Conservatives and libertarians often argue that government should be run like a business. But they overlook a key difference. “We the People” are not employees. (More)

Progressive Puzzle Pieces, Part III – A Nation Is Not a Business (Non-Cynical Saturday)

This week Morning Feature will try to assemble the pieces we’ve covered over the past two months in series on Exiting the Crisis, The Darwin Economy, Nudge, Class Matters, The Empathy Gap, and Republic, Lost into a progressive big picture. Thursday we considered the free market dogma as argued by Andrew Napolitano, and why selfishness does not maximize the common good. Yesterday we reviewed why maximizing choices does not improve our lives, and why we need nudges toward better decisions. Today we conclude with issues of class, empathy, and Congress.

A spoof campaign?

Last night, MSNBC host Rachel Maddow described what she called “an a-ha! moment” on Republican presidential candidate Herman Cain:

She says Cain is not really running for president. Instead, she argues, he is staging a performance of running for president. How else to explain his citing lyrics from the Pokemon movie theme song, in his closing statement in the first GOP candidates debate, as the words of “a great poet?” Or his ludicrous 9-9-9 tax plan, the origin of which he claimed was a secret, that just happens to mirror the default settings in the video game SimCity? Or his bizarre TV ads, including an odd obsession with farm animals and a closeup of his campaign manager smoking? Or his jaw-dropping ignorance on foreign policy – not knowing what the Palestinian right-of-return issue is about, not recognizing the term neoconservative, not knowing that China has had nuclear weapons since the mid-1960s – and his defense that he doesn’t need to know the name of the president of “Uz-beki-beki-beki-stan-stan?” Or his astonishingly inept handling of the sexual harassment scandal, complete with a musical number at a press conference, even after Politico gave him ten days advance notice?

Maddow concludes that Cain must be performing a spoof of a presidential campaign, staging one comically brilliant but otherwise unfathomable blunder after another, just to see if anyone will notice. Maybe so. But there’s one part of Cain’s campaign that is straight out of the conservative and libertarian playbook: like Mitt Romney, Cain says he would run government like a business.

A business success story …

Whatever his campaign intentions, Cain did have success as the CEO of Godfathers Pizza. When he took over the firm in 1986, it had posted an $8 million loss. Within two years, Godfathers had erased the losses and boasted a $4 million profit, drawing a $50 million leveraged buyout offer from Pillsbury. That is impressive. But how did Cain do it?

According to a 1995 article in Nation’s Restaurant News, Cain used a familiar corporate strategy:

Cain’s methods were difficult but necessary – standard fare for the bottom line in corporate America. They included cost cutting through layoffs and store closures as well as such sales-stimulating strategies as new product introductions, which helped boost volume 15 percent.

“When I first came [to Godfather’s], it was not as difficult as it was later,” he says. “If I had been able to make a rapid initial assessment, I would have made all the cuts from the beginning. Later, after you spend a while working with some people, it gets difficult.”

When he took over the chain, it comprised 725 stores, but that number was quickly pared to 525 and has remained at that level for some time.
Cain also points out that systemwide sales at the time Godfather’s had 725 stores were about $260 million, while the much smaller system currently is generating $250 million annually.

For a business, that strategy makes sense. Why keep a store or factory open if it’s bleeding money from the corporation as a whole? Yes, the employees who worked at that restaurant or factory lose their jobs, but a business is not a social welfare agency. Absent some other compelling factors, any reasonable business leader will cut stores, factories, and employees who cost the company money.

… that won’t work for government.

But a President of the United States can’t.

It’s not a crime to retire without sufficient savings to support yourself, to be sick and unable to afford health insurance, to buy a home at the peak of a housing bubble and find your mortgage upside down when the bubble bursts, to lose a job, or to be born into poverty. And as we saw in Class Matters, class influences both your options and their consequences. People often fall on hard times through mistakes. But as we saw Thursday and yesterday, these are usually predictable mistakes that people with more resources can shrug off or from which they can easily recover.

At some level, most Americans recognize that. That’s why we outlawed debtors’ prisons in the early 19th century, and why most of us recoil in disgust at news stories of their de facto return. It would be less costly to euthanize seniors and the disabled, rather than support them with Social Security and Medicare. It would also be morally abhorrent. And while Mississippi received $209 billion more in federal spending than her residents paid in federal taxes from 1990-2009, we can’t shut Mississippi down like an unprofitable Godfathers restaurant.

Mississippi is a state, and her citizens – like seniors who didn’t save enough during their working years, like the disabled, like Americans saddled with upside-down mortgages or huge college loans, and like Americans born into and struggling with poverty – are part of “We the People.”

In fairness, Mitt Romney and Herman Cain are not the only political leaders who seem to struggle with that fact. As we saw in Republic, Lost, the votes of campaign contributors seem to count more than the votes of ordinary citizens. Given the Supreme Court’s rulings on campaign contributions as political speech, changing that will require a constitutional amendment. New Mexico Senator Tom Udall (D) proposed one such amendment this week, and progressives should support that idea.

The Big Progressive Picture

We’ve examined a lot of progressive puzzle pieces over the past two months, and it can be hard to assemble a puzzle without a picture. So here’s the Big Progressive Picture those pieces form:

We the People, in order to form a more perfect Union….

The United States is not a business, or a mere geographic aggregate of self-interested individuals. We are a nation, a People.

As humans, we make predictable mistakes. Many of those mistakes are inevitable, if we act only as individuals. Just as no rational hockey player would be the only player on the ice wearing a helmet, just as no rational banker would be the only one not taking excessive but profitable risks, no individual member of Congress can risk being the only politician not accepting campaign money. Other mistakes are not inevitable for each individual, but will predictably harm too many of us. On our own, too many of of won’t save as much as we should, not buy health insurance when we’re young and healthy, and other mistakes that shortchange our future selves in favor of short-term gain. Individual willpower is not the answer. Matched against both community norms and the limits of our biology, individual willpower is vastly outnumbered.

But when we act as a People, we can take steps to reduce those mistakes and limit their consequences. The NHL can mandate helmets, the government can regulate banks, and the Constitution can limit campaign donations. We the People can nudge ourselves to save more, to buy health insurance, to make better choices about our own health and education, and to care better for those in need.

That is not, as Milton Friedman wrote, “dictatorship, benevolent and maybe majoritarian, but dictatorship nonetheless.” Libertarians would argue government has no business doing such things. And they’re wrong.

That is “We the People, in order to form a more perfect Union….” And that is the only business of government.


Happy Saturday!