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Kushner’s Newest Mission

business-planVia WaPo:  Trump taps Kushner to lead a SWAT team to fix government with business ideas

President Trump plans to unveil a new White House office on Monday with sweeping authority to overhaul the federal bureaucracy and fulfill key campaign promises — such as reforming care for veterans and fighting opioid addiction — by harvesting ideas from the business world and, potentially, privatizing some government functions.

The White House Office of American Innovation, to be led by Jared Kushner, the president’s son-in-law and senior adviser, will operate as its own nimble power center within the West Wing and will report directly to Trump. Viewed internally as a SWAT team of strategic consultants, the office will be staffed by former business executives and is designed to infuse fresh thinking into Washington, float above the daily political grind and create a lasting legacy for a president still searching for signature achievements.

[…]

“We should have excellence in government,” Kushner said Sunday in an interview in his West Wing office. “The government should be run like a great American company. Our hope is that we can achieve successes and efficiencies for our customers, who are the citizens.”

I will readily allow that the federal government (like any large organization) could use reform and I have little doubt that there are lessons from business that could be applied to government (and, no doubt, some lessons from government that could be applied to business).  These are, however, very general observations.  The bottom line (to use a business term) is that government isn’t a business and cannot run like one.  A business exists to produce a given product or service and make a profit in so doing.  It can limit itself to a specific niche and it does not have to do more than it wants to do.  And, perhaps most importantly of all in terms of comparison: a business can fail.  A business can go out of business; a government cannot.  Further, a business only has to provide its products to those who can afford to purchase it and it has no obligation whatsoever to those who cannot.

And, of course, Kushner is wrong:  citizens are not “customers.”  Government has obligations to citizens that go well beyond the kind of responsibilities that a business owes its customers.  Beyond that, being a citizen in a democratic system is far more profound a relationship to government than customer is to a business.  Citizens are the constituent element of the government.

Before anyone wants to romanticize how well business serves the public versus the government, I would ask how well one often feels served by, say, the airlines or cell or cable companies (or, to be really topical, an insurance company).  The bottom line is that large, complex organizations are often not as responsive as we might want.  Granted, one can switch airlines or cell companies (although, really, it is often the case that the service at company X is not that different than company Y) while moving countries to get better service is a tad more onerous a task.

There is actually a great deal of hubris associated with the notion that a given titan of industry knows how to “fix” the US government given that there is no business enterprise anywhere that is anywhere nearly as complicated a structure as the federal government of the United States.

Kushner proudly notes that most of the members of his team have little-to-no political experience, hailing instead from the world of business.

I would note that we just saw how well the Trump administration was able to use their outsider acumen to navigate the halls of Capitol Hill.

Again:  I am not opposed to the notion of learning from business, nor to the notion of bureaucratic reform.  One item mentioned in the piece, modernization of technology for Veteran’s Affairs, sounds like a good idea.  I just find it to be a highly flawed notion that one paradigm (business, broadly defined) is able to inform another paradigm (public policy) as directly as is often claimed.

A parting thought:  in whose interest does a business ultimately operate?  In its profit motive, or the best interest of the customer?  I am pretty sure my local car dealer (or real estate developer) isn’t dedicated to making sure the customer gets the lowest price on the item being sold.

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About Steven L. Taylor
Steven L. Taylor is Professor of Political Science and Dean of the College of Arts and Sciences at Troy University. His main areas of expertise include parties, elections, and the institutional design of democracies. His most recent book is the co-authored A Different Democracy: American Government in a 31-Country Perspective. He earned his Ph.D. from the University of Texas and his BA from the University of California, Irvine. He has been blogging since 2003 (originally at the now defunct Poliblog). Follow Steven on Twitter

Comments

  1. Franklin says:

    Couldn’t have said it better. Nice concise piece here.

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  2. Ben Wolf says:

    A government run like a business would be in competition with business. If Kushner understood what that meant he’d be doing everything in his power to avoid it because there’s no private firm or group of firms that can outcompete the public monopolist. Furthermore, private firms are largely run as autocracies; his thinking on this suggests some very bad potential outcomes over the next 3 1/2 years.

