The Myth That Government Cannot Do Things Correctly

[erpowers]

There is a myth in this country that private industry does everything better than the government. This myth needs to be debunked. I wish the media would discuss this myth more. Each time people mention the idea of government doing something there is another group of people that claim the government always messes up the things it tries to do. We see this playing out in the Healthcare reform debate. Many people stand up and make the statement government performs its jobs poorly or at least poorer than the private industry. However, from what I have read the opposite is actually true; private industry does a worse job of performing tasks than the government. On many occasions the government does things in a more efficient and cheaper manner. A number of individuals who have studied the issue have pointed out that government was able to do a better job of handling multiple tasks. Both Kevin Phillips in Bad Money and David Cay Johnson in Free Lunch give examples of how government performed tasks better than the private industry. Lets take a look at a few examples in which government has done a better job of handling tasks than the private industry.

One of the biggest examples is Medicare. Multiple people claim that Medicare is run in a much more efficient manner than private industry. Another example is the fact that military personnel were able to do a better job of supporting troops at a cheaper rate than Halliburton and KBR. In an article entitled Victors and Spoils published November 19, 2002 Paul Krugman wrote, “After all, there’s a lot of experience with privatization by governments at all levels…that record doesn’t support extravagant claims about improved efficiency. Sometimes there are significant costs reductions, but all too often the promised savings turn out to be a mirage.” Finally another major example of government doing a better job than private industry is deregulation of energy markets. When supporters of deregulation pushed the idea they claimed it would lower costs to consumers. Now years after deregulation it is clear that costs have actually increased. In addition, in areas where deregulation has not taken place the residents with publicly run utilities pay a lower rate than individuals who have privately run utilities.

[Carl Skan]

1. Just like everything there are no absolutes

You can't say the government does everything wrong and you can't say the government does everything better than private industry. There are certain roles in which one or the other are a better fit to provide a service.

Unfortunately, that doesn't make as good a sound byte as "the postal service is broke, social security is going broke, blah blah blah".

[BlooInBloo]

2. There are a zillion examples. The public university option is another good one.

[RC]

3. It is the repugs that are used to bu$h's ways that think government can't do anything better.

[notesdev]

4. Good luck with that

Cash for Clunkers is proving the myth, if there were not enough choices.

Oh, and hey, a program which is tens of trillions in the red when accounted for using net present value (the accounting method the government requires of private plans) is probably not your best example of government doing something right.

What government does well is conduct war. It smashes and destroys things, and it's good at that. Which makes sense, because ultimately government is force.

In terms of OUR (federal) government, these guys don't even have it together enough to read the legislation they expect the rest of us to live by. Behaving like that, the government can't do things correctly, when it doesn't even know what it itself is doing!


edit: sorry, the government is ALSO good at taking money from your family and giving it to their campaign contributors, especially those in the banking sector. I gotta be fair here.

[jwirr]

5. This myth was the biggest pr success of the Reagan administration.

He and preachers like Jerry Falwell, Pat Buchanan, the Bakers and corporate interests pulled together to fashion this lie and sold it to the people mainly in the south via the racial divide. They invented the welfare queens and blamed the intercity black people for using the system until they had a big enough following and then the pushed it to the national level.

Just as an aside, we had a minister who came to our church (he lied about his past) and that was one of his lines. What he did not know was that he was in one of the most Democratic counties in MN. Many of the workers in the offices he was castigating were in our church. So finally they found a way of getting rid of him when they found out that he had lied about his past association with Operation Rescue and his arrests. We fired him but not before the church lost many of its young people and me. They use lies to undermine the government and think they are doing something good. Worse than the blind leading the blind.

[Balbus]

6. That ain't no myth.

[LiberalFighter]

7. Government has more accountability too. While...

private industry in many cases will find ways to avoid accountability.

[AdHocSolver]

8. Corporations screw up all the time. They just have a greater ability to cover it up.

Several years ago, I worked for a bank. At the time I was hired, the bank hired a manager two or three levels up from the level of my group. (I worked as a programmer in a division of data processing.)

The first six months on the job, this banker cost the company at least a quarter of a million dollars through bad decision making. He went way over budget. Did the executives decide that they had made a bad choice in hiring him? Of course not.

This banker merely cancelled several projects begun as much as two years before by his predecessor and got rid of several programmers. (Some of the programmers were contractors. Staff programmers were transferred to other groups.) This caused an immediate drop in payroll, so his area of responsibility developed an immediate savings. Realistically, his killing the projects meant that all the money spent on them went down the drain. Total loss to the bank must have been at least three quarters of a million, maybe more.

How did the bank deal with him. If you guessed that management threw a party for him, and announced bonuses and a promotion for him for saving the bank lots of money, you would be correct.

If news got out that the bank had hired such a bumbling idiot, investors might decide to get rid of this bank's stock. Employees in our division knew the facts. Who would risk their jobs telling the world what had happened?

This is one example of how private industry ensures that the public believes that the private sector does a better job than the government. The private sector doesn't. It merely has better means of covering up its mistakes. The myth that, if a company can show a profit on its books, then it is doing things well, brings to mind a company called Enron.

I worked for corporations, hospitals, and academia and saw the same waste and fraud almost everywhere. The only difference is that nongovernmental groups can more easily hide it.