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February 6, 2015


There are millions of Americans of every political stripe who will tell you that government “should be run like a business.” Really? What “business” should our government emulate, Wall Street banks (who are charged almost daily with some new and different wrongdoing in the marketplace)? How about running the government like Enron was run before its CEO committed suicide after his conviction for felony? Or GE, which for the 2010 tax year received a three billion dollar refund on its income tax from our treasury even though it netted zillions of dollars in income for that tax year and even today keeps $110 billion dollars in profits outside the reach of the IRS overseas due to a “no tax unless repatriated” loophole in the internal revenue code?  No? Then how about “running the government” like one of Donald Trump’s casinos or other ventures which go bankrupt every so often? Yes? Why would anyone want to run the government like any of these businesses?

The reason government should not be run like these or any other businesses, however reputable and successful such businesses may be, is because the government is not a business, is not interested as a non-profit organization in making a profit, and cannot as constitutionally constituted share either corporate structure or business purpose because its structure and purpose are already set out in constitutions and laws, not state statutes, corporate charters and by-laws.

Government is not involved in making a profit; government is designed to provide services to its citizens first and foremost along with the care of public property, safety and education of its residents etc.  It is an apples and oranges comparison, since businesses exist to make a profit and government doesn’t, and any contrast between what business does and what government does or should do is subject to the foregoing limitations. I further note that horses and cows are both animals, but designed for different purposes. Horses don’t give milk for human consumption and we don’t race cows, just as corporations do not conduct wars and governments do etc.

The “government should be run like a business” crowd has a fundamental misconception of the order of things (or pretend to have) in their campaign to disparage government’s right to regulate, tax, and do things governments do in keeping with their charge to do so but which in practice may be averse to some of such crowd’s petty interests in, for instance, escaping regulation and taxation. This crowd is not against regulation per se; it is only opposed to regulation of its own activities (or those generally that would affect its bottom lines).

Thus, for instance, a loophole in the internal revenue code (with its implementing rules and regulations) which guarantees JP Morgan Chase Bank’s loans to foreign governments to buy Boeing planes via our Export-Import agency is welcomed and we hear nothing about such a cozy arrangement in the financial press or on Fox News. They don’t want to trumpet such corporate welfare arrangements in which you and I as taxpayers are guaranteeing loans made by the biggest bank on Wall Street to foreign governments at a profit with leveraged funds and zero risk of loss (since you and I have guaranteed the bank that it will be paid).Talk about a good deal for the bank – and a bad deal for the rest of us!

So Boeing gets to sell a plane and keep its plants busy with people making paychecks? Bunk! This has nothing to do with production of airplanes and paychecks; it has to do with finance, and those involved should seek financing from somewhere else other than on the backs of American taxpayers as guarantors of billions in contracts that are run through the Export-Import agency, ostensibly to keep our export industries humming. That is a front. If an airline needs a plane it will find the financing somewhere. How did American taxpayers get into this act? Let the parties in interest finance their purchase from Boeing elsewhere.

Nor is such crowd interested in discussion of the loophole in the code (and implementing regulations) that define what is plainly ordinary income as “carried interest” and thus subject to a far lesser rate of taxation. The rich and corporate class is selective in what to like or dislike with careful if silent attention paid to the corporate welfare goodies already in their pockets but at the ready to invest in propaganda and agitation in the public sphere for yet more and more corporate welfare via less regulation of their activities in order to garner new such goodies for their pockets, turning the “self-interest” Adam Smith wrote about into pure and unadulterated greed (and at heavy cost to the rest of us).

Why must we taxpayers assume the risks in corporate transactions? Let them assume the risks of non-payment with their own money and no taxpayer guaranties. With a 100 percent guaranty, I would not even classify such a transaction as a “loan” since the bank is a mere middle man in this transaction. Why pay interest to someone who has zero risk, no or little of its own capital in the mix etc? That’s a “loan?” Since it is our money that is at risk anyway, why not directly finance the costs of such planes and cut out the banks’ unnecessary profits for mere delivery of the checks and supporting papers? Why are such big banks paid, essentially, for doing nothing? If that is not corporate welfare, I am not sitting here.

So (if we could) run government like a business? We already are to some extent, as seen in the above discussion, and it isn’t working because, as usual, the rich and corporate class via its propaganda and congressional toadies is running off with the store while rest of us are left holding the bag (see bailouts, plane-financing guaranties etc. etc. etc.).

My vote is to run government like a government (having no choice) and having governments do what governments are charged to do in providing services to people while corporations pursue their for-profit activities (and with minimum mix of their very different functions).   GERALD   E

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