The recent primary wins of Carly Fiorina and Meg Whitman are giving us a familiar narrative: former corporate CEOs, fists pumping the air, talking about how they will correct the course of the foundering ships of state using boardroom tactics. Budgets will be slashed and deficits slayed. Profitability will be restored, peace will reign and all will be right with the world. Unfortunately, one of the most potent weapons of the corporate CEO is unavailable to the average senator or governor—layoffs.
When Carly Fiorina was ousted at HP, her successor, Mark Hurd, immediately started laying off people as part of the restructuring. He was only following in Fiorina’s footsteps; she also cut thousands of jobs while at HP. As a board member of eBay, Meg Whitman approved massive layoffs for the company. And Wall Street, which adores a robust round of layoffs, always responds with a big thumbs up and a rising share price.
Much has already been written about layoffs and the devastating effect job loss has recently had on America. But lost in the narrative is the simple fact that this time honored tool of corporate CEOs everywhere is useless to an elected official. Of course, elected officials can do layoffs to trim budgets and save money. Whitman is on record as saying that if she is elected governor, she will want to cut jobs. Cut spending, eliminating jobs, doing more with less—this is all familiar and comforting territory for Those Who Would Run Government Like a Business. It works—just looks at their former corporate paychecks, Wall Street accolades and rising share prices.
There, is of course, one major flaw in the business plan. When Whitman or Fiorina laid off employees at eBay or HP, those employees became (to channel Douglas Adams) a SEP—Somebody Else’s Problem. And that Somebody was the government. Carly, Meg and the others Who Would Run Government Like a Business don’t seem to grasp the fact that you can’t lay off a citizen. You can’t make them pack their things in a box and have a guard escort them off the property to Canada. You can only restructure a citizen from the Department of Employed Citizens to the Department of Unemployed Citizens. Try as you might, you can’t deactivate their passport and bar them from the country.
Meg or Carly or anyone else Who Would Run the Government Like a Business can lay off all the government employees they want, get rid of the IRS or the Department of Education, and slash entitlement programs, but the people who staff these organizations or depend on these programs will still be on the payroll somehow—be it through drawing unemployment, Medicaid and food stamps, or hanging around on the street asking strangers for food or change. There are plenty of sobering images from the Great Depression showing what a country that cuts all obligations to its citizens the way a corporation cuts all obligations to its employees looks like.
Government, it should be clear, is not a business. Meg, Carly and anyone else Who Would Run Government Like a Business may think they are displaying a steely-eyed economic savvy that will reap huge profits and Wall Street adoration. But all that really tells us is that they don’t understand that both the bottom line and the bread line will be their problems to solve and that they are forever linked.
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David McClain
Jaime Franchi
icyhighs
jlsathre
Tenderfoot Homestead
john guzlowski
Salon.com
Comments
If Republicans have good business minds...why is their most obvious talent creating massive debt?
What I think is the main difference is his pragmatic approach to certain things -- at some point there are hard choices to make and they can't be deferred by selling bonds or raising taxes.
I am also a partner in a very small business so have the 'luxury' of trying to make payroll -- needless to say the past couple of years has been extra challenging. Definitely, everyone who is suffering through our recession is under a lot of stress, but as a business owner, we've all had to make incredible decisions about paycuts, dropping health insurance -- all in order to avoid layoffs. It's excruciating to fire your workers.
I don't think it would hurt for our career politicians to have had to actually make payroll at some point in their lives - it might make them more sensitive and have some ownership and accountability for their decisions.
And it is inevitable that there will be massive layoffs of government employees at state, municipal and federal levels. The reason is that the current fiscal situation is unsustainable. You can only maintain the current situation for so long before you are confronted by reality. Its only a matter of time.
And please don't compare to the Great Depression. During the Great Depression government was less than 10 percent of total GDP so it was easy to increase taxes and increase expenditures. Now government expenditures are 40% of GDP. Things are very different and the prescriptions of the past no longer apply.
I disagree. I think she ran it extremely well. And the following article (not written by me) summarizes why:
http://blog.openitstrategies.com/2010/02/carly-reconsidered-ii-i-was-wrong.html
With the number of employees that the state of CA has on it's payroll there will always be someone who quits, gets fired for something, retires, or even dies. So there is always someone leaving.
Now you want to say close department X that has 100 employees. You draft a letter saying here are 100 open spots you can get into, pick which one you want. Then the employee has a choice. If he likes working for the state he takes a new job. If he would rather be unemployed that have a new job, he quits.
If he quits he still doesn't become a drain on the state as he will not get unemployment benefits because he left the employ of the state by choice.
Yes, business people can lead a state government.
The post 1960s-government has always been the caretaker of last resort, when everybody else abandons a person. Who will care for the sick, the elderly, the unemployed, if the government won't and there is nobody else? Will society let them sit in the streets and beg? Or die and rot in the gutter, then buried in a pauper's grave?
In other words - we will become a Third World nation. No First World nation in the world lets their poor and elderly die of want. Only Third World kleptocracies let their poor rot in favelas well their plutocrats drink champagne in guarded villas.
Perhaps that is what Fiorina and Whitman envision for California. That's one way to stop illegal immigration - make the United States as brutal to its poor as the countries south of the border. Tell me when the first photos of one of them smoking a cigar turn up.
I'd rather have a leader who has had to face the impartial assessment of the market than merely triangulate interest groups and manipulate public opinion.
It's like a Formula one driver imagining that they can automatically do brain surgery. Completely different skill-sets.
Academian pace and concern for peer-review, aren't much better.
The fact is that this country was designed to be run by amateurs!
"Professional" experience is counter-intuitively counter-productive.
We need more carpenters, truckers, and bar-tenders in higher office and fewer lawyers!
So who do you think did it before the 1960's? Were they dying in the streets? I don't remember seeing any. In fact after the after the ACLU and the judges rules that people who are mentally ill, but not a danger to themselves or others, can't be kept in hospitals and have to be discharged did large numbers turn up on the city streets. It is not the governments job to take care of you womb to tomb.
A CEO is a leader. That is what we need. They make the hard choices and do what is right and what they need to do. Those who have spent their whole life holding political office are normally so ingrained with get along and let's make a deal that they forget that need to just do what needs to be done and forget about what the administration looks like in the press.