing from the rich to give to the poor, I’m asking for a fair price on the services my company gave you. To let you pay the same amount as someone who consumes almost nothing from me is either drastically overcharging the poor, or drastically undercharging the rich.
Next up, the Business of Government needs to talk about how it takes those taxes and generates ROI on them, and how it saves money for the shareholders (Tax payers). There are two parts to this as well:
- There are the Fixed Costs that government must pay to deliver basic services to it’s clients. As John outlined in “I am a social liberal, but a fiscal conservative”….. and if you believe that, I have a bridge to sell you, many progressive policies such as drug courts & drug treatment programs are much less expensive than incarceration; it costs less to give homeless housing than to deliver traditional homeless services; it costs less to provide universal health care than to let everyone fend for themselves. If we focus on reducing the fixed costs of government services while also providing better outcomes, we are generating a net ROI for society.
- Secondly, we need to talk about the ROI of initiatives to helps another class of the Business of Government’s clients – other businesses. Businesses love working with other businesses that add value for them. There’s a cost to doing business, but if your business sees a positive return on your costs, then you’re better off. Private sector example – you sell widgets. You have to buy widgets from someone. If you can buy your widgets cheaper from someone else but sell them for the same price, awesome – you just made money. Economics & business 101. The Business of Government does this all the time, but we don’t tend to talk about it in these same terms. When state governments keep the cost of public universities low, there’s an ROI for local businesses who hire those employees. When we build new interstates to service new ports or business areas, there’s an ROI for businesses who take advantage of those new interstates, plus now we the public can all drive on them as well. When the MBTA builds new transit lines, they spur economic development along the lines and make it easier & cheaper for businesses to get employees into their offices – that’s a net ROI. We need to talk about this more – not just to win over our shareholders (Tax payers) but also our clients (other businesses). We allow Conservatives to frame financial debates, often because their politicians have business backgrounds, so people think they have more experience in this area. To this I say bunk – we can reframe financial debates and possibly even win over business interests by investing in things that have a net ROI for everyone, as opposed to just those with a good business relationship (i.e. lobbying) with the government.
Lastly, we need to stop the Business of Government from making bad business deals. How do I mean this? In a few ways:
- As more and more privatization has happened over the years, we’ve allowed private enterprise to deliver more & more services to or for the government. And when cost overruns happen, the government is left on the hook. We have private contractors build our highways & major works projects with massive costs overruns (Think Big Dig or almost any local highway project). We let defense contractors go massively over-budget on the tools they’re developing for the military (Like the F-35 fighter, which is $130 billion+ over budget) and yet those companies pay minimal fines and continue to rake in record profits & pay shareholder dividends (See Northrop Grumman financials). These sorts of things are bad business. No business would go into deals that would put them on the hook for billions. We need to break this cycle and make our suppliers be more responsible. Part of this is that we are a bad client – government contracting laws are onerous, prone to change and otherwise a pain in the butt. But part of it is private sector businesses treating us like rubes – drastically underbidding projects and then putting us on the hooks for overruns. We need to make better investments and save our shareholders (taxpayers) money.
- The other size of this is the ways we allow other businesses take advantage of us as a supplier. If you think of all of the companies that pay minimum wage (Or below minimum wage for tipped workers), these companies are simply off-loading the social costs of their cheap labor onto our shareholders (tax payers) via higher costs of social assistance (Medicaid, food stamps, etc). That means our prices (taxes) are higher and Wal-Mart’s are cheaper because Wal-Mart is offloading the cost of their employees to us. By raising the minimum wage and adjusting it for inflation, we can back our prices (taxes) and let those businesses carry the costs of their own employees. Their prices may go up, but if your tax bill went down isn’t that a net win for our shareholders (tax payers)? Again, no regular business would take this deal, and neither should the Business of Government.
