Current Events — HabitableZone

Current Events » in reply to re: Compromise

government as a business
Robert — (archived)

You're probably right that the SBA is prohibited from making a profit, probably to avoid conflicts of interest. But that's not necessarily desirable. I don't have a problem with the theory that government ought to be run as a business. It's just that, in practice, all I've ever seen is politicians acting as merchants, selling votes and influence retail. I think people are too cynical to believe that it means anything other than "feather my own nest". We need to be really careful about introducing a profit motive into government.

Historically, one solution to the problem is to set up corporations chartered and capitalized by the government, but not directly part of the government. They have their own boards of directors, some even sell stock; and there's a theoretical "firewall" between these organizations and the government. Sometimes it works badly, as with Amtrak; other times it's been a brilliant success, like Fannie Mae and Freddie Mac, which have made mortgage capital affordable to ordinary people.

In my parallel reply to Tom, I worked my way from "SuperSBA" to realizing that the two government-backed mortgage companies are already in the business of providing access to capital for Americans, and that they could add business capital lending without missing a beat.

The government got into the mortgage business through the argument that home ownership is "the" American Dream. But of course another American Dream, and one that's perhaps more fundamental to who we are, is the dream of starting a business and creating your own success.

Just as it's no longer possible for people to just go occupy some unoccupied land, cut down some trees, and build a house; it's no longer possible for Horatio Alger to create a fortune out of thin air. It takes some capital to start a business these days. Just as you have to pay for land and building materials, you have to pay for office space and supplies and salaries and the services of the myriad specialists you need to navigate today's complex business environment--the accountants and tax attorneys and lobbyists and human resources and advertising specialists, and yes, government licenses...it's too complicated for one person to do without capital.

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