    It is also troubling that Kushner thinks society can be reduced solely to a series of economic transactions without the highly complex web of relationships and responsibilities we all share. He’s trying to make an adaptive system fit into a hyper-simplified model because the model is what he knows. That level of arrogance, that the world should be made to work the way one is comfortable with, also does not bode well for the coming years.

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  3. Just 'nutha ig'nint cracker says:

    Cue the smoke and mirrors.

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  4. Argon says:

    Three words: Comcast customer service.
    That’s how bad things can get.

    BTW – It’s not as if this hasn’t been thought of before.

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  5. Ben Wolf says:

    I’m also going to throw this out there because I think it’s worth thinking about: there is a well-established pattern in American history of the very wealthy supporting increasingly autocratic government. One only need look back on the pre-war years when fascism was rising across the planet to find sympathetic and approving comments for the “efficiencies” of Germany and Italy among the business elite

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  6. J-Dub says:

    We should look at other countries that “run like a business” and see if that is something we’d like to emulate. I’m thinking not.

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  7. SenyorDave says:

    If the government is run like a business the first thing that should be done is to fire the CEO. That guy costs taxpayers $3 million a week so he can play golf and promote his own private business. And what is our ROI? Trump has become an international embarrassment.

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  8. CSK says:

    The White House Office of American Immolation.

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  9. teve tory says:

    Before anyone wants to romanticize how well business serves the public versus the government, I would ask how well one often feels served by, say, the airlines or cell or cable companies (or, to be really topical, an insurance company).

    I love it when people make fun of the DMV. Are you kidding me? I’ve generally gotten good service at the DMV. The person at the DMV doesn’t get a bonus for fuckin’ me over. Have you tried getting something fixed on your Comcast bill? I will go to the DMV every day this week and twice on Sunday if it would get me out of a godddam tech support call with a company like Comcast.

    You’ve got to sort out a problem with either the US Postal Service, or Time Warner. Which would you rather do?

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  10. AndrewBW says:

    He’s reimagining government, he’s bringing peace to the Middle East — why the heck did we ever bother with Trump? We should have just elected Jared!

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  11. Pch101 says:

    If “running government like a business” means providing service with a smile and encouraging creative thinking, then I’m all for it.

    But I doubt that’s what is intended here. If the US was run in the same way that Trump runs a business, then the country would default on its debts, stiff its vendors and bar anyone from disparaging the CEO (read: Trump). No thanks.

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  12. michael reynolds says:

    I see that sufficient ridicule has already been heaped.

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  13. al-Alameda says:

    Again: I am not opposed to the notion of learning from business, nor to the notion of bureaucratic reform. One item mentioned in the piece, modernization of technology for Veteran’s Affairs, sounds like a good idea. I just find the notion that one paradigm (business, broadly defined) is able to inform another paradigm (public policy) as directly as is often claimed, and that undergirds this effort, to be highly flawed.

    Most people who SAY they want government to be run like a business would be projectile vomiting non-stop for days on end if government somehow changed to be run on the corporate/CEO model.

    Public Hearings? Don’t make me laugh. Who needs them?
    Business moves quickly, why can’t government?

    The comparisons and analogies of the government vis-à-vis ‘you or me’ a household budget, or a business, are usually as apt and relevant as the Donner Party is to a Dinner Party (I know, sorry).

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  14. DrDaveT says:

    The bottom line (to use a business term) is that government isn’t a business and cannot run like one.

    When I hear idiots say that government should be run more like a business, I ask them whether they think their family should be run more like a business. They all say “no”, at least after a little discussion. Then we talk about why that would be a bad thing. Then we can talk about why the government is a lot more like a family than it is like a for-profit business.

    That said, I will believe that Kushner is serious about running the government more like a business when he announces that the IRS will henceforth be fully funded for collection activities. The ROI on that has been estimated at anywhere between 700% and 2000% by independent observers. Even GAO thinks it’s a no-brainer.

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  15. CSK says:

    Well, Kushner will have to take some time off his new duties in order to be questioned by the House Intelligence Committee as part of its Russia probe.

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  16. Console says:

    1st step to making government more efficient… create an layer of oversight bureaucracy that will parallel a lot of preexisting oversight bureaucracies in the federal government.

    2nd step, realize you can’t actually implement any of these changes for various reasons such as federal law, union contracts, political meddling etc.

    3rd step, rinse and repeat with the next administration

    I work in a federal agency that has two parallel power structures due to nonsense like this.

