Wednesday, August 17, 2011

Service verse Sustainability, The Government Way

I’ve toyed with this idea for some time. It seemed we needed to wake up to what we as voters and taxpayer have allowed to happen. Our country is now run by two major corporations whose only true interest is sustainability. It’s no longer about the people or the nation, it’s about sustaining the life of the party. 546 people have become the royalty of the “republic for which they stand”. For the most part they hold themselves above the law and only answer to their parties. The voters for the most part only get to chose between the candidates the two parties have put forward.

Starbucks CEO Howard Schultz stated, "All it seems people are interested in is re-election,". "And that re-election -- the lifeblood of it is fundraising."

There are a number of similarities between corporate America and political parties. Both know to continue they need a revenue source that is sustainable over time. Otherwise the corporation dies out. For political parties that is fund raising. Build up a large enough war chest and new parties cannot afford to enter the marketplace. Both major political parties, combine, raised $1.9B during the 2008 election cycle. Corporations sell products and services to generate funds, what do political parties do?

Political parties use taxpayer money to fund projects targeted toward potential donors. Potential donors might be individuals, corporations or lobby groups. It really doesn’t matter to them, money is money. It would appear that the goal of legislation is primarily to garner good will among potential donors. One of reasons so much “pork” is added to every bill is to influence potential donors to contribute. Why else would congress add something like a library or bridge to a bill on healthcare or immigration? Why would a bill exclude certain groups from participating? Why would congress exempt certain groups from taxes or levies? It’s all about fund raising.

Both corporations and political parties engage in branding, advertising and public relations. One of the major differences is that corporations must reinvest their own money in product development to keep the revenues flowing. Political parties on the other hand have the ability to tax the general public to create “products” they can give to the market in exchange for donations. The money comes from the public but goes to the party. It’s a nice scheme. There is no direct connection between taking money from the tax payers… providing a “service” to the public… and collecting donations for the party. But those most willing to donate to the party are the ones who reap the most benefit from the “services” and generally don’t pay as much tax toward its delivery.

Almost 50% of those who filed taxes at the federal level paid no taxes. This does not include all of those who survive but have no taxable income, mainly due to entitlements. (not saying all entitlements are bad, just pointing out a fact) So the majority of the constituents (voters) are not currently paying for any of the services that they receive. From a business standpoint this is not sustainable. Why would congress pursue an unsustainable strategy? Because sustainability is about fundraising, not government spending. When worse comes to worse, they can just print more money or add more taxes.

The system has been broken for some time. It is now coming to a tipping point. Unfortunately the political parties will not chip in to bail us out. They will simply tax the voters and use the money to influence donors. It’s what they do…..

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