9 Reasons Why Business People Are Terrible At Governing

Author: September 29, 2012 5:00 am

A couple of weeks ago, someone sent me an email. The gist of it was that Walmart is a wildly successful company, so why don’t we hire them to run the government? Really? Walmart? Then I thought about it for a while. That email represented a very commonly held idea in this country, that a successful business is superior to government. We elect business people to office on the idea that they will run the government in a more cost effective manner than someone without business experience.

Despite years as a public servant, Mitt Romney is running for President on his business credentials, hoping Republican voters forget about his relatively liberal voting record and the dickish things that come out of his mouth. George Bush touted business acumen, and we know where that got us. To many voters that doesn’t matter. As long as someone knows how to make a buck, no matter how unethical the circumstances, he automatically would be good at handling the economy. They are wrong!

1. Companies are in business for one reason and one reason only…to make money. They are not in business to serve their employees or even their customers. A corporation is legally obligated to put profit above all else. This philosophy typically boils down to making the cheapest product the market will allow (or offering the least amount of service) and selling it at the highest price the market will allow. It’s one thing if your cell phone has a built in life span of six months to two years. It’s quite another for the electrical power grid.

2. Businesses do not care about their customers. I know. That statement is a little cold. They spend billions in advertising convincing us that they care about us. They truly want us to have clean clothes. They want us to have a clean environment. They want your children to frolic in fields. They sell you that toy just so your child can see you as the hero you are. They want you to be happy. Actually, no where in the corporate charter does it talk about customer happiness or even customer satisfaction. Sure, if a competitor is making their customers happy, there might be some incentive to go in that direction, but ultimately, it’s about the shareholders and only the shareholders. It’s easier and cheaper to improve the marketing than it is to improve the product or service. In other words, it’s fine to sell defective products, as long as they can manipulate a certain percentage of the people into believing they are buying a good product at a good price, their shareholders are happy. If the marketing campaign is really good, they will convince their customers that product defects are normal (as with many electronics) and that they should pay to replace their defective product with the next generation of the very same defective product.

3. The government is not in the business of turning a profit. Let’s use the post office as an example. Granted, the post office isn’t doing that great right now, but the reason for that is pretty simple. Thanks to a Republican Congress, they were forced to fund their retirement pensions for far longer than any other organization, public or private. But let’s say they were doing well. Let’s say they were profitable. Customers would be screaming. We would want that money back in the form of cheaper postage stamps. In fact, wasn’t that the entire premise behind the Bush tax cuts? The government had a surplus of funds. Bush and the Republicans felt it should go back to the taxpayers.

4. The government is not in the business of creating demand. By and large, government services are services deemed necessary for our society to function. Businesses spring up every day by creating new demands for new products. Pharmaceutical companies invent illnesses. Clothing manufacturers convince us that we are somehow inferior if we are caught wearing last year’s styles. Governments pick up trash, teach children, put out fires and serve justice. They have no incentive to have us create more trash, make dumber children, start fires or imprison innocent people. On the other hand, if those same services were run by business, the more trash they picked up, the more money they would earn. The more work they had to put into educating our children, the more money they would earn. The more fires they had to put out, the more money they would earn. The more people that they put in jail, the more money they earn.

5. The cost cutting measures taken by businesses can backfire on the government. Since the age of free trade agreements, one of the most common cost cutting measures has been to outsource jobs. In fact, Mitt Romney’s company taught businesses how to save money by outsourcing. Personally, I’m a little uncomfortable with foreign nationals running the CIA. Say what you will about government employees, at least they pay American payroll taxes.

6. The government is directly accountable to us. Post-Citizens United, this might sound somewhat naive, but we do still hold elections and only the people are eligible to vote. A corporate CEO, on the other hand, is controlled by a small group of people known as the board of directors. If we, the customers, wish to fire our President or Congressperson, all we have to do is show up at the polls (something Americans are notoriously bad at). If we, the customers, wish to fire the CEO of a multinational corporation, well, good luck.

7. Business people tend to do a very bad job at governing. George W. Bush and Dick Cheney both came from business backgrounds. They left the country in the worst financial shape since the Great Depression. Mitt Romney’s Massachusetts was 47th out of the 50 states for job creation.