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  17. Daryl's other brother Darryl says:

    I guess I’m left wondering; which business?
    Trump Airlines?
    Trump Magazine?
    Trump Vodka?
    Or the Trump Casinos that went bankrupt?
    Running the government like a business is one of the dumbest pieces of Republican dogma.

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  18. @Ben Wolf:

    there is a well-established pattern in American history of the very wealthy supporting increasingly autocratic government

    Not just in the US. Protecting large amounts of existing wealth and privilege often leads to an authoritarian impulse.

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  19. Joe says:

    When your only tool is a hammer, all problems look like nails. If Kushner reports back that most of government’s problems aren’t actually nails at all, but he did find a few, I will give him an attaboy. But I don’t expect that to happen.

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  20. CSK says:

    @Daryl’s other brother Darryl:

    All of Trump’s failed businesses have been premised on the idea that you can peddle tacky merchandise and lousy services at grotesquely inflated prices. Trump Vodka was retailing at $100 a bottle when the other premium brands, with which it was supposed to compete, were going for $20-$30 a bottle. If you bought Trump Vodka, you were paying the extra $70-$80 for the 24-karat gold lettering on the bottle.

    Trump seems never to have grasped two very basic concepts. The first of these is that the kind of schmuck who’d pay $100 for a bottle of Trump Vodka because it has his name on it in gold leaf can’t afford the stuff.

    The second is that the people who could afford to pay $100 for Trump Vodka are buying Gordon’s for 20 bucks a gallon. And none of them would be caught dead in any of his casinos or resorts.

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  21. gVOR08 says:

    and, potentially, privatizing some government functions.

    I suspect that’s a key line here. Putin is a role model. Trumpsky needs to create some dependent oligarchs.

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  22. Jen says:

    Good post.

    The whole notion that government can be run like a business is going to implode, bigly.

    It’s ridiculous that this idea continues to get traction, but here we are.

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  23. Hal_10000 says:

    A few years ago, we had a bunch of business-types flee the recession for academia. University Presidents boasted about how this would change things (and Academia is in bad need of reform). It didn’t. First, the business people had the idea that they could just issues edicts and everyone would comply, not realizing that University administrations don’t have that kind of authority. Second, they eventually adapted … by taking on all the quirks and agendas of academics. So all that happened, ultimately, was that administrative salaries went up.

    Traditionally, in the business world, it is very hard to reform a business and move it in a new direction because the old “corporate culture” is massively ingrained. The only way you can do it is by firing half the people or more and building a new corporate culture. That’s almost impossible to do in government thanks to the protections given to civil servants. I’ve long-argued that the only way to reform government is to, every year, take one Department, tear it down completely and rebuild it from the bottom putting the existing employees in new positions in new agencies. Over two decades, you’d cycle through them all. Not even sure that would work.

    I suspect what will happen is that Kushner will make some cosmetic changes, wrest some minor agreement out of the federal employees and declare victory. This task is enormous — maybe even more difficult than healthcare reform — and he (and Trump) are frankly not up to the challenge.

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  24. ...ig'nint... says:

    @michael reynolds: Yes but you do have to admit that the concept

    Viewed internally as a SWAT team of strategic consultants…

    would be hilarious if they weren’t serious about believing it. That’s the really sad problem here, Trump, Kushner, and company seem to be really trying to get control of this clusterflock. Alas, they remind me of a saying we had at one company for which I worked many years ago.

    This guy could flock up a shirt sandwich.

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  25. ...ig'nint... says:

    @Daryl’s other brother Darryl: And don’t forget Trump University, Trump Business Men’s Wear and Trump Steaks.

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  26. Gustopher says:

    Running government like a business means extracting all value and then letting the shell collapse?

    Oooh! Does this mean we will start stiffing contractors?

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  27. DrDaveT says:

    @Hal_10000:

    I’ve long-argued that the only way to reform government is to, every year, take one Department, tear it down completely and rebuild it from the bottom putting the existing employees in new positions in new agencies.

    Seriously? I was sure you were smarter than that.

    Federal agencies exist to implement the law as it exists. They are generally pretty well-adapted to that purpose, though pretty much all of them (even DoD) are understaffed and underskilled. If you want them to function better, you need to do one or more of the following:

    1) Change the laws to be easier to administer
    2) Improve the average competence of the workforce
    3) Staff the agencies appropriately for the workload

    #1 is made entirely of Congressional kryptonite — the complexities of the current law all exist to reward particular interest/donor groups.

