There's No Similarity
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In the June 27 issue of The Pilot, a letter from John Rowerdink discussed how the businessman and the career politician go about making decisions.
His conclusion was that the businessman picked the solution that provided the best result, where the career politician chose the solution that gets the most votes.
He is correct in his analysis, but not for the reasons he implies.
The businessman always strives for the best result. In business, the “best result” is how well the bottom line is affected, and how the shareholders’ returns on investment are affected. The “best result” does not care about the product or the employees or the environment.
The career politician is the elected representative of the people, the voters. If the decisions made by the politician result in votes for his re-election, it is because he has made decisions favored by the voters, the people whom he or she represents. It is how the system is supposed to work.
Politicians are elected by the citizens. Businessmen are hired (or start their own company and hire themselves). Both have a job to do. There are NO similarities between the two, other than doing their job, because a company cannot be run like a government and a government cannot be run like a company.
Romney is a wonderful businessman, Obama is a pretty good politician.
Jim Russell
Vass
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Comments
Easygoing 10 months, 3 weeks ago
Another difference is that business these days is only concerned with short term quarterly profits and results and how much they can put in their pockets, not the long term health of the country or anyone but themselves. To them its a zero sum game. We win, you lose. Huge difference!
The_AnonymusProfit 10 months, 3 weeks ago
Man, the lack of brain cells from this article is amazing.
JimRussell44 10 months, 3 weeks ago
Care to elaborate on that comment Profit?
The_AnonymusProfit 10 months, 3 weeks ago
The claim that buisess is bottom line does not take into account what the bottom line intails.entails. saying product quality environment and employee are not taken into account is absurd. Just loon at apple.
JimRussell44 10 months, 3 weeks ago
The purpose of a business is to generate a profit. That is the bottom line. The business does not care how a product is made, where it is made, who makes it or what effect making it has on the environment . The business cares only that it can make a profit doing it and that they can increase the level of profit going forward.
Speaking of "the lack of brain cells", have you read your last post?
RmeMP 10 months, 3 weeks ago
Jim, I have to agree with AP on this one. If you own a business, and run it the way you stated above, then it must not be very good business. Money is NOT all that matters to a good business owner.
That said, I also agree the Romney is a good businessman - but, I would disagree that Obama is a good politician. Most good presidents are re elected, he don't stand a chance.
JimRussell44 10 months, 3 weeks ago
I'll agree that money is not the only consideration, RmeMP, but it is the one that carries the most weight in the businessman's decision making process. I'm afraid that, when all else is stripped away, businesses are run the way I describe. The question is: Do you want your country run that way?
The_AnonymusProfit 10 months, 3 weeks ago
Usually I would let my one comment ride as it is self explanitory enough, but I am home early from work so I will teach you Mr. Russell, what you should have learned years ago.
Comany A and Company B both make sprockets. Company A makes its sprockets from High Carbon Steel, while Company B makes its sprockets from Low Grade Steel.
Company A sells its sprockets for 15.00's a sprocket, while Company B sells its sprockets for 11.00's.
Company A takes time to invest some money in making sure its product is somewhat environmentally friendly. Company B does not.
Company A pays its employees well, provides benefits, etc etc. Company B does not.
As consumers begin to use the products from A and B they see a difference right off the bat, Company A's product has a lifetime warrenty, Company B's has a limited damadge warrenty.
Company A's packaging touts its environmental concessions and promises to do more. Company B's packaging just says Sprocket.
At first many consumers buy Company B's product because it is cheaper, while Company A still sells many sprockets it lags behind Company B in sales.
One would think at this point that company A should reduce its quality costs perhaps? No company A realizes 1 they can compete in a higher end market then company B can and increase sales through this. Also company B's less reliable product has reliability issues causing consumers to switch to company A.
Company B experiences high turn over in labor causing them to spend alot of money on retraining, Company A has low turn over as its employees know they have job security and a good employer.
Eventually company B goes bankrupt as its inferior product can not compete with the well made product from Company A.
We see this all the time in the private sector. While there will always be a market for cheap things. In the end most people are willing to spend a little more to get a product that wont break. This is why Toyota took so much market share away from american cars. They had a superior product, better customer service etc etc.
We see this in computers with Apple offering neverending innovation. We see it in our hardware where we recognize that a Maytag product is built to last.
The_AnonymusProfit 10 months, 3 weeks ago
Mr russell, while there is a twist to every story, your understanding of business practice, ethics, and implementation are far off the ball. Private sector companies do not have tax payers backing them up, if their product fails, then the profits which are needed to grow the company and pay the share holders shrivel up and the company goes under.
As to your last comment, yes private companies in the end stripped away are all about profit, that is their purpose. however now you might, though I doubt it understand why your original assumptions were wrong. And yes, I would love to see the governmental offices, Ie bureaucrats and the works, run more like a private corporation, if we did that we would have 0 debt.
