If Only We Spent Money Like Enron….

I try to keep an open mind about political things.  I usually start with the assumption that those who contribute to the marketplace of ideas do so in a good faith effort to improve the world around them.  So when people speak, I try to listen.  I’m still a law student, so I don’t have time to receive everything–but really do give it a college try. 

An old friend introduced me the Mises Institute some five or six years ago.  It’s the motherlode of Libertarian ideas, and it’s probably done more to shape my moral and political thinking than any other single media outlet.  I’ve spent long hours imbibing Mises Media podcasts while employed at my local stable, cleaning the poo from horse stalls.  This is how I’ve come to understand the principles of liberty, non-agression, free trade, and sound money.

I try to listen to other points of view—especially from the liberal, anti-capitalist, independent media—in the hopes that one day, someone will explain the welfare state in such a way as to spark an epiphany.  “a Ha!” I’d like to say. “At last, someone has made more sense than the scholars at the Mises Institute–or the Cato Institute–or the Libertarian Party!  Now I see why we need the government to confiscate and redistribute our property! To centralize our monetary system!  To wage imperial wars!  etc., etc…” I wait and I wait for that epiphany to burst—and I’m always disappointed.

Attacks on “free market” and “private enterprise” usually take one of two forms.  In my last blog, Scapegoating “Free-Trade”, I gave an example of how “free-trade” is often condemned because it is misidentified, and the underlying cause of the problem du jour goes underemphasized.  Today I highlight the other form:  Politicians are often unjustly presumed to be more virtuous than ordinary, private citizens. Consider this recent episode of the Bill Moyers Journal:

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OK, well, first I’d like to say that I’ve always admired Bill Moyers, especially when he gets on his tears about the failures of the mainstream media. –But this particular episode, as far as my limited mind can discern, is a fun-house of non sequiturs.

The main idea, I think, is either that the government should not act like a business, or that it should not do business with businesses–or something like that about avoiding “business” and the “business-like”.  Whatever the main idea is, there doesn’t seem to be too many kind words about businesses here.  Moyers hits the ground running with this scathing introduction:

“The problem,” [Wall Street Journal columnist Tom Frank] says, “is a conception of the state as a business in which every public function is for sale.”  He says, “the rot is structural, trans-partisan, and it stinks to high heaven. When President George W. Bush announced that government should be ‘market-based,'” writes Tomas Frank, “he was merely applying an ideological gloss to this ancient and supremely bad idea.”

Moyers was quoting this Wall Street Journal editorial, in which Thomas Frank blasts Illinois governor Rod Blagojevich for allegedly soliciting bribes in exchange for President-elect Barack Obama’s vacant senate seat.  Moyers then seizes upon this instance of pure government corruption to suggest that the government should not turn “one government service after another … over to private business for a profit.”  Note the complete non sequitur: Rod Blagojevich’s self-contained official corruption has no bearing whatever on whether the government should or should not contract with outside private businesses.

And so we embark upon another edition of Exposé, primed to accept that dealing with private businesses is a scheme so innately “rotten” that it “stinks to high heaven.”

Come to 6:10, where Seattle Post-Intelligencer reporter Eric Nadler imparts unto us this odd wisdom:

In the Bush administration you have a wish to turn over to private industry the business of government. In turning over the business of government to private industry, to release them from oversight. There is a lot of logic behind the idea. One of the logics is that, if only government were to operate like private industry, then government would be a more efficient operation. But if you think about it, what if they spent money like the executives of Lehman Brothers and Enron? Do we really want our governments operating like that?

Whenever I hear a thing like this I go back to my roots.  I think: “What would Thomas E. Woods, Jr. say?  What would Walter Block say?  What would Murray Rothbard say?”  All too often, the answer is obvious.

So Mr. Nadler doesn’t think our government spends money like Enron?  Did he miss this? –esp. little §122, where Congress raises the ceiling on the public debt to $11,315,000,000,000?  Does he know that this is the seventh time Congress raised the debt ceiling since President G. W. Bush took office in 2000? (The other six times being Pub.L. 107-199, Pub.L. 108-24, Pub.L. 108-415, Pub.L. 109-182, Pub.L. 110-91, and Pub.L. 110-289, § 3083, but who’s counting?)  Did Enron’s bottom line ever look anything like that?  I honestly don’t know.  Somebody clue me in.

Did Mr. Nadler miss this, too?  The damn national debt clock doesn’t even have room for the dollar sign any more:

What about former Comptroller General David M. Walker’s futile plea for fiscal responsibility on the part of our Government?

