Is Our Government Incompetent?
Let's revisit this conversation
There are three primary takeaways here:
- The government that we elect is not as incompetent as we are led to believe
- Corporate ingenuity is not as great as we are led to believe and much of their wealth is due to government help and taxpayer dollars
- As taxpayers, we get little thanks for our research dollars but we do get totally screwed, in fact, our taxes have actually increased economic inequality
Our government is inefficient, incompetent, overbearing, over-regulating, over-sized, over-priced, and holding back American businesses and Americans. We hear this constantly. We hear it all over conservative media, we hear it on liberal media, we hear it from corporate-funded think tanks, we hear it from our co-workers, and we hear it from our drunk uncles on the back porch. We, our friends, our families, and our coworkers all say it almost as if we think it is our patriotic duty. Somehow we have learned to despise the greatest Democracy on the planet – we were taught to see it as some big lummox that is in the way of progress and corporate ingenuity. As usual, there is a lot more to the story than what you hear on the news or on the back porch.
Corporations have some big advantages when it comes to their appearance of superiority over the government. They can keep most of their dirt and incompetencies quiet while our Government has to deal with the news media that is camped out in government offices sniffing around and waiting to pounce on anything negative and rarely pointing out the positive. Corporations can focus solely on making money while our government has an astounding range of responsibilities from keeping everyone safe to keeping the country moving forward. At the same time, our government has to deal with lobbyists, bought politicians, and infiltrated agencies all pulling the government in countless directions, most of which are not helpful to us.
What if corporate America had to deal with the media camping out in the hallways or in the boardroom? Imagine if all the senior managers and worker bees were being paid by the competition for a favor that was against the interest of their company. Would corporate America be so “successful”? On top of all of that, corporations can spend as much time, money, and effort as needed to tell us all how bad our government is, but our government can’t say a bad word about Corporate America (unless it is harming us). The truth is that there are plenty of examples of large commercial organizations that can’t get out of their own way (and they are nowhere near as big as the US Government).
In reality, our government and corporations rely on each other heavily and this has played a big part in making corporate America successful – corporate America hardly became successful on its own. Now don’t go rolling your eyes on this; remember that you have been preconditioned (mostly by corporate propaganda) to think just the opposite. Certainly, our government gets in the way of some corporate “progress” by creating regulations that keep corporate America from polluting, poisoning, and stealing – but imagine a world where corporate America could do whatever it wanted. Our Government doesn’t prevent companies and industries from being successful, but through laws and regulations, it does try to keep them from making a profit at the expense of our health and prosperity and that of the planet.
There are some fundamental reasons why our government can and should drive the success of industry by providing them with some of the most significant research and technology development in this country – let’s take a look at a few of those reasons:
- Our government can take greater risks – they don’t need to worry about burning a hole in the budget as a business does. Our government has the resources to tackle issues that businesses can’t without taking the risk of going belly-up. The last thing venture capitalists (private entities that invest in companies and ideas) like to do is take risks, but they are more than happy to swoop in and invest in companies that are using government-developed and government-proven technology.
- Our government can spread out the research and development – they aren’t concerned with maintaining “proprietary information” or hiding their work from the competition. In fact, they often pull in contributors from multiple colleges and various businesses to get the job done (and to purposefully spread the knowledge of the underlying research – which can spawn additional areas of research). They also connect companies with investors and agencies that can help expedite research, development, and deployment. All of this leads to the actual creation and sharing of new knowledge that can be used by others.
- Our government can also spread out the timeline – If it takes longer to get something right, then it takes longer. There is less pressure to get something out the door fast, and more importantly, there is less pressure to shelve something important if its development is not going as planned.
- Our government can help dole out the results – corporate America is better at getting things to market and into the hands of people, but even here, corporations and industries often depend on the government to assist with production, teaming, and opening markets for new technologies. This includes assisting in opening up global markets for companies by interacting with other governments on their behalf.
