The myth of the business expert

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

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It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders.

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There is an ongoing myth that America is a business and the best people to run America are business experts.

But America is not a business. Not even close. America is the opposite of business.

To begin, the American government is Monetarily Sovereign. Businesses are monetarily non-sovereign.  And that makes all the difference.

Our Monetarily Sovereign government:

Never can run short of its own sovereign currency
Creates money by the act of spending
Cannot go bankrupt
Has no need for income or for profits
Creates all the laws by which it operates
Exists to benefit the populace

By contrast, a business:

Can run short of money
Does not create money by spending
Can go bankrupt
Needs income and profits to survive long term
Operates under the laws of its governments
Exists to benefit its owners

In short, nothing can be more different from a government than a business. In so many ways, they are opposites.

What works for one, fails for the other.

Think about it. Being a good parent is a closer approximation to running a government than is being a good businessman. 

Yet the myth persists that government is like business, and businessmen make good politicians.

The GOP’s cult of the businessman
By James Pethokoukis

Republican skepticism of experts — especially economists, climatologists, and Ivy League professors — has its limits. Military experts get a pass. So do supposed experts in running a business.

You can see that latter point in the CEO-heavy Trump administration, which features a rather novel combination of business acumen and government amateurism.

If every Trump nominee gets congressional approval, notes Pew Research his team will have more “businesspeople with no public-sector experience than have ever served in the Cabinet at any one time.”

You see, much as GOPopulists hate elites in general, they’re very willing to tolerate (or even celebrate) multi-billionaire elites as long as they’ve cut a paycheck. Cultural elites bad. Financial elites good.

For many of today’s Trumpublicans, America’s best and brightest are found almost exclusively in the private sector, such as the Wall Street “killers” whom Trump argues are needed to negotiate better trade deals on behalf of the U.S.

The practical knowledge that big business bosses supposedly have is what’s needed to turn around America. Only they — and Trump most of all, of course — understand the deep magic that made America great in the past and surely will again soon.

In a recent op-ed, the Manhattan Institute’s Diana Furchtgott-Roth (said):

Trump has named a talented team to improve the economy. These individuals have been successful in their own fields — far more successful than the average economist. … Take Wilbur Ross, for example, who has been nominated for commerce secretary. Ross has turned around many companies, and has a net worth of about $2.5 billion to show for it.

Practically no economist is a multi-billionaire. That’s the kind of person that is needed to turn around the American economy, not someone who writes academic articles in scholarly journals.

And it is utter hogwash.

The choice is not between billionaires and economists. The choice is between people who have knowledge and experience, power, and motivation vs. people who have none.

Consider a baseball team. It may have a surface resemblance to a nation insofar as it competes with other teams (other nations) and the important foundations of its strength are the players coming up from its farm system (analogous to Gross Domestic Product) and its trade deals (player trades).

But running a baseball team is completely different from running a nation.

Knowledge and experience: Would you hire billionaire Wilbur Ross to manage the Chicago Cubs, or would you search for an experienced and successful baseball man?

Would you hire a sleepy neurosurgeon to head up your farm system? Would that be your first choice? It was Trump’s.

Would one of Trump’s many billionaire banksters be a better choice, or would the Cubs have more success with the likes of Theo Epstein,  Jed Hoyer, and Joe Maddon, all of whom have previous experience winning the World Series?

If you have done any hiring for any job in business, aren’t you looking for knowledge and experience?

Power: In most cases, an owner or CEO of a business has total control over his business. His decisions are made by fiat. CEOs are accustomed to that.

By contrast, even the President of the United States must deal with Congress and state governors. Constitutionally, a President’s power is limited, and his cabinets power is limited even more. Billionaires are not accustomed to being limited and second-guessed.

Experienced politicians continually must create alliances, and make compromises. CEOs don’t want to, or know how to, do that. It’s completely against their nature.

Motivation: A business CEO is motivated by profit: His company’s profit and particularly his own.  Billionaires have spent their entire lives trying to enrich themselves.

But an Attorney General, an Interior Secretary, a Treasury Secretary, a Secretary of State, etc. should have no personal profit motive. Their motive should be to do what is best for the populace.

The realities of government require inter- and intra-party negotiation and the ability to create, sell, and execute plans to benefit your constituency. Donald Trump has no government experience, and he has hired a group of people having even less experience.

My prediction: The next four years will be chaotic, with Trump making conflicting statements, and jumping from idea to idea, day by day.

His people, having no discernable direction, will make equally conflicting decisions.

Eventually, Congress will spend all its time trying to justify confusion, while also justifying what passes for party philosophy (which seems to be more guns, more religion, and especially more benefits for the rich, and fewer benefits for the non-rich).

It won’t be right-wing. It won’t be left-wing. It will be mixed-up-wing.

And pitiful Kellyanne Conway will try to BS her way through the mess by increasingly offering today’s latest “alternative facts” that contradict yesterday’s “alternative facts,” until even she won’t  remember what she said previously.

And America, especially the middle-classes and the poor, will suffer.

Bottom line: Government experience is of almost no value when trying to run a business, and business experience is of almost no value when trying to run a government.

The moral of the story: If you want an important job done, hire someone who has proven he knows how to do the job.

Don’t hire a pediatrician to do your plumbing.

Simple?

Rodger Malcolm Mitchell
Monetary Sovereignty

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ECONOMICS LAWS

•Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.

•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money.

•The more federal budgets are cut and taxes increased, the weaker an economy becomes.

•No nation can tax itself into prosperity, nor grow without money growth.

•Cutting federal deficits to grow the economy is like applying leeches to cure anemia.

•A growing economy requires a growing supply of money (GDP = Federal Spending + Non-federal Spending + Net Exports)

•Deficit spending grows the supply of money

•The limit to federal deficit spending is an inflation that cannot be cured with interest rate control. The limit to non-federal deficit spending is the ability to borrow.

•Until the 99% understand the need for federal deficits, the upper 1% will rule.

•Progressives think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.

•The single most important problem in economics is the Gap between the rich and the rest.

•Austerity is the government’s method for widening   the Gap between the rich and the rest.

•Until the 99% understand the need for federal deficits, the upper 1% will rule.

•Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest.

MONETARY SOVEREIGNTY