8. Business is by definition, amoral. Morality is not part of the corporate charter. The US Constitution is a moral (not to be confused with religious) document. It is a code of conduct for all government officials. It states that government officials must answer to We the People. If We the People don’t like the Constitution, we can change it. Business people have no such codes of conduct, unless it is to instruct them to not embarrass the corporation and its board of directors. We the Customers have absolutely no input into any such code of conduct.

9. Finally, businesses can, and do do something that would be unacceptable for the US Government…they go bankrupt.

In all fairness, government runs best when represented by a variety of backgrounds. Business people do have a place in government as do trash collectors, artists and even community organizers. It runs best with a variety of perspectives. It runs best when it is run by We the People.

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  • ArtistMisty

    Speaking as an employee that has worked in small Mom & Pop business, self employed, and huge corporations I can say from experience that I would rather have a Government run the country than a Corporation. When I worked for a huge corporation we had pep meetings every morning. The main theme was ” Customer’s First and YOU COUNT”. What that amounted to was that Customers could come in groups, steal under 100 dollars a pop and if caught they wouldn’t be prosecuted for grand larceny. As an employee I was hired full time which meant 38 hours a week instead of 40 and that was cut back twice a week by forcing me to clock out 15 minutes early at closing time. Before you say that I could have stayed that extra 15 minutes,let me tell you, I was told I could stay but they were locking the building and letting the dogs loose. Insurance was priced so high that my wages couldn’t cover being insured. On top of all that when it came to the part of the slogan ” YOU COUNT” and I needed a transfer to escape a stalker I was denied. Once I chose safety by applying to another company getting accepted THEN and only THEN was my former company willing to grant me a transfer, After I had already excepted the other companies offer. Still I had to leave state because of my stalker because they found me. When I went to apply for unemployment benefits to help me get back on my feet in another state the former company that I had worked for, gave my loyalty to, had an excellent work record and stacks of recommendations from the service I gave, fought me tooth and nail so they didn’t have to pay me my unemployment benefits I had paid into and earned while in their employ. When I worked for a Mom & Pop business I was treated as one of the team, given fair wages and hours. I was treated as if I mattered to the business and given respect for my services rendered to the small company. If my experience is any indicator of how Big Business is going to run my Government I would have to say NO WAY do I want a corporation running this country. They LIE, cheat and steal from their employees. Take for example People who were encouraged to invest in retirement packages, worked for 30 to 50 years investing in those retirement packages, only to have the company sell out to move over seas for cheaper labor then losing all they worked for in an instant. Do I want people with this mind set running my country? I think NOT. I don’t want Mitt Romney getting his hands on my country or my Government and using his same business practices of chopping it apart, selling it off and walking away with all the money. Sorry but my experience with corporate business practices has taught me that as a simple employee I am just fodder and spoils of doing business. NO THANK YOU!!!! My Government might need work but for 200 years it has done just fine. I would rather elect someone that is willing to fix what needs to be fixed but leave the basic premise our founding fathers put in place. Do I think we need change? Yes I do but not elimination or demolition. This is from the employee’s point of view who has worked under corporate rule and found it wanting.

  • Second Amendment Democrat

    “Business is by definition, amoral. Morality is not part of the corporate charter. The US Constitution is a moral (not to be confused with religious) document. ”

    Absolutely correct, but try to explain that to a religious-right Teabagger. They WILL NOT understand why religion cannot be incorporated into a democratic government(they could, but the Fox propagandists yammering in the background destroy all semblance of rational thought.) And business people only see he opportunity for huge PROFIT – when Mitt sells off the rest of America’s resources (that IS his specialty, after all, Vulture Capitalism. Profiting from deliberate destruction.

    Business trains one to treat people as irrelevant, only PROFIT matters. No future, no sustainability, just the next quarter’s financial statement. If you want America to survive as a nation beyond March of 2013, keep the GOP OUT OF GOVERNMENT! Vote out ALL GOP pols. Avoid the civil war that MUST follow a fascist Republican victory.