- Our government looks well into the future and considers what will give us a stronger, more vibrant economy – it does not need to worry about showing ever-increasing profits every quarter to keep Wall Street happy. On the flip side, our government certainly keeps Wall Street happy by giving corporations all that free technology and research.
Without the investments of your tax dollars over the years, we would be in sad shape as a nation and corporate America would have much less to brag about. Taxpayers have provided many freebies for corporate America over the years, but have gotten little in return for their generosity. Here is a quick look at some government innovations and handouts that have created incredible wealth for much of corporate America and a handful of individuals.
The list of government-funded technology in our smartphones is long and it is reflective of the government thinking forward, doing the work, and sharing the new knowledge and technology. It also exposes the other side of the coin where companies take the tech and run. Anyway, here are your contributions to the iPhone…
The government didn’t invent the smartphone but they provided the majority of the technologies that made it much more than a phone. Without your taxpayer dollars, smartphones don’t exist. Maybe Apple is better at integrating and improving existing technology and not quite as good at innovating new technology. One thing that Apple has done exceptionally well however is to exploit democracy – they took all the work and ideas that we paid for and shipped the jobs overseas and they continue to take advantage of every “wealth-inspired” law they can to avoid paying taxes – and they are hardly the only ones. Those who could afford to own stocks did quite well over the years of course, but they aren’t the real investors in Apple. The real investors, those that funded all the high-risk, up-front research through their tax dollars, were everyday average Americans – but as usual, everyday average Americans got kicked in the nuts. The smartphone also greatly helps Twitter, Facebook, Amazon, and many other firms by giving them instant and continuous access to their customers/zombies.
The Wonder Boys are Plunder Boys
These companies almost expect us to kneel down before them, but much of their success was on our dime, and in return they have caused quite a bit of damage to America.
Apple isn’t the only high-tech company that has ridden Uncle Sam’s coattails. There are plenty of companies that have benefited directly from our government or from decades of previous government research – though it is rare that they admit it (or in some cases, even realize it).
Between PayPal, SpaceX, and Tesla, Elon Musk has been totally killin’ it. SpaceX and Tesla are especially cool because they actually build seriously cool boy toys. SpaceX is doing some neat stuff but it’s not like they figured out space travel on their own – NASA did the heavy lifting long ago. Many of us are led to believe that SpaceX is beating NASA in some sort of competition but the fact is that for decades now, NASA has been actively promoting, coordinating, and funding the private space flight industry. While one hell of a boy toy, the SpaceX rockets are a bit too expensive so you’ll have to settle for a Tesla car. Teslas aren’t that cheap either but the government helps out through subsidies in which we initially gave customers $7,500.00 in tax credits (the amount of the credit is designed to decrease as more cars are made). Tesla also benefits from past government research including battery research, GPS, touch screen, AI, materials, etc. All of this is good because it helps sales and that helps us get an innovative green company going. But that also means that all taxpayers are helping a small number of (at least slightly wealthy) individuals afford to buy the car which, in turn, helps the stock price go up making investors and esp Mr. Musk much more wealthy on our dime. Again, not necessarily bad, but it is yet another example of our money being moved dramatically to the wealthy.
Mark Zuckerburg doesn’t really make “things” – his Facebook website, totally reliant on government-funded technologies and infrastructure, simply connects a bunch of people – both good and very very bad people. He isn’t destroying Main Street by forcing shops to close but he is destroying Main Street by allowing misinformation and divisive rhetoric to flourish on his pages. The damage caused by the dark side of his website far outweighs the ability for me to see a pic of Aunt Terri’s latest batch of cupcakes. Facebook doesn’t add to society, it destroys society. It’s too bad Zuckerberg doesn’t put as much effort into stopping the dark side of Facebook as he puts into avoiding taxes. Let’s face it, the world is far better off without Facebook. By the way, most of the above applies to Twitter as well.
