Running Government Like a Business

Conservatives often put out the mantra that we need to run government like a business.  The problem with that concept is that there are many different business models.   What it takes for a business to be successful depends to a large degree on the products that the business made and the structure of that business.  For the past several years, we have seen what happens when the government is run  like the Trump Organization, and it has not been pretty.

The business model of the Trump Organization had several major features.  First, and most importantly, it is a privately held organization in which Donald Trump is the primary owner.  In short, the Trump Organization was for over forty years the alter ego of Donald Trump.  He had complete control and did not answer to anybody.   Second, in the commercial real estate business, debt is not a bad thing.  It is not unusual for the purchase of a building to be financed with large loans (i.e. mortgages) that are refinanced when they come due (with very little payments made toward the principal and the debt only fully paid off when the building is sold).  Third, and pretty much unique to the Trump Organization, the far-flung nature of the holdings meant that the business rarely worked with other companies — beyond its bankers — on repeat occasions.  This lack of an on-going relationship with local contractors meant that Trump was able to break deals with the companies that he hired to work on his properties without having to worry about the need to make future deals with the same contractors.

Over the past several months, we have seen Trump repeatedly return to his practices from his time as a high risk real estate developer.  He has treated the U.S. government as if he were the sole owner making decisions for his personal benefit rather than the good of the country.  In particular, he has used his power to make the U.S.  government and foreign governments deal with the Trump Organization — rerouting government flights so that U.S. personnel have to stay at Trump properties while staying overseas and he has proposed holding international summits at Trump properties.

He has also shown that debt simply does not matter to him.  He passed through a large scale tax cut designed to benefit individuals like Donald Trump that has blown a hole in the deficit.   The deficit has gone from $585 billion in Fiscal Year 2016 (ending September 2016) to $665 billion in Fiscal Year 2017 to $779 billion in Fiscal Year 2018 to an estimated $960 million for Fiscal Year 2019 (based on August’s estimates).   Barring any substantial changes, the deficit will go over $1 trillion in the next fiscal year and keep on growing.   And this increasing deficit is not in response to a recession (like the last time that the U.S. deficit went over $1 trillion) and has not triggered any substantial economic growth (because the country was already near full employment).

Third, he has shown that the long-term interests of the United States are simply insignificant and that every dealing with other countries are about what have you done for me lately with the me being Donald Trump rather than the United States.  The list of agreements that the United States has broken in the past several years — on climate change, on nuclear weapons, on controlling Iran’s nuclear weapons — continues to grow.  President Trump’s cowardly and craven betrayal of the Kurds goes without saying.  And we continue to learn daily more and more about President Trump’s willingness to put the safety and security of our allies in Ukraine at risk to pressure them into helping dig up dirt on Joe Biden for the 2020 election.  It is one thing for a private company to break its word in one-time-only deals.  But a country has to deal with its neighbors, its allies, and its enemies again and again.  A country that has no honor and is unable to be trusted to keep its word can sometimes get a favorable deal because it has the upper hand.   However, no situation is static.  And at some point, our leverage will not be as strong.  If a deal is not mutually beneficial and we can’t be trusted to keep our deals when they are no longer to our benefit, we have to expect that other countries will not keep deals with us when it is no longer to their benefit and our leverage has declined.  But folks like Trump who have never had a long-term deal simply do not understand the extent to which the United States has benefited from having a stable world economic order in which the U.S. is the leading nation.

While there are benefits to a more business-like look at government policies — do the benefits exceed the costs, are our programs designed in a way that gets the best results for the least costs; are we getting enough revenue to cover our spending programs (and, if not, what changes would increase revenue or decrease costs with the least impact on our economy) — the reality is that a government is not a business.  The government has obligations to its citizens — to keep them safe, to provide justice, to provide the infrastructure necessary to a healthy community and productive economy — both in the long-term and in the short-term — and do not receive voluntary payments from willing customers who want those goods and services.

For almost three years now, we have seen the problem of a corrupt individual trying to transfer a corrupt business model to the U.S. government.  We can only hope that this national nightmare will soon end and that twenty or more Republican Senators will have the courage next Spring to stand up for the United States Constitution that they claim to hold dear.  If the Republican Party is not willing to stand up for the values of America in the Spring of 2020, it will fall on us as Democrats to ask the voters of this country in November 2020 to stand up to preserve American democracy from a Republican Party that has allowed itself to be corrupted from within.

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