Thatcher 10 months, 3 weeks ago
Mr. Russell-- I own a business, and my employees are like family to me. You say: "The 'best result' (i.e. profit) does not care about the product or the employees or the environment." Here, you are flat out wrong. First, providing an inferior product could perhaps generate profits for the short-term, but soon the customers will realize the product is inferior and will cease buying it (e.g. end of profits, end of business). Second, without good employees, you cannot provide a superior product for your customers...which dooms your business and results in all employees losing their job. Of course there is a difference between private companies and government. But that difference, whatever it is, does not mean that government (federal, state, or local) should spend more than it receives in taxpayer money. The issue is debt. For a business, having to service a debt, or spending more than you have, always results in disaster. The same is true for government when it spends more than it receives in taxpayer money. Eventually, the debt becomes overwhelming (as well as the servicing of that debt), and the government is broke. Hello Greece. Hope that helps. Cheers!
Thatcher 10 months, 3 weeks ago
Just a reminder: http://www.usdebtclock.org/. Now tell us why government debt doesn't matter. Cheers!
buskwon 10 months, 3 weeks ago
The_AnonymusProfit, Very well said , I am voting for company A.
MikeNC 10 months, 3 weeks ago
Ah, it seems like a carpet blanket bomb in your statement, that a businessman doesn't care about the environment nor it's employees. So one is to assume from this statement, that every business man in America, is destroying the environment and having their employees live on scraps? Second thought: Barrack Obama is a politician and Romney isn't, because Barrack Obama was a community organizer before he became a Senator and Governor Romney isn't a politician because he was a businessman before becoming a Governor of a state and now is a businesman again. Lost in the Wilderness on that one. PS, Buskwon, I love your dog ! Diane
Sherwood 10 months, 3 weeks ago
Government is neither a business nor a household. And the U.S. is most certainly not anywhere near becoming Greece. How the government finances itself is fundamentally different from how households, businesses and countries within the Eurozone finance themselves. The key difference being the U.S. has a treasury and central bank that collect taxes, control borrowing costs and ensure payments on government debt and other obligations, while businesses, households and Eurozone countries rely entirely on financing from the private markets (i.e. banks) with no control over borrowing costs [Note: Of course, Eurozone countries have taxing authority. But when tax revenue falls in the case of recessions, debts and deficits go up]. Which is why the yield on T-notes is 1.63% while the yield on Greek 10 year bonds is at 26%, even though the U.S. deficit to GDP ratio is about the same as Greece's and the U.S. debt to GDP ratio is larger than Greece's.
Basically, the U.S. cannot involuntarily default on its debts, unlike households, businesses and Eurozone countries. The bond markets clearly recognize this. The only way the U.S. can default is if congress votes to default, which is politically and economically suicidal.
Of course there is inflation risk that comes with growing debt and deficits. But with unemployment of resources being relatively high at the moment, inflation is not likely to become a problem anytime soon.
Thatcher 10 months, 3 weeks ago
Sherwood-- I believe you are incorrect. That the U.S. has "...a central bank and treasury to control borrowing costs..." misses the point entirely. The central bank and treasury have only what the taxpayers pay in. Government (other than printing money) has no money until taxpayers give it to them. Controlling "borrowing costs" is determined chiefly by estimated tax receipts (no one will buy your debt unless they believe they will be repaid, based upon your long-term estimated receipts). Consider this: http://www.telegraph.co.uk/finance/comment/jeffrandall/8658888/America-can-now-only-defer-its-debt-crisis.html. Greece can no longer control its "borrowing costs" because no one will lend them money or buy their debt (chance of repayment = zero). You are correct that "(g)overnment is neither a business nor a household." Unlike a business or household, a government can borrow (for a time) without regard to on-hand money (tax receipts available), or anticipated income. That a government can better "delay" repaying its debt (as opposed to a business or household) again misses the point: debt, whether mine, yours, or the federal government's, must be repaid. You are correct that inflation is not likely to be a problem soon, because the economy is in such a depressed state. http://www.investopedia.com/university/inflation/inflation1.asp#axzz1zcFIFw8r. I'll speak to the bond markets later, since this post is so long. Thank you for posting!. Even though we may disagree, I love economics, and I love talking shop with someone who is obviously well-versed in economic theory. Cheers!
Thatcher 10 months, 3 weeks ago
And to bring it into fuller focus about government spending, consider this: http://in.reuters.com/article/2012/07/03/stockton-bankruptcy-cause-idINL2E8I32L820120703. Most of us know instinctively that spending more than we have will lead to trouble. The city of Stockton, California, is now experiencing this economic reality. It is bankrupt. And Sherwood, there was a time (years ago) that Stockton was able to control/manage its borrowing costs. Not anymore. Bankrupt.
The_AnonymusProfit 10 months, 3 weeks ago
Sherwood your joking right? You don't actually believe that do you?