A while back, I happened onto a story on the Web about Gene Simmons, bassist for the band Kiss, endorsing Mitt Romney for president. “America is a business and should be run by a businessman,” Simmons said.
Well, Gene is entitled to his opinion. He is, after all, a pretty astute businessman himself, being able to carve a nearly 40-year career in show business with little talent other than for showmanship and minimal musical craft. With all due respect, though, Gene is wrong — completely wrong.
America is not a business — it’s a nation. The federal government of the United States is not a business — it’s a government. A business exists for one reason and one reason only — to make money for its owners. That’s it. That is the sole purpose any business serves. Anything else a business does is either in service to that ultimate goal or is completely incidental.
In contrast, a government — federal, state, county, municipal, what have you — exists to provide essential services to the citizens and even non-citizen residents of the polity it represents. You may legitimately argue what constitutes an essential service and what services a government must provide — that’s the heart and soul of politics — but I don’t think that anyone can legitimately argue that any government is a business and should be run like a business.
In the first place, it isn’t the purpose of a government to make a profit. Yes, a government needs money to operate, to provide whatever essential services are agreed upon by its leadership. Managing money for a government certainly has many characteristics similar to managing money for a business — that’s just the way accounting and economics work. Making money, though, isn’t the purpose of government (well, except for the Mint, nyuck nyuck).
If a business wants to make money, it provides whatever goods and services it provides to the public. If it wants to make more money, it provides other goods and services. Which goods and services a privately owned business provides is pretty much up to it, at least as long as it stays within the law.
A government doesn’t work like that. With rare exception, a government makes all its money through taxation. Whether its income tax, property tax or some other form of tax — even if it’s not called a tax — that’s the source of a government’s money. No one likes playing taxes. Even the people who rationally recognize the need for it and who do it proudly as part of the cost of being a citizen don’t like to do it. Therefore, it’s in the best interest of the politicians who run the government — which isn’t the same thing as being in the best interest of the government or the polity it represents — to keep taxes as low as possible, at least on whatever group backs a particular office holder.
In order to make ends meet — that is, in order to pay for the services its leaders have agreed to provide — a government must sometimes borrow money. There’s nothing wrong with that, in and of itself. Businesses borrow money all the time in order to expand or just in order to keep their heads above water until they can make enough money to pay back their loans. It’s the same with a government.
The primary difference is that, if a business can no longer make enough money to stay open, it can just close down, or sell itself off, or any one of a variety of business strategies and tactics designed to keep a business alive. In contrast, a government cannot shut down, not if the polity it represents expects to maintain any semblance of functionality. All libertarian nonsense aside, a society needs a government in order to function.
So, if a government finds itself in a position where its expenditures exceed its income, at some point its leaders are going to have to sit down and determine which expenditures must be cut in order to keep the government’s doors open. The politicians who run the government generally fall back on the ideologies that got them elected concerning what should be cut and would should stay, at least in public. In private, most of them listen to the desired policies of whomever paid to get the politician elected and are financing his reelection to make those determinations.
Ideally, the services that the leaders of a government decide the government has to provide fall into two categories — those that meet the immediate needs of that society and those that are essential long-term investments for the society. A new highway, for example, is both — it meets the current transportation needs while at the same time being an investment in the future transportation needs of the society. A local government needs to provide things like police and fire protection, as well as local roads and education. Most elections in this country are funded on a county level, so that’s something a county government has to provide. Education has both short- and long-term benefits for a society.
It’s all complicated, and deciding the best thing to do while at the same time maintaining a more-or-less balanced budget is hard to do. Certainly, people with experience in business can contribute to those tasks — to some degree. The biggest mistake some who get into politics from the business world, and those who support them, make, however, is mistaking the needs of government for the needs of a business.
Businesses, especially large businesses, certainly do make long-term investments that support the business’s ability to make a profit over time. “Long-term” for a business, though, may be as little as 5 years. A CEO who doesn’t make a profit for his company after a few years is going to be an ex-CEO.
In contrast, a government must make long-term investments that are going to benefit future generations of citizens. Even the government of a small town funds initiatives that are going to affect not only current citizens but those citizens’ grandchildren and beyond.
A society cannot afford leaders who think only of short-term profit at the expense of long-term benefits for the society as a whole.
Think about it a moment. Think about the business leadership in this country now with which you are familiar. Do you want those people deciding what the world your grandchildren are going to be living in will be like? Do you trust today’s profit-at-all-costs business leaders to safeguard our future?