Government Is Not Business

Romney - No We Can't - NopeAdam Davidson has an interesting column over at the New York Times, Do Good C.E.O.’s Make Good Presidents? Mostly, the article is about the differences between running a state and running the federal government. The truth is that governors have very little effect on how well their economies improve. This is because they don’t have deficit spending as a tool the way that the President does.

I find it funny when Obama notes the strong economy in Ohio, conservatives always point out that Ohio has a Republican governor. But Ohio’s economic strength is due almost exclusively to President Obama and the GM bailout. John Kasich’s effect is minor if it exists at all.

Adam Davidson discusses Bobby Jindal’s tax reform in Louisiana. Louisiana is doing a lot better recently. But changing the tax code only helps the economy by convincing companies in other states to move there. This doesn’t create jobs generally. (This is a big problem and the reason that state taxes are so regressive.) And as the article points out, Louisiana is coming back largely thanks to federal stimulus following Katrina.

It is only at the end of the article that Davidson finally gets to the issue of CEOs as Presidents. Davidson writes:

These predictions suggest that it is in everyone’s interest to channel at least some of the benefits of high-growth businesses toward preparing the undereducated for a very different 21st century. These are not problems that any business executive has to deal with. When people or divisions at a company consistently underperform, they’re usually let go. For the president, of course, this isn’t an option.

And that is the key of it. Businessmen make money by laying off people. That doesn’t work for the economy as a whole. I think progressives need to talk more about this. The fact is that most people don’t understand it. And as a result, they deify businessmen, who may have skills, but they are exactly the opposite skills necessary to run the government.

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About Frank Moraes

Frank Moraes is a freelance writer and editor online and in print. He is educated as a scientist with a PhD in Atmospheric Physics. He has worked in climate science, remote sensing, throughout the computer industry, and as a college physics instructor. Find out more at About Frank Moraes.

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