So can Progressives run Government like a business? I think so. Progressives should:
- Look to pay for results in government and streamline operations while still targeting progressive goals,
- Look to redefine how our clients look at the prices (taxes) they pay for their products (government services)
- Charge the richest clients the proper prices for the services they get from government
- Talk up the ROI government can deliver to all citizens and businesses, not just those who can work the system
- Stop going into bad business deals that wreck havoc on our finances and allow private businesses to shift their costs to our shareholders
A few overall ideas towards the above goals:
- Higher Education Spending – Businesses want better talent and states are trying to reduce costs of education, Let’s create a shift in higher education funding to generate meaningful return for the states: If you’re an in-state student and you get a job in-state when you graduate, you’ll get a further reduced tuition. If you’re an out-of-state student who wants to come here and then get a job in-state after you graduate, we’ll give you a rebate on your out-of-state tuition. If you want to leave the state after you graduate, that’s fine but you get a higher cost because you’re not generating an ROI for the state.
- Create A Two-Tiered Capital Gains Tax – The conservative argument against capital gains taxes is that it taxes investment. D’uh, that’s the point. But what we’ve also done is create a system where people who are employed in “investing” pay a lower tax than those who are simply “working” for their paycheck. We should create a two-tiered capital gains system where ordinary folks pay minimal capital gains on investments under a certain limit (Say $500,000 a year) and continue to enjoy no capital gains on the sale of their primary home (Subject to caps) and in their 401(k)/IRA/other retirement accounts. For those with Romney money, once your annual capital gains goes above a certain threshold, those capital gains are taxed at the ordinary income rate. That way if you’re at the top bracket and you made $5M last year from investing, you pay the same as someone who made $5M just “working”. Apply the same idea to carried interest or other forms of shielding investments so that everyone is on a level playing field.
- Use Business Taxes To Invest In Public Transit & Other Infrastructure Improvements That Benefit Not Just Business But People Too – It’s no secret that public transit here in Mass could be so much better. There are smaller cities around the world similar to Boston’s size that have much better public transit systems. If we want to improve worker productivity, limit people’s times commuting and increase business’s access to larger pools of employees, we should do this via taxes on business or commercial property. You say you want to build a giant new skyscraper in downtown Boston and count on the MBTA to bring your employees/customers to you? Great, here’s a commercial property tax surcharge that will go to the MBTA and MassDot to pay for more public transit & highway improvements.
Another similar idea is Sen. Warren’s pharma company “Swear Jar” that takes the punitive actions of private industry & reinvests them in a smart way.
Thanks for letting me share this with you all, and I look forward to refining this (As it’s a bit of a first draft brain dump) though your discussion!
n/t
Yes, government should be run as efficiently as possible. Your implication is that nobody is currently trying to do that. In fact, there are innumerable mechanisms built into government operations that were intended to prevent waste. Some of them even work, though a lot of them constitute the famous red tape that actually interferes with efficient operations. The answer is not to adopt any kind of business model, because the goals of businesses and governments are very different. You do not want private enterprise to supply your educational, firefighting, police, and public works functions. You really don’t. The enormous clusterfuck that is our healthcare financing system is not an accident; it is a nearly inevitable result of having a for-profit industry controlling the provision of a necessary public function. It’s the reason we pay twice as much as anybody else for mediocre health care. Businesses are not intrinsically more efficient than governments. They have every bit as much waste and inefficiency as public services do, but are mostly not subject to the same kind of scrutiny.
The “run government like a business” thing is and always has been crap. I don’t want to reclaim it. I want to drown it in a bathtub.
…kind of like Steve Grossman co-opting the term “job creator” to describe himself a lot more accurately than how the GOP has used the term lately.
Christopher is right – I don’t actually want to see government run like a business (Otherwise we’d just outsource everything to China and be done with it). It’s reframing the arguments and using the language that Conservatives have successfully turned against Progressives & our policy goals.
I liken it to some discussions I’ve had with family members. I have a few family members who’ve done quite well for themselves and made upper-class incomes. When you start talking policy with them, you can get them to agree to things like spreading around health care costs is a good idea, drug courts are a good idea, raising revenues can be a good idea. But you have to be careful because if you start using certain trigger words they start to say “Oh goodness, I can’t sound like a LIBERAL! But I’m a job creator!” and all of that agreement on tangible ideas flies out the window.
Last year, Professor David Harvey gave a talk after the publication of his book “The 17 Contradictions and The End of Capitalism”. I haven’t read the book, but the talk was a delight; in it he described his experience in Baltimore in the 70”s as a Johns Hopkins graduate student, or maybe as a post-doc, working with business and community leaders on a committee dealing with local issues of housing.
