From guest poster Bruce Kesler -
Business As Usual Goes In Circles
Statists on the Left resemble some private sector advocates on the Right. They argue over which path to take, both leading in similar circles. Both avoid the road right before their feet, as it would require looking forward to benefits for all instead of selfishly at themselves. That road not taken is of outcome neutral free enterprise that enriches all.
Statists on the Left defend and want to enlarge government programs that sap productivity, reward sloth, and create a New Class of taxpayer-supported or obliged favored. Their fun-house mirror images from the Right defend and want to enlarge large corporate welfare, wasteful and needless products, and self-serving and enriching speculation. Both are dependant upon the supposed largesse of government steering its huge budgets toward one or the other’s pets.
Government’s core role is in preserving freedoms to be individuals and national freedoms to avoid foes endangerment of our individual freedoms. One can legitimately, also, propose that government serves that role when it can mobilize to increase our abilities. But, government must then compete with other providers for which can do so most cost-effectively.
Private enterprise’s core role is in developing and selling -- transparently, honestly and without coercion -- solutions and products that individuals want to purchase, either directly or through government. One can legitimately propose that trial-and-error may be wasteful, and some of that waste enriches selfish schemers. But, if subject to market penalties, waste is most quickly penalized and investments that benefit more are encouraged.
In the current economic meltdown, the central fallacy of runaway statists and of irresponsible corporatists is exposed. Both plead they are too big to be allowed to fail. But, both already have failed. Both seek to put makeup on the zombie by sucking life out of productive sectors.
The easy pickings of criticism come to mind, but they only scratch the surface of our aimlessness and lack of understanding of what works: Competitiveness comes from competition, not from government protectionism.
Big-Three auto industry critics correctly point to uncompetitive wage rates and pension promises reducing profitability, but erroneously criticize now competitive quality or pricing. Their strides forward on these fronts came from having to meet quality and pricing market pressures from foreign-owned auto makers. Preserving their uncompetitive labor structure injects formaldehyde -- at the cost of more jobs lost and of taxes and debt squandered -- rather than life. Instead, auto executives plead for taxpayer-relief from exorbitant labor costs. Those who enable this avoid the clearly marked road.
That this seemingly easy and obvious conclusion is neglected by statists and by auto executives, both under pressure by union supporters or by union threats, highlights the path in other realms of our difficulties.
The bulk of state budgets are consumed by labor costs and pensions. The Left’s think tank, the Center on Budget and Policy Studies, counts 41 states in severe deficits, most wanting Washington to pay their bills as if manna from heaven. The Center points at relatively minor restraints placed on program beneficiaries – the first to be impacted when 50-75% of budgets are deemed “fixed costs” of government workers and structures -- while hiring – which exploded along with wages and benefits during the past 10 years – is merely slowed. The largest contributors to statist political candidates are government-employee unions. The obvious path should be that any state program be first subject to cost-effectiveness competition, as with school vouchers and other private service providers, subject to reasonable standards. Private providers, however, must meet – indeed, take the forefront in proposing -- such reasonable standards rather than seeking loopholes to be primarily self-serving. Clear and tested market standards are not the enemy of free enterprise but its underpinning.
Notice, this is a separate matter from whether this or that program is worthwhile. Those decisions will be clarified by open competition and standards of measurement.
More difficult distinctions arise when other realms are considered. For example, the contracting of Defense and State tasks abroad provide flexibility in staffing and incurring costs only when needed instead of idly in reserve, but at higher costs when necessary. Again, reasonable standards of competence and results for competition are required, rather than protecting government payrolls and longer-lasting retirement obligations. Veterans organizations and retired diplomats, here, operate like unions in being more oriented toward benefits than toward mission effectiveness.
Taxing certain expenditures and not others, exempting certain organizations – particularly “charities” whose prime recipients are those running and working for them, are more difficult to justify when exposed to more scrutiny.
These and many other instances of spreading transparency and freer competition provide citizens with clearer choices over their taxes. One-by-one and in mass, special favors embodied in the thousands of pages of tax codes will be exposed. Essentially, this would move toward more neutrality between richer and poorer, between saving/investment and consumption. Competition breeds competitiveness and more efficient choices that better meet each individual’s needs and ability to advance. The truly unfortunate are not abandoned. Instead, resources are not wasted but able to be focused on providing them with more opportunities. The truly motivated are not penalized for adding to their and our opportunities.
That’s the American road, not the protectionist staying-in-place circle of self-destruction we’re now trodding in circles.
