Government Unable to Effectively Provide Services; Yet They Keep Lying About it

Oct
22

By Charles Biderman

 

A key belief of mine is that inherent in the nature of government is that governments are not capable of effectively providing services. And by effectively, I mean in terms of dollars and hours. Yet, the biggest of the Big Lies, and one apparently believed by most Americans, is that government can effectively provide services.

 

The reason I know most Americans believe the Big Lie that government can effectively provide services is that Americans elected Barack Obama president twice. I also have no doubt that Mr. Obama believes that government can effectively provide services, and in particular health care.

 

However, reality is that governments are not capable of getting anything done cost effectively. Not only are governments not capable of getting something done by themselves, government is also not capable of effectively hiring others – look at how private prisons work as an example of something not working well.

 

When I was in Air Force in the 1960’s a truism of the time was that whenever the government did anything big or small, such as a fighting the war or assigning jobs, it ended up FUBAR. FUBAR, is F_ Up Beyond All Repair. How much do you want to bet that the whole Obamacare sign up system is FUBAR? Today’s Wall Street Journal says the outside cost for creating the sign up system has already doubled from $100 million to $200 million.

 

I’ll bet that the ultimate cost of creating the sign up system will be over $1 billion and take at least another two years. Unfortunately the government will Lie again and again and pointing the blame finger at anyone but themselves. All part of The Big Lie.

 

Ever wonder why there is no government agency checking on the cost effectiveness of government services? I do. Simple, the government will not allow it. Why cut their own throats if they can just lie about their results?

 

To get back to the key question as to why governments are inherently not capable of getting anything done cost effectively? Two answers: First, if you cannot fire employeesfor misfeasance or malfeasance, I say you have no right to expect that employee to actually do their job. Misfeasance and malfeasance are fancy words that mean not doing what you are supposed to either because you are incompetent or even worse, knowing better and still not doing the job.

 

Inherent in all the union and government employment agreements, it is almost impossible to fire a government worker. And yes, many if not most government workers in fact do their jobs effectively. But there are a huge number of government workers who do very little other then cashing their paychecks and also build up huge pension benefits.

 

Second reason governments are ineffective is that the top guys only care about getting re-elected or reappointed. Pointing the finger at someone else has been more effective at getting reelected then in actually doing something. So if the top guys are not managed based upon their results in providing services cost effectively, we have no right to expect them to do that.

 

That’s right both bosses and employees of our government have no incentive to do their jobs cost effectively. Yet the government keeps lying and telling us it is the fault of everyone but the government as to why nothing gets done.

 

The biggest of the big government lies is that the reason the government can’t get anything done is that more government is needed. Every Obama speech on the economy includes we need more government to fix our problems.

 

The Big Lie.

 

 

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4 Responses to Government Unable to Effectively Provide Services; Yet They Keep Lying About it

  1. Michael Peterson on October 22, 2013 at 11:42 pm

    Speaking of inefficiency, what is your feeling about how much the federal reserve can exspaned its balance sheet before it gets very dangerous. Also, should this printing of money be added to the national dept.

  2. Herbert Hedgpeth on October 24, 2013 at 6:07 pm

    I was about to rebut your argument. I worked for the FAA in the early 60′s, maintaining ARTCC RADAR equipment. I thought we did a cost effective job. Then I got to thinking about the FAA’s inability to plan ahead for future needs. That problem exists to this day. One more nail in the coffin.

    Herb

    • Ed_B on October 28, 2013 at 6:12 pm

      Herb… I can relate to your thoughts on this. Both of my parents worked for the State of Oregon when I was growing up. They were frustrated beyond measure by inefficiency and incompetence in their different organizations. On more than one occasion, they discovered ways to provide better services at lower cost to the tax-payers but this was squashed because those in charge did not want their budgets to shrink… ever… for ANY reason, even if that reason was a substantial improvement in efficiency.

      Worst of all was the same type of argument handed down by a federal gov, that would require the state to do something in a way that was clearly inefficient and that should be replaced by something that was obviously better. But, could they do this? No, of course not. Not without studying it to death, probably in studies done by various congressional buddies and / or relatives first. That was drain millions of dollars from the state treasury for no reason whatsoever.

      When there is an obviously superior method of accomplishing a goal, EVERYONE BUT GOVERNMENT just does it.

      Once we get past the need for national defense, good roads and bridges, law enforcement, fire protection, and ambulance services, we are pretty much done with what the government can and should do. In spite of this obvious fact, government grows ever larger as our economy shrinks and fewer jobs are available. Is there a connection? Yes, there is. Resources are a finite quantity, yet government expands as if there was no limit on its growth. It can and will consume any nation that allows it to do so. We should be choosing to grow the productive economy, yet we have chosen to grow non-productive government instead. This is not how wealth is created, for government creates no wealth: it merely redistributes the wealth that others have created… and often badly.

  3. Ed_B on October 28, 2013 at 6:32 pm

    Yes, those in government have discovered that they can make quite a career out of pretending that things are much better than they really are. This also makes them and their policies look better than they are. We see this from the Fed, even though it is not a government entity, which is heavily influenced by the Fed Gov. They continue to report and support the lie that inflation in the US is 1.5%. They do this by manipulating the way in which inflation is measured. If beef prices rise too much, they merely substitute cheaper chicken and… Shazam! Inflation is reduced. They do this in many ways. While this leads to a low number for inflation, it does not describe the current reality in the US.

    By using the Fed Gov’s own measuring techniques prior to 1990, John Williams at http://www.shadowstats.com measures inflation at about 9.5%. Those of us who buy gasoline, groceries, heat our homes, pay tuition, buy insurance, and pay taxes are WELL aware that inflation is not anywhere near 2%, regardless of what the Fed or the US Gov say. Our own shopping and living experiences confirm that Williams is correct in his measurement. He is correct because he uses a real world measuring technique, rather than one that is politically massaged to give “good numbers” rather than report the reality of our situation.

    The US Gov is no better in this. The BLS reports that we have 7.2% unemployment because they simply stop counting people who are long-term unemployed. My, how convenient is that? The number of these people is not small. In fact, they seem to be about the same in number as the short-term unemployed. When added together, we get an unemployment rate of about 15%. By adding in people who are under-employed for their skill set, education, and training as well as those who want full-time work but can only find part-time work, this number approaches 24%. This is within a sniff of the 25% unemployment rate during The Great Depression of the 1930s. No, we have no bread lines or soup kitchens on a scale of the 1930s but thanks to EBT and SNAP, they are not necessary. As long as government is around to pick the pockets of the productive, those who are chronically unemployed or employed at minimum wages will not starve or be tossed out into the cold. Should this system ever come unraveled, as it nearly did during the recent so-called government shutdown, however, all Hell can and will break loose, particularly in the largest US cities.

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Charles BidermanCharles Biderman is the Chairman of TrimTabs Investment Research and Portfolio Manager of the TrimTabs Float Shrink ETF (TTFS)

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