Because he was the sole Brit, the other members of the committee assumed he could write and so he was tasked with writing up preliminary findings for further discussion. Because he was (and is) also a Marxist he wrote up the preliminary findings using terms like “exchange value” and “use value” which, as he describes is “volume one, page one of Das Kapital” — that is to say, raw Marxist language. The committee, he relates — and in particular the then-head of Chase Manhattan bank — thought it was brilliant! He’s very dry and in the talk he states (paraphasing) “I guess if they like this so much, I had better turn to page two of Das Kapital.” He eventually had to fess up and they moved forward, but not, I’m sure, after some awkward silences.
My problem with Marxism is that Marx was brilliant at identifying the problem and horrible at identifying the solution… AND that it is only the sheer brilliance of Marx’s diagnosis that invites taking his cure seriously. I mention that because I think your post is a little like that: you have well and comprehensively diagnosed the problem; I do not think you have specified a workable cure. There is, simply put, no progressive case for running government like a business. Making a case that sounds like the progressive case — but which really isn’t — isn’t much more than a case that we can (or should) try to fool the rubes better than the other side. I think that if you want to change the conversation, on efficiency or taxes or what have you, you have to change the conversation not just the appearance of the conversation.
For myself only, whenever I hear someone say we should “run government like a business” I think some variation of “businesses fail all the time” and/or “businesses get bailed out all the time” which are options of running a business not available to government: when a business fails some people need to find another job and other people get a great deal on used office furniture; when government fails everybody puts on armbands, picks a side and starts killing each other.
… Missed a tag. Sorry for excess italics. Preview did not catch this.
And his organization in the UK: Res Publica
I was briefly attached to Res Publica US before it couldn’t find funding. It’s journal Solidarity Hall (which I am an infrequent contributor to) is still active and has morphed into it’s own online presence. It has since become more oriented around a particularly Catholic approach to political economy, but you are welcome to follow us. An odd mix of distributionists, traditionalist Catholics, and Catholic socialists-and some folks in between.
Still waiting to read Blond’s Americanized version of his influential book on Red Toryism. The wiki entry on German Christian democracy about sums it up for me:
Oh how I wish American social conservatives favored paid family leave over public funding of nurseries!
.. I have not. I will check them out. Thanks for the link. (It’s possible that I’ve hear some stuff from, or about, the organization without connecting dots… but we shall see.)
First off, welcome to BMG posting Adeas!
Secondly, ideologically I am with you kirth. Let’s drown this phrase in a bathrub, the problem is, the 90% of voters that don’t know their political history or policy like we do, actually buy into this. Or the ‘balancing a families budget/balancing a government’s budget’ mentality. And for the state level, I think this kind of re-framing makes a ton of sense. It’s just a way to spin the policy arguments we have already won internally with one another, and arguably within the policy academy, while framing it in a way that is politically viable.
Baker shouldn’t have been able to come in there and say ‘Ill be a better manager’ and win this thing, and he won the male vote, he won a lot of small business people and a lot of IT and Biotech folks with his arguments.
Last week I asked how do we kill the Taxachusetts narrative-by loudly and boldly showing that our government works, works well, and that it needs more money to work even better for a greater number of people.
We all are values voters here, in favor of more social justice and equity. Medicare for all, universal basic income, building homes for the homeless, universal day care, universal pre-k, and public transit are all ideaswe couch in the language of values. We need to help the sick, help the poor, house the homeless, feed the needy, care for our children, and save the Earth by using less cars. Yet, if you are attracted to those values arguments-you are already a progressive voter.
To the suburban swing voter in Massachusetts, a dollars and sense approach makes more sense. These are folks that are by and large the dreaded ‘socially liberal, fiscally conservative’ combo. And the irony is, all these ‘socialistic’ ideas actually are significantly cheaper and reduce overall costs in the long run.
Study after study after study has shown that when poor kids no longer have to worry about their immediate food, medical, or housing needs-they perform better. That’s the main key to Finland’s success, and it smokes us on all the test score metrics the ed reform crowd loves to crow about.
Medicare is more efficient than private insurance.
Free public college education is cheaper than the status quo.
It’s cheaper to house the homeless than leave them on the streets.
Growing numbers of libertarians endorse basic income because it is cheaper and more efficient than the war on poverty.
