Michele Flournoy is Annoying

There, I said it. I know every likes to pretend she’s a great thinker. And I know she’s likely to be the first woman Secretary of Defense. But I literally have never heard her say anything insightful. She’s just a straight-line proponent of conventional wisdom. She has an op-ed in the Washington Post today bashing “outmoded government.” She writes:

The second wrong move would be making deep cuts in government spending without fundamentally rethinking and transforming how government does business. While the federal government has a dedicated workforce that provides a number of essential functions and services to taxpayers, no one would argue that it is a model of efficiency or effectiveness. Indeed, many federal agencies and their core business practices were designed in the 1950s and 1960s. Even agencies that have gone through periods of reinvention remain years behind the private sector in terms of performance and efficiency.

In the past decade, the most competitive and successful U.S. companies have fundamentally transformed how they do business. They have adopted new strategies to cope with a more complex, dynamic and uncertain environment. Many have gone through a process of “delayering” to streamline and empower their organizations. They have leveraged new information technologies to enhance performance, agility and competitiveness while reducing cost. And they have made strategic investments in human capital and talent management to improve performance and foster the next generation of leaders.

While some federal agencies have made good-faith attempts to become more efficient, most still carry the dead weight of unnecessary overhead, outmoded business processes, infrastructure that is no longer aligned to their mission, and underperforming organizational structures.

So, um, bullshit. Anyone who has worked in government does indeed know that there are a lot of inefficiencies. There is a lot of waste and generalized stupidity. But guess what? There is even more of that in the private sector. The notion that the private sector is more efficient generally is simply not empirically supportable.

Whether the issue is health care or, say, private vs. public prisons, there is just no compelling evidence that the private sector is more generally efficient. You’d think it would be. After all, the profit motive ought to generate more efficiency, but the reality is that while corporate management has a fiduciary responsibility to shareholders or owners in principle, in practice management is just as concerned with maximizing its own rewards.

Business justify all sorts of things on “efficiency” grounds. Business class travel and corporate jets supposedly allow managers to be more rested and work on the go and so on, but really it is about comfort and prestige, not efficiency. Lavish retreats supposedly promotes better communication and teamwork, but really is mostly about getting a paid vacation. Expensive office space and furnishings are supposed to reassure clients and set a tone of quality, but really just make more enjoyable places to work. And, of course, outsized salaries for CEOs and other senior managers are supposed to be about attracting top talent, and yet are often divorced from any objective measure of performance.

The idea that the private sector is efficient and adept at cutting waste, fraud, and abuse is just one of the empty zombie concepts that VSPs mouth mindlessly. But actually demonstrating private sector efficiency turns out to be hard to accomplish, and if you actually look at the excesses of the private sector in terms of spending on luxuries and outsized senior compensation it should be pretty obvious that the claim of efficiency is largely an empty assertion.

Flournoy just came out of government. As Under Secretary of Defense for Policy, her salary as a Level III Executive Schedule was $165,300. I’m pretty willing to be she makes a heck of a lot more as a “senior adviser at Boston Consulting Group.” But BCG is, by definition, more efficient. Did she get smarter? Is she working harder now? She’s apparently generating more value added now, right? I know that is just a little gotcha, but it is the kind of thing that might make a person think a little… if they weren’t so wedded to conventional wisdom that is.

So Michele, actually, I would argue that government “is a model of efficiency or effectiveness,” at least compared with the massive systematic waste and general incompetence demonstrated by many, many entities in the private sector.

Also, too…Michele, maybe this isn’t the smartest time in the world to be mouthing Romney-Ryan-style idiocies about how outmoded the public sector is. Remember, no matter how much you kiss ass, you’re still not gonna be Sec Def in a Republican Administration.

 

109 replies
  1. 1
    schrodinger's cat says:

    Who is this person and why should I care? In econ/business school speak efficiency == cost cutting.

    ETA: Efficient does not mean that stuff will work better. MBA text books are full of such double speak. They have coined terms that mean something totally different than their meaning in plain English, case in point “Free market”.

  2. 2
    Calouste says:

    Romney and Netanyahoo are alumni of BCG. All you need to know really.

  3. 3
    Jay C says:

    The idea that the private sector is efficient and adept at cutting waste, fraud, and abuse is just one of the empty zombie concepts that VSPs [are well-paid to] mouth mindlessly.

    Fixt.

  4. 4
    Bernard Finel says:

    @schrodinger’s cat: She was Under Secretary of Defense for Policy Under Obama is is likely to be Secretary of Defense within a decade. She’s extremely influential in Democratic policy circles.

  5. 5
    Villago Delenda Est says:

    So, um, bullshit. Anyone who has worked in government does indeed know that there are a lot of inefficiencies. There is a lot of waste and generalized stupidity. But guess what? There is even more of that in the private sector. The notion that the private sector is more efficient generally is simply not empirically supportable.