  • While I think most of your analysis is spot-on, I’d point out that the Post Office would be doing fine if not for onerous pre-funding requirements inflicted on them by the Republican Congress during the ’00s. For some people, the idea that government programs must fail is a self-fulfilling prophecy.

  • I spent 40 years working in Fortune 500, manufacturing operations. No matter how well intentioned a company may be, over time, the accountants and MBA types gain the upper hand. Never in that time, did I ever see an accountant make an intelligent manufacturing decision. I met very few MBA’s who knew enough about the nuts and bolts of the operation to evaluate the information coming their way. Ultimately, it always comes down to numbers…….short term numbers…..even when the when the decisions based on those numbers are terrible over the long term.

  • unlike businesses, who choose their employees and get rid of them on a whim, governments cannot do this. so how would a business person deal with all those undesirable people that he can neither use nor abuse?

  • 1. Of course businesses make money by producing appealing goods and services … for PAYING customers. No business in the world is going to give services to unpaying customers, and yet governments must do precisely that: they must serve their citizens regardless of whether those citizens can pay.

    2. If you actually believe corporate mission statements are sincere expressions of the motives of the company and everyone in it, I have a bridge in Florida to sell you.

    3. Pure rhetorical blather. You’re totally missing the point, which is that the government isn’t SUPPOSED to make money. It’s like asking how profitable the Pentagon is.

    4. Health care is not a manufactured demand. If you are “forced” to buy health insurance against your will, it’s because you were apparently too stupid to buy it yourself even though you need it.

    5. Cost-cutting measures never backfire on customers? What a load of bullshit. Construction contractors who cut corners on I-beams and aircraft maintenance people who cut corners on load-bearing pins can’t possibly backfire on customers? Wake up and smell the reality, moron. This can and DOES happen; just look at the FAA’s history of aircraft crashes, or what happens in countries with poorly regulated construction sectors.

    6. Democracy is one man one vote. The market is one dollar one vote. People with more dollars get more votes. People without dollars get no votes. It’s inherently undemocratic.

    7. Empty talk.

    8. Yes, the government is in the morality business. That’s why it doesn’t let people starve to death in the streets. And yes, that’s “leftist, statist morality”, but it’s also shared by every civilized nation on Earth. If you don’t like it, feel free to move to Somalia.

    9. Yes, governments can go bankrupt. The result is generally horrific. But businesses are SUPPOSED to periodically go bankrupt; that’s how capitalism works. If businesses never go bankrupt, then the whole Darwinian system of natural selection which supposedly improves the market doesn’t work. You are still failing to understand that businesses run VERY differently from governments.

    • Sir, you are Wong on so many levels.

      Just kidding. Couldn’t resist. My name rhymes with fart if you care to retaliate. No disrespect intended.

    • Lynn Shackelford

      You know, Ms. Gittleson wrote a thoughtful, respectful opinion. You, Sir, couldn’t be bothered to do the same. Just because you disagree with someone, doesn’t mean that person is a moron. People who resort to name calling to get their point across, however…..

  • Being someone who supports the theory of evolution, I disagree with your thesis and have to defend the religous nutjobs. Some of the better schools are actually run by Catholics. A few bizarre or untrue beliefs didn’t make the crappy school system. The teacher unions and the state did.

    • How did the teacher unions make the supposedly “crappy” public schools? I have taught in both public and Catholic schools, for the record, so I do have a dog in this fight. Unions make schools worse by insisting that teachers be able to negotiate on their behalf, improving teacher pay and working conditions, etc, is that your argument? Give me a break and quit spouting talking points.

  • Sgt Snuggle Bunny

    Wow. Spoken like someone who doesn’t have a single minute’s experience running a business.

    1. Businesses may be in the job of turning profit but in order to do that they must attract people who will voluntarily give them that money. To do that they must provide goods and services to make themselves appeal to the customer more than the competition. I dare progressives to suggest competition and voluntary payment as a form of government revenue collection.

    2. This bilious crap? People are sheep waiting to sold the next explode-on-contact Pinto if only advertising is flashy enough. Well thank goodness government never lies and politicians never mislead (BTW libs, how’s that no more illegal wars thing working for you?)or engage in crony corporatism (*cough*GE*cough*). No, corporate charters don’t speak of happiness–but neither does ObamaCare. However, the corporate mission statement does put the customer first.