Ending the war on drugs and legalizing pot would generate income, a more persuasive argument than the decades long fight to end the crack/coke disparity and fair sentencing.
The high cost of the death penalty is the main reason numbers have finally trended against it. We just can’t afford such an indulgence these days.
has been out since Ross Perot.
It just doesn’t make any sense.
Baker wouldn’t have been able to make this case if the Patrick administration (and therefore by inference Coakley as his successor) acted like they gave a f*ck, not only how they ran things, but even how the administration’s actions/responses affected people’s perceptions.
Coakley had a great opportunity to distance herself from Deval and outflank Baker on DCF and she totally blew it.
The biggest problem with trying to run government like a business is that it isn’t a business. I’ve talked about how business has freedoms that are prohibited, at least politically, from being enjoyed by government, namely profit.
But what really hamstrings government efficiency is democracy. Business management is far from perfect or completely efficient, but they don’t have to worry about anything but profit. Shareholders don’t have much of a say. Neither do boards of directors. Unless there’s no profit being made. There is a very top-down organization. Government is hamstrung by the politics of democracy every time it tries to do anything.
Example: the best decision from a business point of view would have been to index the gas tax to inflation. That would have made revenue more stable and reliable for infrastructure spending. That’s what a business would have wanted and done. But democracy interfered. It’s like that to some degree with all government spending.
I don’t think Adeas is doing that. The argument isn’t ‘government should run like a business or that it does, but that for the folks who think it should or does run that way, this is a great way to repackage progressive policy proposals in a way that makes sense to the suburban swing voter. The ‘social libera/fiscal conservative’ combo is a lot more potent and alive in Massachusetts than we realize.
I’m not sure it’s possible to repackage what government does. Comparisons might help where appropriate, but false comparison can be self-defeating. I think specifically of Obama comparing the cutting the nation’s deficit to a household tightening its belt. He said it for credibility’s sake, but he managed to reinforce a point of view that is both economically incorrect and self-defeating.
As a minor public official, I’m more interested in educating my townspeople in what government is, how it works, and why it is the way it is. I’ve actually started to work up a curriculum of governmental principles should I decide to teach an informal class on the subject. I agree we need to address the business/government frame, but I think the truth is ultimately more effective.
…”Democracy is the worst form of government, except for all the others which have been tried from time to time.”
On the one hand, if we mean “like a business” that we (government) work to align operations with our goals, that we put people with the right skills and insights in the right positions, that we are compassionate employers but insist on real performance, that we implement policies that will work, that we reorganize when it will improve our processes, that we work hard to eliminate corruption, and that we hold leaders and individual contributors accountable, then I say SURE. Doing many of these things will be a win for everyone. And when we make progress in those areas, we should shout it from the rooftops just like we shout about the other important goals we accomplish.
If “like a business” means that we are crystal clear about our goals, that the entire organization internalizes them, that we have clear strategies to achieve those goals and motivate people to work hard to implement those strategies, then I say SURE. On the other hand, the overarching goals ARE different, and many means available to businesses aren’t available to government. That’s by design. Aside from the democracy point, government can’t externalize challenges that are hard or complicated or risky or uncertain – like serving the truly needy people in our society that have nowhere else to turn. Like dealing with crumbling infrastructure or climate change. Governments can’t choose strategically which customers they will or won’t serve (all of the citizens and some who aren’t are customers, like it or not). But they CAN be clearer about the costs of what they do, where the money goes, and what needs to be spent/invested to accomplish the goals. I think governments need to be more courageous about setting bold goals and accomplishing them. Think JFK and getting to the moon. But the steady work of running more efficiently, effectively, and accountably needs to be done each day as well if we are to inspire Massachusetts voters to invest more.
I think some people vote for republicans / conservatives in Massachusetts because it’s their way of creating “checks and balances.” They don’t want one group of people getting too cozy in the state house, because they think, in a somewhat vague way, that coziness leads to ineffectiveness, that a new broom will improve efficiency, whether that’s a Dem broom or a Republican broom, and that Republicans, as a class, are more likely to be efficiency-oriented. This is approach is a SYMPTOM of a perception that government is not effective or accountable. So yes, let’s improve effectiveness and accountability while at the same time establishing a bold progressive agenda that ASKS FOR THE SALE — that explains WHY the public should invest, what it will get in return, and what it will take to get to the goal.