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Tags: Markets | Objective | Government | jobs

Free Markets Are Objective, Govt Isn’t

By    |   Thursday, 25 October 2012 04:19 PM EDT

It’s true that government creates jobs. Of course, they do it only with money generated from the private sector.
We have generally paid our government to protect us and support the rule of law in our nation. That means national defense, law enforcement, the judicial system — things of that nature.
State and local governments are paid to keep the infrastructure in place, while the federal government maintains interstate transportation. State and local universities and school districts are paid to educate our kids.
Studies show that, historically, about 7.3 percent of our total workforce is in government work, growing with the population. They note that it has dropped down to 7 percent since 2009. If I’ve done the math right, that means government has lost 4 percent of its workforce during the recession. I assume that means “government unemployment” stands at 4 percent.
Private-sector unemployment is more like 15 percent. Any pundits moaning about government austerity or draconian personnel cuts should get a new talking point.
Although we value those government jobs — they are essential — we must be cautious about government growth. Entrepreneurs and business people in general define success by creating useful products, which bring in profits. The bigger the utility to society, the bigger the profit, the better.
So success in the private sector is measured by profits and revenues — the essential fact is that if you figure out how to help people, then profits and revenues will follow. And of course, the more profits, the more tax revenue flows to the government to support those “government jobs.”
In government, the highest achievers are rewarded for the size of the department they run. It’s assumed that the bigger the department or agency, the more useful good they are doing for society. We’ve learned, however, that’s not always the case.
More teachers and school administrators haven’t created more education achievement. More managers and employees in the U.S. Postal Service haven’t helped make it more efficient. In fact, when the USPS competes with the private sector — FedEx and UPS, for instance, not to mention email — the Postal Service loses.
We hope our elected representatives will hold down costs and eliminate corruption. But there’s not a lot of incentive to do so, unless the public rises up with a movement to call for cutting costs.
Government grows by growing its role in our lives. If it regulates diet as well as food safety, it is growing that role. If it regulates energy policies according to a political view that says we should be more like Europe in our fuel consumption, it will grow to influence not only energy but transportation, manufacturing, and regulators themselves.
Government is almost never an objective force — whether Republican or Democrat, it is supporting not only a political philosophy (which might benefit big business or unions, for instance), but also supporting those who vote for that party (NRA members on one side or NEA members on the other).
Markets are the great objective force of the private sector. New ideas have fewer obstacles to market entry than ever before, thanks to the power of the Internet.
Good ideas are found by consumers and customers. Good companies grow and succeed. Companies that become overly bureaucratized or that settle for mediocrity fail. No matter how big they are, they will fail if they don’t serve the public and develop relevant differentiation, which equals value.
Stupid companies die. Stupid government outlives us all. Our only defense against government getting bigger and stupider is holding down its size and spending. Apparently, we’re doing a pretty poor job of that so far, looking at the $16 trillion national debt. But it’s never too late to try to do better.
Fran Tarkenton is the Founder and CEO of OneMoreCustomer.com, a web resource for Small Business Advocacy and Education. After his Hall of Fame football career, Fran had a successful career in television and then turned to business. He has founded and built more than 20 successful companies and now spends his time coaching aspiring entrepreneurs. Read more reports from Fran Tarkenton — Click Here Now.

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It’s true that government creates jobs. Of course, they do it only with money generated from the private sector.
Thursday, 25 October 2012 04:19 PM
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