Tuesday, February 9, 2010

I'm from the government and I'm here to help...

How many times have you heard in the last couple of years that there is no golden bullet for solving the country’s economic problems? Regardless of the number, it’s wrong. There is a very simple way to solve our economic problems: Get government out of the way…

Government intervention caused most of the problems we currently face, and its continued (and growing) interventions do nothing but perpetuate them. Its size, scope, compensation and inefficiency combine to make it a hurdle on the road to recovery.

Size of government: Coincidently, just as the unemployment rate reaches double digits for the first time in almost 30 years, government payrolls reach their highest point ever. (And it's not just a federal problem...)

Scope of government: James Madison, the father of the Constitution did not believe a Bill of Rights was necessary. He felt it was unnecessary because government could not exercise powers it had not been given by its citizens in the Constitution. Unfortunately, he was wrong. Not only has government expanded beyond its explicitly limited Constitutional mandate like the Nile breaching its banks and flooding the Egyptian plain, but it has essentially taken over the roles of God, mother and father as well. As a result we have things like a government religion (global warming) whose inane and quixotic demands continue to envelop us even as its foundations crumble; a government infrastructure that attempts to “protect” us from every negative outcome that might ever befall us; an entrenched and insulated bureaucracy that, like the Borg, has as its only objective... survival, and which utilizes its police powers to force assimilation on all who might recoil from its designs. From CAFÉ standards to the Alternative Minimum Tax to No Child Left Behind or any one of a thousand other programs, there seems to be no place left where we can live beyond the reach of the government tentacles.

Government pay: As if power over those insolent enough to seek happiness on their own terms was not enough of an incentive to attract those who cannot find success in the private sector, JFK’s ill conceived introduction of unions into the government ranks has created a very strange situation where government workers earn far more than the private sector’s workers whose tax dollars pay their salaries.

Aside from the lunacy of siphoning off talent from the private sector, where the nation’s wealth is actually created, what makes this situation so ludicrous is that it induces government employees to become as inefficient as possible! How many employees are going to do their jobs so efficiently that they solve the very problems upon which their employment is based, just so that they can go and get a lower paying job somewhere else? How many government agencies have ever closed because they succeeded in their mandates? Is education in America better since the Department of Education was established in 1979? Have our energy problems gone away since the Department of Energy was established in 1977? Has poverty been eliminated since a phalanx of social programs was rolled out in the 1960’s? The answer to all three of course is no. Government rarely solves problems. By making government employment far more lucrative than private sector work, it only makes government more intractable and ineffective.

Government inefficiency: If you absolutely positively needed to have something delivered across the country within 24 hours, where do you go: the Post Office or Federal Express? If you were hit by a car as you were crossing a street and landed an equal distance from a private and a public hospital, which emergency room would you want be taken to? If you could send your child to either a private or public school, which one would you choose? When the chips are down, in almost every circumstance, government proves to be far more inefficient than the private sector, regardless of the arena. Here’s an example of the degree of inefficiency:

When the government-backed Human Genome Project (HGP) started to sequence the human genome in 1990, they expected to be done by 2005. By 1998 they had completed just 3% of the total. Enter a privately funded company named Celera Genomics, and its CEO Craig Venter, who brought a market focus and cutting edge technology to the project. On June 26, 2000 President Clinton announced the completion of a "working draft" of the human genome. The government-backed HGP took eight years to decode just 3% of the sequence. With the private sector acting as a competitor, catalyst and partner, the final 97% was sequenced in just 25 months! Imagine what competition could do for education, welfare or highway transportation.

None of this would be of any consequence if the government was simply a minor player in our daily lives. Unfortunately, it’s not. The American people are living in a jungle of red tape and taxation the founding fathers could never have imagined. The path out of this darkness is to simply take a machete to everything not rooted in the Constitution. While a certain amount of chaos would likely ensue with the closing of the Departments of Commerce, Education, Energy, Health & Human Services, Agriculture and most of the rest, America would no doubt land on its feet as private sector entities emerge to provide whatever information citizens need. Think about it. Who do you trust more to tell you about safe and economical cars: The Department of Transportation or Consumer Reports? Where would advertisers seeking an audience rather put their money: FOX, ESPN or PBS? If your town found itself in the middle of a natural disaster, who would you call first: The Red Cross or FEMA? This doesn’t mean that government should cease all operations, merely those for which there can be no explicit foundation found in the Constitution.

From Cyrus McCormick to John D. Rockefeller, to Juan Trippe to Bill Gates, Americans have a track record of innovation, problem solving, wealth creation, and yes, compassion to look back on. The unique American combination of freedom, capitalism and individual achievement has provided a foundation for two centuries of success, mostly by the private sector. It is time the government got out of the way and let the American people solve their problems on their own, without a government provided mommy holding their hands every step of the way. Sure, we may stumble and skin our knees, but that’s part of life. Besides, we don’t have to look very far to see even modern examples of market success bringing benefits to the country as a whole: Wal-Mart revolutionized the prescription market with its $4.00 a month drug offering, McDonalds perfected the art of feeding people inexpensively while Blake Mycoskie figured out how to give shoes to children in third world countries by creating a private sector shoe company. Given the size of the opportunity (i.e. the number of problems government has created) history dictates that Americans have the right stuff to be able to pick themselves up, dust themselves off, and march with much vigor back towards that “Shining city on a hill” and make the journey there a much better one for everyone involved than the one government has been dragging them down for the last half decade.

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