If only we spent money like Enron!

So this is Eric Nadler’s logic: First, pick the worst of the worst offenders in the private sector you can think of.  Then blithely and illegitimately presume that your elected officials in government must be more responsible than these offenders. Ergo, the government should not “turn over to private industry the business of government.”  Get it?

With all due respect, I remain unconvinced.  Here, Mr. Nadler demonstrates the fallacy of presuming his elected officials are more responsible and virtuous than private citizens.  At no point in the presentation does Mr. Nadler consider a responsible business model worthy of emulation, and no one ever challenges Mr. Nadler’s choice of Enron to represent the typical market participant.  Mr. Nadler doesn’t even carry his burden of demonstrating that Congress is more responsible than even Enron.  He just states it—and we’re all expected to take judicial notice.

Of course it’s impossible to say how much of this illusion Mr. Nadler believes and how much of it is the handiwork of PBS editors….

…And just what is this “business of government”, anyway?  The unspoken assumption throughout the piece appears to be that it is the “business of government” to build houses for Air Force personnel.  Is that true?  In that case, is it also the “business of government” to build houses for all of it’s employees?  Is it the “business of government” to build everyone’s houses?  No, No…  That’s not the business of government.  Or is it?

Suppose the government wants to sign a contract with private home builder.  With what pen shall it sign?  Is it the “business of government” to produce that pen, or is it legitimate to “turn government pen production over” to a private enterprise like Newell Rubbermaid, with its Paper♥Mate® line of pens?  Maybe it’s the “business of government” to produce only those pens intended for use by the Air Force, no?  Or is it the “business of government” to produce all pens?  No, No…  That’s not the “business of government.”  Or is it?

So what is this “business of government” that should not be “turned over to private business for a profit”?  Well, nobody bothers to say.  We are simply expected to join in the assumption that it is the “business of government” to build houses for Air Force personnel, and that this business should not be “turned over to private industry”.

I decline to join in that assumption.

Now of course it follows that American Eagle, the private contractors hired to build homes for the Air Force, fouled up the job big time.  Elementary!  Had the contractors done a good job, there would have been no complaining, and there would have been no story—as is what happens innumerable times every day across our Great Land.  But as soon as there is a problem—ugh!  Devil the private industry!

And so for the next twelve minutes, we endure the parade of horribles that the American Eagle company unleashed on dozens of honest, unsuspecting people over the years.  This goes on until 18:04, when Arkansas Senator Mark Pryor finally admits that “the Air Force actually bears some of the responsibility here. … There were some red flags there. … If the Air Force was doing its due diligence, you wouldn’t have had this problem in the first place.”


The argument from my prior blog returns to haunt us:  So the United States Military hires a troupe of incompetent, politically connected bozos and thieves to do “its” work, and somehow “private industry” ends up on the hook for the ensuing chaos?  These are not the workings of the “free market”, trust me.  If the government wasn’t paying American Eagle handsomely to breach its contracts, perhaps it would have folded long ago and ceased to blight the “free market” with its indolence.

Fortunately, Bill Moyers provides an uplifting “postscript” to this sordid affair:

“[T]he company that bought out American Eagle’s contract is working hard to get those military families into new houses as soon as possible.”

Oh good. You know, that’s really great. The company is so humble, too; surely they have requested to remain anonymous.  Otherwise, Mr. Moyers would have identified them so that we might properly recognize thier efforts.  I know we were all hoping that the government would do its own “business,” but maybe there is room for a little private industry afterall.  Who knows?  If they do a good job the Mises Institute might write a whole daily article about it!

2 Responses to If Only We Spent Money Like Enron….

  1. Nik Varrone says:

    I think that private groups are really good for getting government jobs done.

    1 – Unlike government departments private contractors can be fired and new contractors can be hired. This can be done without a major public outcry on firing government employees whose jobs are somehow seen as more sacrosanct because all they do is take care of the government.

    2 – While contractors can be chosen for political reasons it’s not necessarily so. Procedures can be, and should already be, created so that contractors can chosen based on their ability to complete the task

    3 – Contractors can be under contract and like politicians can be replaced by the public when necessary.

    4 – Government departments are not necessarily supported by the official documents that create those governments.

    All in all I feel that some “privatization” can result in improvements in democracy. A government that can be more reactive to the people and be more modern in general is certainly one that is better than a sluggish outdated bureaucracy.

  2. […] immediately resorts to the second fallacy:  He presumes that public economic regulators will always be less evil and vicious than private […]

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