My Company, ‘Tis Of Thee

At an event in Florida this morning, the day after giving his nomination acceptance speech at the RNC, Mitt Romney referred to his background as a corporate raider to convince voters that he was better suited to the job of Chief Executive of the United States.

“Paul Ryan and I understand how the economy works, we understand how Washington works, we will reach across the aisle and find good people who like us, want to make sure this company deals with its challenges. We’ll get America on track again.”

Time and again, during the primaries and into the summer, Romney’s campaign have touted his success as a businessperson as a unique qualifier in his run at the Presidency. While fighting to hide the fact that his involvement with Bain Capital went on deep into the the last decade, Romney and his surrogates have repeated that only a man with his background can ‘turn the country around’ and start creating jobs.

Here in North Dakota, Rick Berg’s campaign has done much the same thing. Recent radio ads highlight his success as a “small business owner”. This would seem to make the assumption that “small business” can produce wealth in the millions for the owner.

The Corporate Logic Problem

Often, when speaking to people about the 2012 election and their support of the Republican ticket, the primary reason espoused is Romney’s business experience and, by association, his ability to run the country like he ran his corporation.  There are fundamental flaws in that logic, however.

Ignoring all the fancy economic theories (Keynesian, supply side, trickled-down), the primary goal of a Chief Executive within a corporate body is to maximize revenue while minimizing costs. In the case of the governmental structure, revenue is equivalent to the tax base while costs are the programs the government provides.

1. Profit and Loss

A CEO in charge of the nation would want to naturally maximize the incoming taxes to increase the revenue. In fact, the lack of tax revenue from tax breaks for the wealthy, and in the form of incentives and subsidies to large corporations, have been one of the largest contributing factors to the current U.S. budget deficit. Additionally, corporations use of loopholes and tax havens have taken massive sums of cash out of the tax revenue stream.

Many non-partisan respected economists have said that we don’t have a deficit or spending problem, but rather a revenue problem. We’re simply not collecting enough of the tax income that we are owed.

As American Federation of State, County and Municipal Employees (AFSCME) Union President Gerald W. McEntee pointed out, “it’s a revenue problem, not a spending problem“.

The American Prospect magazine, in the article titled Washington, We Have a Revenue Problemhypothesized that, while our taxes are at a 60-year low, our spending needs are at an all time high and will continue to grow. With the increasing number of elderly Baby Boomers who will have a need for social services, and other factors, our inability to collect the full taxes already owed will continue to cause problems. Cutting spending at a Federal level will only transfer the fiscal responsibility to the states – who are already in trouble and cutting services themselves.

2. Cost versus Benefit

In the corporate world, the costs incurred by a company include the materials and manpower required to produce a product or service. The natural inclination of corporate management is to reduce those costs, thereby increasing the profit of the revenue stream. Revenue minus costs equal profit. It’s the very simple core of corporate economics, and profitability is the measure of a good corporation.

In government, spending on programs is one of the primary objectives and maximizing those programs, to the benefit of society in general, is largely the function of government spending. As opposed to a corporate entity, a government should strive to maximize the number of beneficial program spending while maximizing the tax base to a zero budget strategy. In other words, the government should take in just enough taxes to fund all the programs it needs to provide to protect the health, safety and well-being of the population.

In this way a government is a non-profit agency and should strive for a balanced budget without the need for cutting programs that are needed by society.

The dirty little secret about Federal spending cuts, as proposed by the Republicans fall into two categories: Cuts to programs which the GOP opposes and cuts to programs where GOP donors will benefit. In most cases the spending that the GOP oppose are to programs where the Republican base have a religious objection to the programs central activity. These cuts are proposed simply to make the largely Evangelical Christian base of the GOP happy.

The second, more insidious spending cuts are to programs where the Republican donors could make a profit. Health care is a prime example. Even if the government can provide a program at a lower cost, and at a greater benefit to the public, the Republicans would rather their financiers get the profits instead. Thus the decades-old push to privatize everything from Social Security investing to the military functions now being performed by private contractors.

The GOP aren’t opposed to government spending, as long as they make a profit from it.

We need a leader, not a CEO

When Barack Obama was inaugurated as our 44th President, the country looked to him to lead us from a dark period in our nation’s history. The legacy of the Bush administration is  2 unfunded wars (one of which was unnecessary), mounting debt caused by those wars and other unfunded spending programs, and huge tax-cuts that only benefited the very wealthy.

Mr. Obama was met by a Republican-led House of Representatives who made it their top priority to defeat him in the 2012 election. At a time when serious solutions were desperately needed, the GOP leadership chose instead to fight progress every step of the way. Obama’s  landmark Health Care law was gutted from it’s original proposed form to include hundreds of Republican concessions – and in the end not a single Republican voted for the bill.

Mr. Obama has proven that he is able to lead, with several huge successes in spite of constant GOP opposition. Mr. Romney has only proven that he’s willing to do whatever it takes to gain the presidency. Mr. Obama is a leader, while Mr. Romney is a grifter.

A sure sign of Mr. Romney’s intent is the people that he has brought in to his campaign and who would eventually form his cabinet. His team is full former-Bush appointees and advisors – the very same group who drove us off the economic cliff in just 8 years. They own this national debt – their policies gave it to us – and now they want us to turn over the controls to them again.

The United States of America is not a corporation and the last thing we need is a corporate raider sitting in the Oval Office.