Republicans and some conservative Democrats have been complaining about the almost 800 billion dollar stimulus bill. Their grievances lie in giveaways like the $150 million for the Smithsonian and the $ 30 million project for San Francisco to restore wetlands. Their moral outrage, however, is unsophisticated. In theory, it is abominable for a taxpayer in Oklahoma to fund a museum more than a thousand miles away. But if those critics disdain that, they ought to extend that same disgust to the private sector as well.
There is undoubtedly more of a bottom line in the private sector than the public sector. Gimmicky accounting measures can temporarily hide the true worth of a firm, but investors will ultimately flee if a firm cannot eventually generate positive cash flows. The real effectiveness of a government program can be more easily concealed from taxpayers. The complexity of laws and government funding make it easier to dupe the public. And the private sector measures profitability, while government programs can be justified using other arguments. Homeland Security, for example, can claim that there has not been another attack since 9-11. That indisputable statement does not necessarily mean they deserve the credit for that. Perhaps there hasn’t been another attack despite their efforts—-not because of them. Having said that, investors still have some of their money used for wasteful things, just like taxpayers do.
The most common criticism of waste in corporations is on such luxury items as jets and expensive meals. But how about the distribution of jobs? Senior executives can frequently convince Human Resources to hire a family member or close friend even if they are not the most qualified.Or how about a big corporation giving money away to a local school even if there are no tangible benefits of doing so? Or how about a corporation hiring a certain bank not because it is the most competitive, but because the CFO of the company is friendly with a certain Managing Director from one of the banks? If shareholders agree that those costs aren’t very burdensome, then it should follow that taxpayers accept pork as an infinitesimally small percentage of GDP.
Not only do investors acquiesce to those examples, in many cases they gladly acquiesce. If the price of keeping top money makers at the company is giving them more favors, so be it. And if the price of having a government that works and functions is minimal corruption, so be it. If investors think unnecessary expenses are too excessive, they can sell their assets. And if taxpayers think they are getting ripped off, midterms are at maximum two years away.
It is true that Americans have no choice but to have some type of government-unlike investors and their respective financial instruments- but is that such a bad thing? States will always fight vigorously over federal resources, but no one complained about the infusion of Republican money into Democratic New York after 9-11. God forbid another natural disaster like Katrina happens in Louisiana, I am sure Obama will unflinchingly come to their rescue. During the Hezbollah-Israeli conflict in 2006, America made sure to take care of and rescue its 25,000 citizens in Lebanon—regardless of party.
This is not to suggest that citizens should stop demanding and expecting a more perfect union. All it is saying is those citizens that complain the most, who are ironically the most well off, should try to have some perspective. They might be overtaxed, but at least their wealth is protected through laws more than any other country in the world. That insurance outweighs the personal cost of paying for the Smithsonian.