Google – Believe it or not, the famous google search engine that is used around the world was developed with taxpayers’ dollars. That search engine has made a lot of money for Google, and that is fine because they do a lot of cool research and development with all the money they make. Unfortunately, they also do a lot of research into how to hide money and avoid paying taxes – ingrates.
Jeff Bezos of Amazon is worth billions. As usual, those billions were made on the back of government-funded infrastructure, the airline industry, the internet, etc. To be fair, now that Amazon has a ton of money they are creating jobs by developing and making available quite a bit of technology and there’s also the fact that they create warehouse and shipping jobs. The downside of their business model is that it stifles the flow of money through communities as we point and click our money directly to them. This of course has contributed greatly to the destruction of jobs on Main Street. A fraction of local businesses can sell their products on Amazon and that gives them greater exposure, but it also means that they are subservient to a billion-dollar corporation and they or their margins can be squeezed out at Amazon’s will. Then there is the minor detail about Amazon’s significant contribution to climate change with all those oversized boxes and their shipping of individual items to homes around the world. What do we get in return? Amazon often pays zero taxes, in fact, they sometimes get millions in back from our government. Lastly, Amazon is also quite good at pitting cities against each other for hosting their distribution centers – forcing cities or states to give bigger and bigger tax incentives to land the deal.
A final point is that we all would be perfectly fine without any of these companies – in fact, it seems we were actually better off not too long ago – before any of them existed. These companies almost expect us to kneel down before them, but much of their success was on our dime, and in return, they have caused quite a bit of damage to America.
Perpetuating the good old boys club
…as it stands now we are continuing to pay a fortune for having our planet destroyed
We have been subsidizing Big Oil and fossil fuel for over a century and over the years we have gotten really quite good at it. According to the International Monetary Fund, in recent years Americans have spent more of our taxes on the fossil fuel industry than we have on our military budget – we’re talking $649 billion in 2015 – holy shit! This is not only the tax we pay at the pump, it is all the other stuff we do to help them get their oil out of the ground, transport it, clean up their messes, deal with healthcare issues caused by its pollution, etc. There is no specific budget to cover all these costs, the money comes from all over our government. The numbers are actually worse since the money we spend to protect the oil comes from our military budget. So what this really means is that the price at the pump is a lie – if we paid these costs all up front at the pump then we would be much more supportive of, if not demanding, cheaper and cleaner energy, but as it stands now we are continuing to pay a fortune for having our planet destroyed. And as usual, we are keeping stock prices and bonuses up by covering corporate expenses and they return the favor by dodging taxes – in some cases paying nothing.
No discussion about taxpayers bearing the brunt of corporate profiteering is complete without a mention of the massive bank bailout during the 2008 recession (that they caused). They lobbied our government for decades to slowly deregulate the banking industry (regulations that were put in place because of the great depression). Their hard work paid off and they were eventually allowed to do pretty much whatever they wanted. It didn’t take long for them to jump into their new sandbox and destroy the economy to the tune of well over $10 trillion (yes, with a “t”). We bailed them out after doing that to us. They often get credit for paying back that loan, but they did not pay back the original trillions they lost.
Along with the 2008 recession came the collapse of the auto industry. Their collapse was partly due to the recession but also due to their poor planning and management. So our Government bailed them out as well, but they were required to first show how they would restructure, revamp, scale back, etc. So basically, we had to hold their hands to make sure they ran their businesses better. At least the money we give to Tesla is to get a fledgling company going and the amount was much less than what we gave these behemoths that couldn’t get out of their own way.
The Wonder Drug
Hepatitis C is a nasty disease that kills. It is the most deadly of all infectious diseases and well over 3 million are afflicted with it. So it’s lucky for us that pharmaceutical giant Gilead came up with cures that are highly effective and have minimal side effects. The miracle drugs are called Sovadli and Harvoni. Thank God for Gilead and the pharmaceutical industry!
