The Practical Philosopher's Blog

Using the practical application of timeless wisdom to address modern issues

More Proof Why Government Can’t Run Businesses

Once again, it’s painfully evident to everyone except the Obama administration that the realities of politics and the realities of running a business are completely different and virtually always are. 

The motivators of politicians (vs. leaders) are votes, public perception, and the pursuit of power. The motivator of businesses is profit from the sale of their goods and/or services to the marketplace.  The restructuring of a rigid, non-responsive and failing company so it can more efficiently serve it’s market is critical if that company wants to survive. So, it was amazing to read:

GM proposed moving out if it’s Detroit’s Renaissance Center HQ to its sprawling suburban tech center, arguing that the move would save money and would symbolize a commitment by top brass to be more involved in the company.

But this would involve some creative destruction in the marketplace to create a sustainable, long-term outcome of a viable company instead of a dying one. This, however, was not a consideration at all to the politicians in the white house:

But the “hands-off” White House snuffed the idea, opting to protect Detroit — a key political constituency of the Democratic Party. “Are you out of your mind?” Rattner quoted Brian Deese, who has been heavily involved in auto policy, as saying. “Think what it would do to Detroit.”

This is why Govt can’t and should not try to run businesses or be an actor in the market place. This is why, if GM ever recovers, it will take much longer than it would have in a free-market situation.

And the White House wonder’s why they have not been successful in creating jobs?

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Filed under: Business, Economy, Politics, , , , , , ,

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