Jared Kushner says government should be run like a company

[fishbob]

Bad idea.

Did you ever work for a family owned company when you were not a member of the family? Family and friends are valued much more than competence.

Even in publicly owned companies - in some cases loyalty is valued much more than competence.

 

[Hlafordlaes]

Definitely not; I don't think it's possible to run every facet of government like a business. But process improvements like these are exactly what businesses do and what too few government agencies do. I think that this is the kind of thing Trump/Kushner have in mind rather than attempting to run the entire government as a business.

I disagree. The plan is very much to downsize, not reengineer, with the idea that minimizing expenditures and taxes is the same as lowering business costs. The philosophy justifying this is derived from mistaking government for something other than the expression of the will of the people, meaning that dismantling programs that have majority support is a perfect example of why running government as a business makes no sense, broadly speaking.

 

[rdwight]

So, when you see something like Medicare having administrative costs around 2% in comparison to an industry averages of around 17% for private insurers, and those private companies are successful, they earn high profits, how does that affect your analysis of the claim?

What I object to about the "government should run like business" claim is the assumption that businesses are more efficient.

What if government were run like very successful private defense contractors? We wasted at least $60 billion on fraud and abuse from defense contractors in Afghanistan and Iraq.

And it seems slimy to say a "successful business." Why not, "Government should run like a successful governmental agency."

The point of the analogy is to suggest that businesses are inherently more efficient than government. This just isn't true. Both can be run well, both can be run horrifically. Assuming success in the claim just makes it meaningless. Yes, everything should be run like things that run well. Profound.

Can't argue with your view that private insurance administrative costs are higher than medicare, although I don't think the numbers are agreed upon completely (medicare ranging from 1.2% to 5%, private insurance from 11.5% to 20%+).

Not sure if there is a consensus if these profits and added administrative costs for private insurance have decreased outcomes or increased premiums for customers overall. You could argue that increasing costs in certain administrative duties in medicare could lead to savings.

The defense contractor statement would seem better directed at government waste than issues with the private contractors being inefficient. They made an additional 60$ due to government waste. Not the other way around.

And it seems slimy to say a "successful business." Why not, "Government should run like a successful governmental agency."

Agree. I don't think the phrase is really something profound nor something people should fall back on. My view is that certain outcomes are harder to accomplish in government since they are often tackled by multiple agencies, each with their own agendas. Whether business tactics would work to tackle issues like this is something I don't have the knowledge to argue. [Edit] I do think there is sufficient evidence that when government workers are pitted against losing work to private industry, it results in savings. They are forced to become as efficient as private industry or lose jobs. Without this competition, it is hard to argue this would happen naturally.

Off topic but I enjoy our conversations. It forces me to research my opinions more in depth to see if they stand up. Right or wrong, at least I'm more informed by the end.

 

[TraneWreck]

Off topic but I enjoy our conversations. It forces me to research my opinions more in depth to see if they stand up. Right or wrong, at least I'm more informed by the end.

Agreed. You have interesting views and support them well. I definitely learn from our encounters.

 

[Belz...]

Bad idea.

Did you ever work for a family owned company when you were not a member of the family? Family and friends are valued much more than competence.

I know this from experience.

 

[TraneWreck]

The defense contractor statement would seem better directed at government waste than issues with the private contractors being inefficient. They made an additional 60$ due to government waste. Not the other way around.

I suppose the point would be that they're making a ton of money largely on skirting laws. That's "success," but is it a good model for a governmental agency?

Agree. I don't think the phrase is really something profound nor something people should fall back on. My view is that certain outcomes are harder to accomplish in government since they are often tackled by multiple agencies, each with their own agendas. Whether business tactics would work to tackle issues like this is something I don't have the knowledge to argue.

Like so many things these days, it's not a concept that I disagree with. I will gladly acknowledge that businesses are better suited for some things, but we exist in a world where an active, sizable political block (in fact, the block controlling all branches of our federal government) deny the reverse: that there are some things government can be better at.

It constantly puts people on my side of the aisle in a weird position: we end up defending a monstrosity like the ACA because the alternative is worse and it's the best we can do.

I'm all for streamlining government, eliminating fraud and abuse, partnering with private groups where it makes sense, but that discussion occurs in such a slanted political environment that it's borderline impossible to yield that ground to start a compromise.

Regulations are another good example. I am confident there are a lot of bad, useless, wasteful regulations. It's hard to support calls for reform, though, because those calls come from folks who think it's just absurd that mining companies can't dump their waste directly into streams or that it's just a waste of time to try and monitor the derivatives market or think the entire concept of regulation, at all, should be destroyed.

 

[ponderingturtle]

Personally, I think it might be better to treat the citizens as shareholders. If we're only customers, who are the shareholders?

Like they know anything about shareholders, they are not involved in public businesses.

 

[ponderingturtle]

I agree with the principle that government should be run more like a business, especially in the sense that each individual agency should be. The goals of each agency should be 1)Excellent service to the citizens it serves; 2)A focus on increasing efficiency and reducing expenditures; 3)A focus on returning dividends (tax savings) to it's shareholders (taxpayers).

I see absolutely nothing controversial in this simple idea and I'm pretty sure that's what Kushner was getting at.