    3. The government doesn’t turn a profit is an understatement. Not only does it not turn a profit it wastes money and creates bureaucracies that cannot be reformed but manage to increase their power and revenue consumption while choking off the very revenue-paying private citizens they were supposedly meant to protect.

    4. If government isn’t in the business of creating demand why am I mandated to buy health insurance or investing in “green” technologies that hurt my family’s fiscal well-being? The fact is: if I want to buy a computer it’s because I want a computer, not because somebody printed an ad. Liberals keep complaining that the people are easily lead then they cry the people aren’t following them.

    5. Cost-cutting measures never backfire on the consumer who gets lower-priced goods and services. But then again statists don’t care about consumers, they care about feeding the state that feeds them.

    6. The government holds elections once every other year with some offices lasting 4 or six years. Every time I walk into a store and see the same product offered by 2 or more competing companies they are holding a campaign for my ballot/dollar.

    7. Business people make better leaders than academics with no experience or leftist ideologues with no clue.

    8. Oh, so now government is in the morality business. Leftist, statist morality, no less. I as a customer, control the morality of the companies I shop at because of they irk me I don’t shop there; to wit: all the witless boycotts against FOX. What exactly is the morality of “buy insurance and windmills or armed men with throw you in jail”?

    9. Governments do go bankrupt and, unlike a single company, when they do they create social upheavel, crime and even armed conflict. But not before they drag the citizenry that instituted their very existence through personal ruin with confiscatory taxation under threat of legal penalty or worse.

    Yes, companies go bankrupt because they failed to appeal to their customers in the daily elections of voluntarily gaining the consumer’s dollar. Nothing finishes off articles of absurd tripe so cleanly as a self-refuting statement.

    • “However, the corporate mission statement does put the customer first.”

      Son, are you out of your damned mind? You would have to be a liar or a fool to say that, and I can’t rule out the possibility that you’re both.

      A corporate mission statement may include marketing the illusion that the company puts the customer first, but they but profit first, and will do whatever they can get away with to get those profits.

      If you want to pay 0% taxes with absolutely no regulations, risk the lives and safety of your employees and others with impunity, and control the government, then move to Mexico and start a drug cartel.

      Don’t do it here. You’re stinking up the place.

    • Sgt, you have hit the nail right on the head. Funny, how the people who want to tell us the flaws in business prove they understand nothing all about businesses besides “they’re all evil rich people.”

    • 3. Throughout the previous 8 years of Democratic rule, it did indeed “turn a profit.” Republicans cry and cry about deficits but they are the ones who create the deficits. We’ve had social welfare programs in this country since the 1930s and they never caused huge deficits. Our current deficits are not due to entitlement programs, they are due to the Bush tax cuts which were designed in a period when there was a surplus. When there was no longer a surplus thanks to two Republican wars, those tax cuts should have been history. Who goes to war and irresponsibly cuts taxes at the same time? Republicans. You can’t create a deficit with tax cuts for the rich and then claim that the social safety net for the rest of Americans now needs to be cut because deficits are bad. You also can’t initiate those tax cuts without paying for them but then insist that everything else not having to do with giving more to the rich be paid for in advance. You can’t do any of those things and consider yourself anything but a morally bankrupt, wealth-serving politician, unless you’re a Republican and then you can pawn all that off as saving the country from that black radical.

  • Keyser Soze

    ‎1. A corporation is a creation of the state, where they receive special privilege under the state. Regardless, a business cannot make money unless it’s customers are satisfied with the product/service as it is a voluntary transaction. If the people want a business to stop doing something, they have all the power, they simply stop giving that business money.

    ‎2. Government does not care about people. I’ve never been waterboarded in a Walmart…

    3. I’m not ever sure there’s a point there? If government is not in business to make a profit, then why is half the nation’s wealth concentrated within 100 miles of DC?

    ‎5. Cost cutting measures can backfire? Providing a single example would at least lend a little credence to this point… Perhaps there are no examples… Oh, and government employees don’t pay taxes, they merely rebate monies back into the system to give a false impression of “fairness”.

