Your Right-Hand Man: Business isn't bad, It's us.

I recently read a blog in the New York Times that said essentially something like ‘We need to stop thinking of the government as the enemy and business as the good guy if we want to make progress.’ I then had a libertarian aneurysm. My face became all vacuumed and contorted like Ron Paul’s, the thick Stossel-esque mustache I had been growing simply fell out and I proceeded to convulse on the ground like Adam Smith was most likely doing in his grave.

When I recovered, I read the entirety of the post. I found that the point of the commentary was that government does do some good things, and that a little trust in government would help the country. There is some gravity to this statement. A little benefit of the doubt would most likely be a good thing, especially in times of uncertainty and especially in a time of war. I’m very into positive thinking and patriotism. However, there is a difference between hoping that one’s government does well and makes sound decisions, and sitting idly by while the government invades citizens’ personal affairs.

The government and the people are most harmonious when government knows its role. After some contemplation, I realized that the role-of-government argument is an important one, but one that has been debated since the revolution. I came to the conclusion that the part that most disturbed me about this writer’s idea was something that disturbs me often. The idea that business is bad. I know many liberal pundits, writers, bloggers and speakers that like to paint big businesses as dark and evil entities that must be stopped, as if Exxon-Mobil or Wal-Mart were headed by Dr. Claw from Inspector Gadget. The same people paint government as representative of the people, and because they were elected, they must be unselfish or infallible, or even ... gulp ... accountable. This is simply an incorrect portrayal.

I would like to illustrate my point through a few examples, the first being the state of Iowa. In Iowa, businesses are being taxed more often under the Culver administration than ever. In fact, taxed so frequently that the National Federation of Independent Businesses is now fervently anti-Culver. Meanwhile, Culver’s administration has blown through 230 million dollars (and counting) on government projects with no accountability, while Eastern Iowa desperately needed flood relief for nearly three months. If I remember correctly, didn’t we have a surplus at one point? Additionally, Culver has ensured a teacher salary increase because teachers are government employees and will vote for him. (I know this is a bit of a side note, and I could catch some heat for this, but isn’t it time we start wondering if teacher salary increases are good, even though teachers’ job security is impermeable?)

Might I suggest that if we increase teacher salary, we get rid of tenure so that we don’t have to pay crappy teachers more money? (I can practically hear Jonathon Kozol playing the Helen Lovejoy ‘Think of the children!’ card.) The state government’s payroll has increased even in a time of economic recession. It’s like the state government is trying to pit government employees against non-government employees. Another problem with the anti-business/pro-government stance is that it is often hypocritical, and I feel this is best exemplified by an issue facing congress right now. Democrats in congress like Charles Schumer are looking for support for the bailout package intended for the auto industry, yet demonize businesses like Shell for desiring profit or having lobbyists.

Here’s the reality; Exxon-Mobil and McDonalds employ Americans and perpetuate the economy exactly the same as Ford, GM, Chrysler or even the new Democratic darling, GE. They also all have lobbyists and desire profit. Couldn’t you guess which of those companies Chuck Schumer would be for bailing out and which ones he would scoff at? On a similar note, isn’t taxing Exxon-Mobil into oblivion the same as letting Ford fail, at least from the perspective of the worker? Doesn’t the American worker get laid off all the same? These are all American companies that employ Americans, and let’s not kid ourselves by saying someone who chooses to work for General Motors is a better person than someone who chooses to work for BP.

This reasoning leads me to conclude that Democrats in congress could be for bailing out the big three auto-manufacturers not because it would be devastating to the American workforce, but because Democrats are incredibly intertwined with unions. Unions are for the bailout for the worst reason; union contracts have become so intense and costly that they have prevented these companies from making a profit. I feel like these arguments amplify what is wrong about putting too much faith in government over business; the government is only accountable via ballot box every election cycle, while businesses are accountable to the market (which is made up of people), which is often instantaneous in its approval or disapproval.

If the government bails out these doomed companies instead of letting them fail in the market, then we will be further putting business into the realm of the unaccountable. What stops GM from making crappy cars that no one wants, or entering into idiotic and crippling labor contracts when they can simply ask for another bailout? Who is that company accountable to then? The people’s desire for Ford’s cars would dictate their business in a free market, and these companies would go the same way as other companies that die out. Furthermore, where was congress when the 8-Track tape industry folded? Or when Sega couldn’t make a profit on the Dreamcast? American workers are American workers regardless of industry.

So in summary, business, regardless of size, is not the bad guy, and neither is the government. However the government has a specific role to play, where businesses are made up of people who are accountable to each other. I do think that we as a country need to rely less on the government when market solutions, if we allow them to take place (especially in the situation of the bailout), could prevail.