The Solution to the Economic Crisis - Who do you trust, Government or Business?

I watched in amazement the past couple days as the leaders in our Goverment put the beat-down on a group of bank executives in Washington DC. If you missed it, check out youtube for the highlight reel. I wouldn't call it political drama, I would call it political comedy.

After watching our elected officials do their best to embarrass, demean and ridicule this group of executives all I could think of was, "who elected these people and how can they possibly stay in office after this pathetic performance?" The come across as a bunch of blow hard with little real knowledge or experience in these complex financial issues. There's an old saying that goes something like this, "Better to be thought a fool than to open your mouth and remove all doubt."

Before anyone thinks I've lost all sanity, let me first say that nearly all these executives have made poor decisions that contributed to and helped create the economic mess we're in. They are clearly the most out-of-favor group of business leaders in the entire world right now and the primary target of the populist crowd who blames them for all their personal financial challenges. For anyone in government to do any more to help these men and their companies would likely be political suicide.

But step back for a moment and put your anger on the shelf and consider that these same elected officials are the "executives" of the largest enterprise in the free world, the US Government. The very things they are attacking these men and their companies for they are guilty of themselves by several orders of magnitude.

Where is all the outcry and criticism of our Government for spending far beyond their means and leveraging the future generations of Americans with a burden of debt equally as troublesome as any created by the mortgage or banking industries? This is like the pot calling the kettle black. It's the pinnicle of hypocrisy!

If our Government officials could simply grasp the concept of "living within our means," just like we all must do in our personal households, we likely would have had the resources to stimulate the economy from a rainy-day fund rather than spending over a Trillion dollars of money we don't have. The criticism should cut both ways, but the populist crowd is giving Government a pass on this, or still thinking it's George Bush's fault. Government was broke long before George Bush came along and he just helped get the problems out in the open a lot faster. Government is unable to make the tough decisions and sacrifices needed to turn this crisis around, because they are too sensitive to the minority groups that will be impacted by those sacrifices. They can't make tough decisions.

Every responsible exectuvie at a real business is making the tough decisions of cutting back, laying off and restructuring to keep their businesses viable in the face of the worst economic environment in decades. They don't pass the buck, the make the tough decisions. Sure lives are impacted and dreams are crushed, but these tough choices were necessary to keep the business afloat. The executives in the business world rarely ascend to those key authority positions without first demonstrating they have the education, knowledge, and leadership skills needed to make the tough decisions required of a senior executive. That's simply not the case when it comes to Government.

I've done a fair bit of investing in real estate over the years and I remember talking to a man who had a great deal of experience working with cities and municipalities on development issues like zoning and density and the like. Those are complex issues that take specialize knowledge, training and experience. I watched him deal with city councils and managers that had zero education or experience in development and land planning but who held total decision-making authority over decisions that involved hundreds of millions of dollars of taxpayer money and resources. They were more likey to be be swayed on a critical issue by the opinion of their next door neighbor than a skilled expert from that field.

Just think, even a small rural city may have an annual budget in the tens of millions of dollars, but the people of the city entrust the management of those precious resources to a group of lay people who are elected in a popularity contest. Even a small city budget dwarfs the budgets of many very well-known public companies. Can you ever imagine having a group of lay people making the decisions on how to run IBM, Microsoft or General Motors. (some of you cynics may say that might not be such a bad idea considering how those companies have been run lately)

The point is that we have a group of poweful elected officials that lack the expertise and skill to deal with the serious and very complex issues facing our country, and we're all stake-holders. Given the rank state of national and state politics, it's no surprise to me that the most qualified people have zero interest in running for elected office. Who would want to go through the political gauntlet to get a low paying job with millions of ignorant people taking pot shots at your every decision. Power in Government is granted by seniority rather than qualifications.

It's pretty easy for Maxine Waters to beat down those bank executives and rant and rave like she did on C-span this week, but if you let a person like her make those tough and complex decisions instead, do you really think we'd be better off? Not a chance! To protect her status and authority, she would never even venture to offer a solution that would make sense, but she can take all the pot shots she wants without fear of losing power. Why doesn't the same standard apply to her and every other elected official on the decisions they make as a member of Congress?

The more government gets involved in business, the worst things are going to get. If you can't run a business profitably, it's going to fail. That's capitalism. If government wants to regulate business more than they already do, it's going to add more cost and reduce profits even more, meaning more business will fail and fewer entrepreneurs will even consider starting a business, which means fewer jobs for the populists and more challenges for the country.

There are plenty of strong, well-managed businesses out there that could instantly create new good-paying jobs that will last a long time if we gave them a little bailout money to prime the pump. Having witnessed the inefficiency and ineptness of government many times in the past, I'd rather gamble my financial future (and that of my next couple of generations) on them rather than the buffoons who run our Government.

Just so you don't think I'm just a chronic complainer without any constructive input, let me suggest a good starting point to get real change in Government. I would immediately institute term limits for all elected officials. Eight years is all you can serve in office no matter what position you're in. We do it for the President, why isn't it equally good for the House and Senate. There's enough blame for all the woes in America for everyone to take some. Until we can get past putting so much energy into pointing the fingers of blame and redirect it into creating bipartisan long-term solutions to the very complex problems facing our world, nothing is going to change, and it's likely going to get a whole lot worse.