08.24
I agree with Matt Welch. It’s been pretty funny watching all the pro-big government media liberals trying desperately to downplay what is now a clear, undisputable fact, that the American population has rejected any kind of healthcare reform that gives government a greater role. And the reason couldn’t be more clear. People instinctively know that it can’t work. I’m not saying that it won’t work. I’m saying that it can’t work. The failure of government run healthcare isn’t just probable, it’s necessary. It will fail. And people know it. And what’s funny is that this anti-government fuel is coming from the government itself. They are unwittingly feeding their own opponents and making new opposition converts daily.
The Cash for Clunkers program was perhaps the greatest wakeup call that Americans needed at this moment. It showed clearly that government can’t run even the most basic of programs. Think about the simplicity of this program for a moment. It’s four steps:
- Trade in your car and get a $4500 discount on the new one you buy.
- Dealer fills out the rebate paperwork and kills the old car.
- Dealer submits the paperwork to the Department of Transportation.
- Department of Transportation mails the dealer a check for $4500.
Any private business could handle that program with their eyes closed. They do it every day. Mail in rebates follow exactly this type of scenario. Take a typical HP printer trade-up program for example. I’ve taken advantage of this at our business before to upgrade an out-dated printer. You buy the printer and submit the paperwork for the old one you are trading in. Once they get your paperwork and validate that the old printer qualifies, they will send you shipping details. You ship the printer back to them and they send you a rebate check. The whole thing takes about 4-6 weeks and is totally automated through the web. The Cash for Clunkers program is even decidedly easier than that though. There is no shipping involved that is dependent on the consumer. The whole thing could be automated easily. But no. The government simply can’t run this type of thing efficiently. The question is why? Why can’t the government run such a simple program?
The answer to this question is that the government has three things that always work against it in any endeavor. First, it lacks basic market knowledge because government doesn’t have competitors. They run monopolies in everything they do. Tell me who the competitor is to the Department of Transportation. Of course, there isn’t one. If you have to stand in line for 2 hours just to renew your drivers license, can you just walk out and go to a different licensing company? No. Everything the DOT does is monopolistic by law. They are, therefore insulated from standard market knowledge on everything related to customer service, product pricing, staff size, etc. It’s no surprise then, that they thought they were woefully understaffed to handle the paperwork for Cash for Clunkers.
Secondly, government workers are not incentivized and never will be. Their pay is not based on performance, because there is no performance metric to measure by. That’s why I said above that they “thought” they didn’t have enough staff to handle the CFC paperwork. Government staff, especially in Washington, is not rewarded on performance. Their bugdet goes up regardless of whether they do a good job or not. In fact, usually the worse they perform, the more their budget increases. Just look at the school system. And, since all government activities are by definition monopolies, there is no way to judge performance by market share. There is also no profit to judge by. Government programs always lose money because they don’t sell a product. Even when they do sell a product with something like Amtrak or Fannie Mae, it’s always a profitless venture. The fact is, when there is no need for making a profit, no profit will be made. Obama said as much himself in what was perhaps the blunder of the decade by comparing the proposed public option to the U.S. Post Office:
The obvious gaff here is that he pretty much admitted that the private sector always runs rings around government programs. But, there was a more subtle point that seemed to be missed by the pundits at large. The point he thought he was making was that the presence of the government in the shipping market has not put FedEx and UPS out of business. If that’s the case, why is the Post Office still in business at all? Simple. They don’t have to make a profit to stay in business because their owners can print money, and FedEx and UPS are not true competitors. Since when does anyone send mail through FedEx and UPS? You can’t. The Post Office has a monopoly on parcel mail. FedEx and UPS are shipping companies, not mail companies. If FedEx and UPS were allowed to do mail delivery they would put the post office out of business in a month. So what he’s really saying in that bite is that the public option will only survive as a monopoly. And everybody knows this instinctively.
The final reason that government programs always fail is corruption. Again, look at the Cash for Clunkers program. Obama and congress set up the program well in advance by taking over Chrysler and GM and then shutting down tons of non-Democrat contributor owned dealers around the country. They basically created a car dealer constituency that they could then pump money into with this government program, knowing that the money they brought into these dealers would come back to them in the form of campaign contributions. This is a time tested political strategy, but it’s rarely seen on this scale. Essentially, it’s laundering tax payer money through the private sector to get it back into the campaign coffers without it looking too fishy. But it’s so obvious it hurts. I’m starting to think these political “geniuses” in the White House could learn a thing or two from Bill Clinton. He makes them look like a bunch of chumps.