    THIS THIS THIS

    It’s pure bullshit. In the private sector, it’s worse, because of the utter stupidity of the MBA mindset, which is to maximize sacred profit based on short term outcomes. Which disregards the value of long term investment in even better outcomes down the road, and unexpected outcomes that can’t be predicted.

    Hell, CEOs are REWARDED for fraud, waste, and abuse if the right people benefit from it financially.

    Adam Smith would beat these idiots like red-headed stepchildren if he were around.

  6. 6
    Chyron HR says:

    @schrodinger’s cat:

    Who is this person and why should I care?

    She’s Michele Fluoride, man! Haven’t you seen all those articles here extolling her many virtues? Everyone in the comments here likes to pretend she’s a great thinker, you know–Bernard Finkel assures me that this is the case.

  7. 7
    schrodinger's cat says:

    @Bernard Finel: Thanks! Do you think she will be SecDef even if she continues mouthing these Business School platitudes? I know the MoUs of the media love
    them but is that enough?

  8. 8
    opie jeanne says:

    Oh, I see that her father was George Flournoy; was he involved in California politics many years ago?

  9. 9
    azlib says:

    We have been down this road before. Remember Al Gore’s “reinventing government” initiative in the 90s? It was probably a very useful program and likely did reduce inefficiencies in the bureaucracy. It did not give any political cover. The Repubs still hate government in any form (except DoD), regardless of efficiency.

    The biggest waste in government is when Congress lards up appropriations bills with their pet and unneeded projects. Think of the weapons we have built which the Pentagon did not want? Makes any bureaucratic lethargy tiny in comparison.

  10. 10
    burnspbesq says:

    really it is about comfort and prestige, not efficiency

    Bullshit. You try writing a brief while sitting in a coach seat when the person in front of you cranks his/her seat all the way back 30 seconds after takeoff.

    Your narrow frame of reference doesn’t scale.

  11. 11
    Cassidy says:

    I think this whole notion of efficiency is funny. I’ve recently started going back to school and I’m using my GI Bill. Now, the vet office at the school ahs 30 days to turn in my paperwork and the regional office has 30 days to respond, so it could take 60 days for the living stipend to kick in once I start (and it’ll be back paid in a lump sum). I know what to look for and how long is too long. When does a private company ever offer that?

  12. 12
    c u n d gulag says:

    All “privatization” is, is a grift to take public tax money and redistribute it into the private pockets of politicians and their cronies for the future profits of both.

    Any benefit to the public is purely accidental.
    And will not be repeated if it can be helped – since that benefit ate into the profits.

    Maybe someone can tell me ONE government program that was cheaper/more efficient, when privatized?

    I can’t think of any off the top of my head.

  13. 13
    joes527 says:

    OT: What is it about this site lately that is drawing so much adjustable cleavage?

  14. 14
    Mark S. says:

    Have you noticed how our military has become so much more efficient and effective since we started outsourcing large portions of it to defense contractors? I haven’t.

  15. 15

    The notion that the private sector is more efficient generally is simply not empirically supportable.

    Ten years working for a telecom has given me all the anecdata I need to agree with this. I believe efficiency is more related to the size of an organization than anything else.

  16. 16

    @joes527: OT: What is it about this site lately that is drawing so much adjustable cleavage?

    If you’re referring to the ads, I’m not seeing it. Ad displays are calibrated to your own browsing history. ^_^

  17. 17
    gene108 says:

    In the past decade, the most competitive and successful U.S. companies have fundamentally transformed how they do business.

    Businesses have adapted because they outsource non-core functions to the lowest bidder, such as janitorial, administration, some accounting or HR functions, whether the job is done in the USA or India or the Philippines, it doesn’t matter; businesses are no longer going to carry the employee cost of functions that don’t add value.

    What functions in the Federal government do not add value? How do you measure value from a government entity?

    In business it’s what contributes to the bottom line. Unfortunately we don’t run our government to make profits above all else.

    They have adopted new strategies to cope with a more complex, dynamic and uncertain environment.

    Businesses compete with each other. Who does the U.S. government compete with?

    What is uncertainty at the government level? We’ll be invaded by Canada again, as the Canucks celebrate their 200th anniversary of burning down the White House?

    Government, at any level, by default has a monopoly on being the government at that level. There’s no way you can have two governments competing with each other at the same level of government, i.e. no two mayors in Mayberry, NC or more importantly two sheriffs, enforcing different laws in the same town because there are governments competing with each other.

    Many have gone through a process of “delayering” to streamline and empower their organizations. They have leveraged new information technologies to enhance performance, agility and competitiveness while reducing cost. And they have made strategic investments in human capital and talent management to improve performance and foster the next generation of leaders.