    #2 requires making a career of public service something that is attractive to top-quartile professionals. That’s true in a few niche areas today — scientists at national labs, diplomats in the State Department, statisticians at the Bureau of the Census, economists at the Federal Reserve and Bureau of Economic Analysis, air traffic controllers. But for the vast majority of fed jobs, the pay sucks, the working conditions are crappy, and 47% of America thinks you’re a parasite. Oh, and if you’re extra lucky, Congress spends a noticeable fraction of their time trying to sabotage your work.

    #3 makes Republicans foam at the mouth, because Socialism! or Freedom! or something. I don’t understand the argument, but they clearly feel strongly about it, because they’ve been strangling the federal agencies as hard as they can for 2 decades now. (Fortunately, they have short fingers.)

    Tearing down an agency won’t help if you have to build it back up again to do exactly the same day-to-day tasks, using the same leftover workforce, at the same inadequate staffing level. Moving people with institutional knowledge away from the things they know best will only make things worse.

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  28. CSK says:

    Why do I have the feeling that behind Kushner’s fresh-faced and cherubic countenance lurks the soul of Gilles de Rais?

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  29. grumpy realist says:

    @DrDaveT: I give you as a good example what happens in the USPTO. They cycle between not hiring sufficient examiners (to cut down on the cost), and then people bitch like crazy because it takes 10 years to get a patent, which results in them hiring a boatload of people and Congress bitches at the number of government employees.

    What was the old line? “You can have it a) cheaply b) done well c) done soon. Pick two of the three.”

    The reason you can’t run a government like a business is a) you have to serve ALL the people, not just the people who can afford and want to buy your product, and b) if you run a government like a business don’t complain if people decide to sell their services to other governments. You’ve just demolished the concept of treason.

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  30. Scott says:

    You know, these folks should read a little bit of history. In the 80s we had the Grace Commission which had a similar mission. They found all kinds of savings; however, the savings were from programs they didn’t like but a lot of other people did.

    In the 90s, VP Al Gore spent energy reinventing government. Some positive ends but still it take long concerted effort to embed change.

    Now if this effort is about pushing efficiency into government, it will be required to invest in more IT, a little business process reengineering and other stuff that I believe will be beyond the understanding of Kushner and Trump.

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  31. Neil Hudelson says:

    Huh. Where have I heard this idea before. Hmmm…

    Oh yes.

    [Conceding the needs for reforms, President] Bush recommended a multifaceted cleansing plan ranging from stiffer prison terms for corporate fraud convictions to the creation of the Corporate Fraud Task Force, a sort of financial crimes SWAT team.

    That was in 2002, and by 2007 this government reformation SWAT Team had successfully stamped out corporate fraud; all financial and corporate fraud impeding disasters were, blessedly, averted.

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  32. Hal_10000 says:

    @DrDaveT:

    Employees at federal agencies are paid significantly more than their counterparts in the civilian labor force. I know their labor unions try to say different but the BEA’s analysis shows a huge increase, especially when you include benefits. Staffing levels are not the problem. Having agencies that are taking the same approach to the same problems they were taking 20, 30, 50 years ago is the problem.

    With replacing a federal agency, you would be talking about a multi-year process where you would review everything it’s doing, build a new Department to do the things you still consider necessary, then transition the Department over to the new structure. The problem this would address (and a problem we see a lot) is that govt agencies and programs are considered sacrosanct fiefdoms that can never be diminished or abolished. You put an entire Department up for review and you change that mentality.

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  33. DrDaveT says:

    @Hal_10000:

    Employees at federal agencies are paid significantly more than their counterparts in the civilian labor force. I know their labor unions try to say different but the BEA’s analysis shows a huge increase, especially when you include benefits.

    Sorry, this is nonsense.

    Menial employees at federal agencies are paid more than their minimum-wage counterparts in private industry. This is true.

    Professionals at federal agencies are paid a fraction of their market salaries, even after accounting for benefits. What they get in return is job security, and (most of the time) a sane work/life balance. For many, the trade is worth it.