Running them like a business is nothing like that though, it is maximizing shareholder value. If crappy service does not hurt shareholder value you don't need good service, see cable companies.

It is simply not terribly relevant other than both being involved in management.

 

[ponderingturtle]

Shareholders can be customers. Heck, I'm an employee, a shareholder, and a customer of the same company. Roles aren't mutually exclusive.

And as customers the role of government is to figure out how to maximize the amount of money it can get from us.

 

[Beelzebuddy]

I think you could make an argument that the government should be run like a rural utility cooperative company. All customers are equal shareholders, company operation is kept very transparent, and any profit is folded back into infrastructure to push more services out to customers who would not otherwise be worth the investment.

 

[xjx388]

Can you be specific? Which areas specifically are bloated?

Pick an agency. It's bloated.

Look at this Organization Chart for the EPA -more like multiple pages of multiple charts. You don't find many businesses with such extensive charts. How many of those positions could be combined? How effective are the various branches at carrying out their tasks? Are the goals of the agency worth the expense being spent to achieve them? These are questions any successful business asks itself every day because it's existence depends on answering them correctly. Government agencies have no such motivation; their funding comes whether they are doing any good or not. And in the case of the EPA, the Flint Water crisis is a good indicator that they aren't very good at what they do.

 

[Upchurch]

To me, the funny thing about this is the idea that businesses, especially large corporations, are models of efficiency that should be replicated. My experience has been that they are anything but.

 

[CapelDodger]

I think he meant "I am demonstrating my loyalty to Donald Trump by parroting a well-known and moderately controversial position of his."

Which is, of course, utterly vapid. Like Trump and Kushner.

 

[blutoski]

To me, the funny thing about this is the idea that businesses, especially large corporations, are models of efficiency that should be replicated. My experience has been that they are anything but.

Yep. The bigger the organization, the more complex, wasteful, and lumbering it gets.

Both business and government have incentives to be efficient, so that's not a distinguishing factor.

What does distinguish government from business is that it's not designed to be profitable, it has zero tolerance for bankruptcy, and the shareowners are also the customers, so good luck if your business model is to pursue success by making operations opaque so you can provide less value than a fair exchange to everybody but management.

 

[xjx388]

Yep. The bigger the organization, the more complex, wasteful, and lumbering it gets.

Both business and government have incentives to be efficient, so that's not a distinguishing factor.

What does distinguish government from business is that it's not designed to be profitable, it has zero tolerance for bankruptcy, and the shareowners are also the customers, so good luck if your business model is to pursue success by making operations opaque so you can provide less value than a fair exchange to everybody but management.

In business, inefficiency lowers shareholder return and the long-term viability of the concern. Not all businesses are perfectly efficient, of course, but that's still an incentive to be more efficient. What is government's incentive to be more efficient?

 

[Civet]

It's important to use the right type of fertilizer in the garden. You also have to know how much to prune certain plants. Weeding is crucial as well. Plants need the right amount of water and sun in order to grow properly.

 

[Garrison]

In business, inefficiency lowers shareholder return and the long-term viability of the concern. Not all businesses are perfectly efficient, of course, but that's still an incentive to be more efficient. What is government's incentive to be more efficient?

Problem is that you seem to have decided that greater efficiency equates to lower costs and that's not necessarily the case with government. For example if you have a social program that is currently reaching say 75% of those entitled to assistance raising its 'efficiency' to 100% may well drive up costs. Of course you could decide you want the agency charged with running the above program to find excuses to remove people's entitlement and reduce costs, you could call that efficiency if you wanted to.

 

[blutoski]

In business, inefficiency lowers shareholder return and the long-term viability of the concern.

Yep.

Not all businesses are perfectly efficient, of course, but that's still an incentive to be more efficient. What is government's incentive to be more efficient?

If they don't they're fired?

Public organizational units are allocated funds, and need to achieve their operational goals within ig. There is an entire department (the GAO) whose role is to audit the efficiency of government operations, since unnecessary funds can be allocated elsewhere.

So, for example, when I worked in a government operated hospital, we were constantly pressured to reduce costs and increase productivity, and part of our job was coming up with creative solutions to do so. If our efficiencies reduced costs enough, our budget would be reduced and the funds could be used elsewhere.

I've worked in both public and private sector. I didn't see any difference when it came to getting pressure to reduce costs, improve productivity.

Although, I did see a difference in the definition of efficiency. Private organizations want to withhold as much value from the end customer as possible. Public organizations want to deliver as much value to the end customer as possible.

 

[pgwenthold]

In business, inefficiency lowers shareholder return and the long-term viability of the concern. Not all businesses are perfectly efficient, of course, but that's still an incentive to be more efficient. What is government's incentive to be more efficient?

Because it lowers the taxes for everyone. Including the people in government. They pay taxes, too. And if they waste money, they lose their job.

"The government" is "we the people." What is thexpected incentive for "we the people" to be more efficient?

 

[blutoski]

ETA: a nonfiction book on this topic, from my 'MBA years' is Janice Gross Stein's [The Cult of Efficiency].

Overall, government departments/organizational units are more efficient than a for-profit organization of identical size, if the assumption is the mandate of converting the input resources (eg: revenues) into value for the end user.