    Empty babble. You get hammered hard in business school to not fall back on cliches.

    Anyway, I wonder what here positives are that have gotten her such a successful career? Clearly it’s not writing op-eds.

  18. 18
    H. Dumpty says:

    Profit itself is an inefficiency when we’re talking about public functions.

  19. 19
    joes527 says:

    @burnspbesq: yeah well, despite your “I’m in business class because I’m an important person” bullshit, there are plenty of proles in cattle class who are working just as hard (or harder) than you during the flight. (and yes, it _does_ suck to try to work under those conditions, but that doesn’t change the deadline)

  20. 20
    BGinCHI says:

    @burnspbesq: If this is snark, it’s about as funny as the Liverpool – WBA match.

  21. 21
    AkaDad says:

    In the past decade, the most competitive and successful U.S. companies have fundamentally transformed how they do business.

    Government isn’t a business.

  22. 22
    jwb says:

    @Villago Delenda Est: Broadly speaking, you can say that the private and public sectors value different things and work to maximize what they value. That formulation is certainly too monolithic in that not even all private firms value things in the same way (a sole proprietor business is different from a large family owned business is different from a publicly traded corporation, etc.) and the same is doubtless true on the public side. But I would take the point to be that we can’t presume that the same thing should (or even can) be valued and maximized by all concerns as that would itself lead to vast social inefficiencies.

  23. 23
    BGinCHI says:

    If business ran more like the government we could limit executive salaries and ensure that there was some transparency in financial matters.

    All profits could go to infrastructure and the social safety net.

  24. 24
    Lee says:

    As someone who works in a $2B dollar company and gets to see all sorts of accounting information.

    Yeah any idea the private sector is not inefficient is complete bullshit.

  25. 25

    OT: A little story of compassion and human-kindness to get you through the day =). It turns out that people don’t all suck. =)

    http://www.edgeonthenet.com/ne.....ar_repairs

  26. 26
    Villago Delenda Est says:

    @jwb:

    Money isn’t the most important fucking thing in the world. Sunshine and kittens are important to people other than Dubya Mitt Rmoney, as important to them as his precious lucre is.

  27. 27
    gene108 says:

    @azlib:

    The Repubs still hate government in any form

    I think what they really hate is government, since the New Deal, has helped poor and middle class people, instead of putting its resources behind helping rich people get richer.

  28. 28
    Villago Delenda Est says:

    @jwb:

    Money isn’t the most important fucking thing in the world. Sunshine and kittens are important to people other than Dubya Mitt Rmoney, as important to them as his precious lucre is.

  29. 29
    Dave S. says:

    I like how, in the middle of a particularly thick nothingburger, the consultant writer implies that the job of reinventing government can’t be done without, you know, consultants.

    These are people who don’t mind if the door hits them in the ass on the way out, because it’s a revolving one.

  30. 30
    Mnemosyne says:

    I’m not going to badmouth modernizing government offices and making them more efficient. It is SO much better to be able to renew my car registration directly from my home computer than it was to have to stand in line at the DMV for two hours so I could hand them a check.

    But the focus should be on ways in which public agencies can modernize and make themselves more efficient, not how they can all be replaced with private companies. We’ve been doing that for 20 years with very little improvement, so it’s time to put the focus back on the public agencies and how to help them do their work better rather than trying to take that work away.

  31. 31
    Villago Delenda Est says:

    @jwb:

    Money isn’t the most important fucking thing in the world. Sunshine and kittens are important to people other than Dubya Mitt Rmoney, as important to them as his precious lucre is.

  32. 32
    BGinCHI says:

    If business ran more like the government we could limit executive salaries and ensure that there was some transparency in financial matters.

    All profits could go to infrastructure and the social safety net.

  33. 33
    Mnemosyne says:

    I’m not going to badmouth modernizing government offices and making them more efficient. It is SO much better to be able to renew my car registration directly from my home computer than it was to have to stand in line at the DMV for two hours so I could hand them a check.

    But the focus should be on ways in which public agencies can modernize and make themselves more efficient, not how they can all be replaced with private companies. We’ve been doing that for 20 years with very little improvement, so it’s time to put the focus back on the public agencies and how to help them do their work better rather than trying to take that work away.

  34. 34
    Villago Delenda Est says:

    @jwb:

    Money isn’t the most important fucking thing in the world. Sunshine and kittens are important to people other than Dubya Mitt Rmoney, as important to them as his precious lucre is.

  35. 35
    Dave S. says:

    I like how, in the middle of a particularly thick nothingburger, the consultant writer implies that the job of reinventing government can’t be done without, you know, consultants.

    These are people who don’t mind if the door hits them in the ass on the way out, because it’s a revolving one.