The story is pretty typical. Substantially funded by our government (the NIH and the VA), the early work was done by a VA employee who was also an Emory University research professor who created a spin-off company Pharmasset, Inc. Once things were looking good Gilead swooped in and bought up the company to the tune of $11.4 billion (with a “b”) dollars. That was a pretty sweet deal for a handful of people since estimates show that private (non-government) investments into developing the drugs were about $500.0 million (only with an “m”) – you paid for the rest. But to Gilead, that price tag was well worth it, since once they got their hands on it they brought it to market and proceeded to charge well over $80,000.00 for their treatments and got all those B’s back within a year. Gilead knew that the drug was desperately needed and that Medicaid (again, your taxpayer dollars) and insurance companies (your higher premiums) would cover the costs, but the costs were so high that Medicaid and Insurance companies were forced to limit who had access to the drug and how much of the cost would be covered. After four years of this continued price gouging, voices from the finance and business sectors actually began arguing that it would be much cheaper for the government to simply buy Gilead to allow patients to get the drug – the drug that their tax dollars developed. For some final perspective, the same drug was priced at $300.00 in India – which still gave Gilead a modest profit since that $80,000.00+ treatment cost well under $200.00 to produce.
This is just one of many examples of Big Pharma screwing us from all directions. Drug companies often point to R&D costs as excuses for their high prices, but the government and government-funded universities, paid by our tax dollars, have developed the vast majority of drugs that we pay too much for. Gilead says thank God for those taxpayer suckers paying at the front end and the back end of our drugs!
Our government has developed and continues to work on technologies in aviation, nuclear energy, the internet, drugs and biotechnology, disease control, green energy, nanotechnology, battery technology, space travel, high-performance computing, and even dark matter (wtf is dark matter?). Industries have also benefited from decades of defense spending. Our government has vastly improved entire segments of our society including communications, airline safety, health, and our infrastructure. Baked into all of this work is a focus on our safety and our future, not on how much money can be made and how quickly it can be made.
The full list of government-funded initiatives is much longer and the list of companies that have benefited from, or even have come into existence because of, this work is even longer. Just think of all the businesses, both large and small, that exist because of the internet. Unfortunately, the larger of these companies do little to show their appreciation to taxpayers. They are quick to use their free money to lobby our government in order to decrease their taxes, throw away employee protections, keep the minimum wage down, and allow the continued hiding of their profits in offshore tax havens. Industries get the gifts and we are left behind. Not only is this a direct slap in the face to their employees and the Americans that have funded corporate success, but also reduces the flow of money in the country, further decreases tax revenues, and slows the economy.
We have no idea of the scope of what our government does for us every single day.
With increased corruption, companies can now more easily use the government to protect themselves by blocking government efforts to advance competitive technologies. For example, green energy development has met with considerable resistance resulting in many countries advancing well ahead of us. So instead of creating whole new industries, jobs, and products that we could export to a world that is desperate to halt climate change, we will watch as other countries take the lead and we end up buying from them. This corruption-fueled government waffling on green energy makes companies and venture capitalists less willing to take risks with their own money.
This story gets worse. Even though our country now has vast areas of knowledge to build on, more money than ever before, insane computing power, and the increased ability to collaborate, research in America is actually on the decline. Part of that reason is that businesses are spending much less on R&D and closing some of the biggest, long-standing research labs in the country. More and more often they are simply relying on our government and our tax dollars to do the work for them. Most of corporate America is not interested in creating anything or contributing to society, they are only interested in maximizing profit with as little effort as possible. This trend of declining private research is weakening our economy and our society – it is also weakening our world standing and our national defense (compared to advances in some countries). Along the same line, when employers decide to move manufacturing jobs overseas we suffer the double whammy of losing jobs and future manufacturing know-how.
We never hear of the successes of government-led R&D until corporate America sneaks off with the results and takes all the credit. But when a research project doesn’t go well or goes over budget then we can be sure that conservative media will jump up and down and breathe fire as they rage about our government wasting our taxpayer dollars (all while they are using technology funded by taxpayer dollars to spread their rage).