    The BEA analysis compared job positions directly, but failed to account for differences in experience and tenure. Yes, a biochemist with 20 years’ experience at FDA makes more than a biochemist with 5 years’ experience at Pfizer. The federal workforce is skewed old (and thus experienced) by the long-standing hiring slowdowns and freezes they’ve been under.

    If I were to quit my job and accept the closest equivalent federal position, I would take an immediate pay cut of about 30%, switch to a worse health plan and a worse retirement plan, and exchange a very nice (if small) office for a room any Motel 6 would be ashamed of. And I work in the nonprofit sector — I could also boost my salary by 50% by going for-profit.

    Staffing levels are not the problem.

    They are certainly a problem. When you literally have half the people needed to do the job — and those are not the best half, because the best half got sick of being overworked and underappreciated and had better alternatives elsewhere — the product is going to suck. Fix that first, and then we’ll see how much problem is left. My money is that you would not need any radical transformations at that point in most agencies.

    So maybe I can agree that there is one way that government should be run more like a business. Good businesses know what it is they are producing, and invest in appropriate resources for production. Congress tells the executive branch what it has to produce, but then separately denies them the resources to do that properly.

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  34. Mikey says:

    A business can go out of business; a government cannot.

    Come on, now, don’t sell Trump short. Just look at his track record with literally every other business he’s tried to run. If anyone can put a government out of business, it’s him.

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  35. HarvardLaw92 says:

    @Hal_10000:

    Employees at federal agencies are paid significantly more than their counterparts in the civilian labor force

    I’m generally not a fan of blanket statements. I can tell you, for example, that a first year AUSA earns somewhere around (it varies a little) $62k per year. The maximum that he/she will EVER earn in their entire career is about $162k per year.

    For reference purposes, we pay first year grunt associates more than that (they start from day one at $180k per year with an average $15k bonus).

    By year 9, they can expect to be closer to $370,000 with a $115k bonus. Achieve equity status and it’s well into 7 digit territory. Hell man, even first year associates at super-regionals in the depressed wage market of the South earn more than AUSAs do.

    And trust me, the federal benefits package (which isn’t nearly as great as most people believe it to be) doesn’t even come close to bridging that gap.

    The sad truth is that long-term AUSAs are either:

    1) sufficiently masochistic in their devotion to public service that they’re willing to eschew earning potential (which is not the norm), or;

    2) They are more or less incapable of competing in the private sector and choose to settle for the relative security of a government position (much more the norm).

    Few people earn less because they choose to, IMO. Most do so because they have few other options, so they select the least bad one.

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  36. DrDaveT says:

    @HarvardLaw92: I know a few Ivy League JDs who are feds because they really have no interest in 60 hours weeks or having to drum up their own private practice business, so they can do something that pays and that they think is important without trashing the home life. Mostly women, who also face less discrimination in gummint than elsewhere.

    But yeah, the feds aren’t luring attorneys away from private or corporate practice with their sweet compensation and bennies.

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  37. Franklin says:

    Our hope is that we can achieve successes and efficiencies for our customers, who are the citizens our subjects.

    This is what he was actually thinking.

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  38. Mikey says:

    @HarvardLaw92:

    And trust me, the federal benefits package (which isn’t nearly as great as most people believe it to be)

    As a newly-minted federal employee, I have recently discovered this. The benefits package is nice, but aside from the reasonably decent pension (decent, not fantastic), it isn’t any better than a lot of private sector benefit plans. The health insurance isn’t any cheaper, and the dental and vision plans are more than what I paid at my private sector employer.

    I do get a lot of vacation days, but that’s just because they credited me my military time. Normally I’d have started out with 13 days a year, less than the starting vacation at my private sector employer.

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  39. Facebones says:

    @Mikey: I agree that the AMAZEBALLS BENNIES from Uncle Sugar are overstated. However, workers in this country have been so beaten down over the last 40 years that concepts like “sick days” are unimaginable fantasies.

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  40. DrDaveT says:

    @Facebones:

    However, workers in this country have been so beaten down over the last 40 years that concepts like “sick days” are unimaginable fantasies.

    Yeah, the sick leave part of the GS benefit package does stand out as particularly generous.

    …which has the perverse side effect of making federal employment especially attractive to the sickly, or to those caring for a sickly kid / spouse / dependent parent.

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