    6. How naive… Oh wait, he already admitted he was… A fine example of the cognitive dissonance present in all statists.

    ‎7. All people do a bad job at governing, unless they are lining your pockets with other people’s money…everyone knows this.

    8. Government by definition is immoral, it is an archaic system of forced institutionalized arbitrary violence. The Constitution is not a moral document, it says that the People can do anything, absolutely anything, by a simple vote. Legal genocide? No problems, just need a 3/5ths vote. The Declaration of Independence is an example of a moral document.

    9. It seems fitting that such a ignorant statist should end with such a bold statement of ignorance. The US government already has gone bankrupt, three different times. Check and mate.

    • 1. Not all interactions are voluntary (with or without government). A sick person in need of treatment is not in a position to vote with his dollars, and treatment is not governed by supply and demand it is distributed by experts based on needs. A triage nurse doesn’t pick the next patient based on the highest bidder but rather who is in need of treatment the soonest based on expert opinion –which is as it should be. And the “power we have to “not give businesses our money” only works if we have money.

      2. Government waterboards people to keep them from bombing you. Wal Mart could care less if you’re bombed and would bomb you themselves if it would increase their market share and they could get away with it.

      3. That makes no sense. 100 miles of washington dc there are big economic centers… that has nothing to do with whether government is making a profit.

      5. Government employees don’t pay taxes? Um… check my pay stub yes we do.

      6. You’re a statist too unless you’re writing this from Somalia. If not why not? You’re sure to be a great success there without all that “government in the way.” Send us a post card from your mansion. There’s no iron curtain here you’re free to go any time.

      7. No they don’t. All money is someone else’s money at one time or another but we do know this: without government there IS NO MONEY. But you expect to get this service by magic somehow.

      8. “Government is bad bad evil bad.” I’m not sure which constitution you read but I don’t see anywhere where it says that or anything like that. More single villain ideology of the infantile deluded libertarian.

      9. Bla bla you’re ignorant if you don’t agree with me. Check out the six market failures that exist in all markets and that any econ 101 student learns about. Libertarian “philosophy” ignores these and pretends they don’t exist. Then get back to me.

  • Second Amendment Democrat

    While I agree with most of this article, I do take issue with the following:
    “Governments pick up trash, teach children and put out fires. They have no incentive to have us create more trash, make dumber children or start fires. ”

    Government has been dumbing down education for the past 40 years. It began when our well-educated college kids had the temerity to question their elders (betters – just ask ’em…) Viet Nam created a schism that has never healed, and during the war protest era, word went out (I heard a speech, probably in 1968 or 69, don’t remember who or why, but this pol called for a reduction in education, these smart-assed kids think they know it all…) What I do know is that i had a great public school education in the 50s, but my kids brought hoe NO school books the entire 12 years they were in class – there was only ONE SET per classroom, NOT per student.

    And now the mass public can be manipulated by Faux News and bullshit rhetoric, even training them to vote against themselves. Critical thinking is a deliberately de-trained art…

    We have been IQ-downgraded for profit, by those who will kill the planet – for profit – steal whatever isn’t nailed down and legislate against what IS nailed down.

    Government IS ALREADY run like a business – monkey business…

    • The Government didn’t dumb down schools: Local school boards run by conservative bible-thumpers have been dragging down school standards for the last 30 years. Think about TX: much of the anti-evolution, creationism baloney and the elimination of Thomas Jefferson from textbooks comes right out of the “running-schools-for-dummies-republican handbook.”

  • The best example of this is the idiot that was elected here in Florida, Rick Scott. This thieving POS stole over a billion dollars from the federal government and now as governor of Florida he has the place in total ruin. Trying to run Florida as a business and this moron’s pledge of more jobs has had the complete opposite effect. More and more folks are out of work because of this asshole.

  • At last, sanity rears its ugly head! I have been thinking along these lines for years. Whenever some dumb idiot come up to me and says something stupid like “Government should be run like a business,” I just want to beat them over the head. I like government with the people in control and not as a profit making venture.

  • this explains it

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