The lesson in all of this is that our government is actually quite competent. We don’t even see that we have been spoiled by everything that our government has enabled for us over time. We have no idea of the scope of what our government does for us every single day. Our negative view of our own government is formed mostly by agenda-driven politicians, political operatives, and pundits. This view is often confirmed by the corruption-driven policies that come out of Washington, but behind the scenes and throughout our government are hard-working individuals that keep this country ticking in ways we could never even imagine.
None of this is to say that businesses are incompetent – this is just about recalibrating the conversation. All the chatter about government being in the way of corporate America is just plain wrong. There should be a healthy relationship where businesses and the marketplace benefits from the government while our government benefits from businesses creating jobs, paying taxes, and expanding marketplaces all of which add to a stronger economy and society. Unfortunately, the second half of that deal is not happening at all. Unfortunately, as is always the case with our new tilted playing field, the risks are socialized (taxpayers take all the risk) while the rewards are privatized (corporate America and the wealthy take all the profits). Corporate America relies heavily on our government every day and they know it, they just don’t want you to know it. They just want you to help them to get more tax breaks and more subsidies to pad their bottom line, and fewer regulations so they are “free” to do whatever the hell they want.
Corporations should have a role in our society but they shouldn’t control it. Our society, our government, and businesses are supposed to work together to create a functional and fair democratic society and capitalist economy that works toward the benefit of all. It’s ok to be driven by profit, but as part of society you need to follow the rules that are established by that society and you have to contribute back to society. Corporate America should consider themselves lucky that they are even part of this discussion at all since there was no such thing as a “corporation” in America when the constitution was written.
Unfortunately, and with many thanks to the corrupted John Roberts Supreme Court, dark money, and conservative political organizations, corporate America has been allowed to use their vast wealth to infiltrate and take the reins of just about everything in our government – always tilting the playing field more in their favor. Just as important, they use (or buy) media to drive home the message that our government is overbearing, in the way of business, and making all of us worse off. They do this so we don’t mind them paying little or no taxes and so that we are happy to have them dismantle our government, remove our protections, and take over its services for their profit.
The idea of our government stripping away the liberties of man has been the con of “free market” conservatives for decades. Conceived in the bowels of conservative think tanks, it has since spread far beyond President Reagan’s famous but destructive line: “The nine most terrifying words in the English language are ‘I’m from the government, and I’m here to help’ ”. While they disparage the government that we elect, they preach to us the virtues of profit-making schemes like trickle-down economics, maximizing shareholder value, and self-regulating industries. As they continue to tilt the field against they praise “rugged American individualism”, “pulling ourselves up by our bootstraps”, and “a rising tide lifts all boats”. The truth is that the free market ideology just gives the wealthy an excuse to turn our society into their hunting grounds – and us into their prey. The messaging has become so extreme that certain conservative elements have convinced portions of the Republican base to protest against our government for infringing their personal liberties by asking us all to wear masks during a pandemic
The simple fact is that without our innovative government, companies would do the bare minimum in order to keep their money flowing in and put forth little effort to advance the country as a whole. There would be minimal risk-taking, zero sharing of information, little expansion of markets, and lots of exploitation of consumers and our natural resources. The American economy would be in the dumpster without the active involvement of our government. Corporations would not be so successful and their wealthy investors would not be billionaires without exploiting all the benefits they get from our tax dollars. This coexistence was working wonders just a few decades ago, but the drive of corporate America to exploit us, take and keep everything for themselves, and control our government, has mangled the system so badly that now the taxes that most of us dutifully pay are actually creating the economic inequality that we are suffering through.
Related external links:
THE ENTREPRENEURIAL STATE by Mariana Mazzucato a must read and an easy read…
Nice Overview – Publicly Funded Inequality
Fossil Fuel Subsidies
Additional perspective on Fossil Fuel Subsidies
In defense of Elon Musk
Other Auto Makers are Worse
Gilead – A Summary
Gilead – A Deeper Dive
Gilead – The Earlier Profiteers