  36. 36
    Mnemosyne says:

    I’m not going to badmouth modernizing government offices and making them more efficient. It is SO much better to be able to renew my car registration directly from my home computer than it was to have to stand in line at the DMV for two hours so I could hand them a check.

    But the focus should be on ways in which public agencies can modernize and make themselves more efficient, not how they can all be replaced with private companies. We’ve been doing that for 20 years with very little improvement, so it’s time to put the focus back on the public agencies and how to help them do their work better rather than trying to take that work away.

  37. 37
    BGinCHI says:

    If business ran more like the government we could limit executive salaries and ensure that there was some transparency in financial matters.

    All profits could go to infrastructure and the social safety net.

  38. 38
    Redleg says:

    This is the kind of stuff we’re teaching in B-School but even us management professors don’t believe that most companies are doing these things.

    A funny thing about it is that the authoritarian leader so favored by Republicans would be ineffective in bringing about the kind of culture change that Flournoy raves about.

  39. 39
    Villago Delenda Est says:

    @jwb:

    All depends on what you value, does it not?

    The modern corporate mentality is that the only thing that is valued is money. Nothing else even comes close. Make a pile and get out before the prosecutors show up.

  40. 40
    Redleg says:

    This is the kind of stuff we’re teaching in B-School but even us management professors don’t believe that most companies are doing these things.

    A funny thing about it is that the authoritarian leader so favored by Republicans would be ineffective in bringing about the kind of culture change that Flournoy raves about.

  41. 41
    jayjaybear says:

    Is it just me, or could you play a mean game of Business Buzzword Bingo with that excerpt?

  42. 42
    Villago Delenda Est says:

    @jwb:

    All depends on what you value, does it not?

    The modern corporate mentality is that the only thing that is valued is money. Nothing else even comes close. Make a pile and get out before the prosecutors show up.

  43. 43
    Redleg says:

    This is the kind of stuff we’re teaching in B-School but even us management professors don’t believe that most companies are doing these things.

    A funny thing about it is that the authoritarian leader so favored by Republicans would be ineffective in bringing about the kind of culture change that Flournoy raves about.

  44. 44
    Villago Delenda Est says:

    @jwb:

    All depends on what you value, does it not?

    The modern corporate mentality is that the only thing that is valued is money. Nothing else even comes close. Make a pile and get out before the prosecutors show up.

  45. 45
    jayjaybear says:

    Is it just me, or could you play a mean game of Business Buzzword Bingo with that excerpt?

  46. 46
    Villago Delenda Est says:

    OK, FWYP is having another one of its “Let’s make multiple copies of posts!” moments.

  47. 47
    Amanda in the South Bay says:

    @burnspbesq:

    You have such a difficult and demanding life.

  48. 48
    Dennis SGMM says:

    Fuck me; after reading Flournoy’s tripe it’s easy to see why Ryan is so highly regarded in some circles. She takes the most verbose possible way to state that apples are superior to oranges so oranges should be replaced.

    If she ever does get to be SecDef I can see a repeat of the Robert MacNamara debacle.

  49. 49
    Villago Delenda Est says:

    OK, FWYP is having another one of its “Let’s make multiple copies of posts!” moments.

  50. 50
    Villago Delenda Est says:

    OK, FWYP is having another one of its “Let’s make multiple copies of posts!” moments.

  51. 51
    danimal says:

    A related thought: Government is often inefficient by design. To tie in to one of the topics du jour, the welfare rules issued by GW Bush regime are an administrative nightmare, full of wasteful and duplicative tracking requirements along with burdensome paper-pushing in the extreme.

    The focus of states is on compliance with bureacratic benchmarks (work participation rates, in this case) at the expense of fulfilling the mission of the program: to safeguard families. Have you wondered why welfare rolls stayed static in the midst of the worst recession in 80 years? Because states have to meet standards or lose funding, and the easiest way to do so is cut anyone not meeting work requirements from the rolls ASAP.

    And to put a big, frickin’ cherry on top, Obama administrative edicts to cut through the welfare red tape lead to biggest race-baiting whopper of a lie in this presidential campaign.

  52. 52
    Villago Delenda Est says:

    OK, FWYP is having another one of its “Let’s make multiple copies of posts!” moments.

  53. 53
    BGinCHI says:

    Sorry for duplicate posts. Site was wonky.

  54. 54
    TMLutas says:

    In the mid 1990s we were supposed to get an ATC upgrade from the FAA so we could handle next generation demands like, oh, flying cars. We still are awaiting that upgrade. Being able to do commutes through a volume instead of along limited surface arteries is a big quality of life upgrade for everybody and we don’t have it.

    The same organization (the FAA) is still in charge of the process 20 years past their first blown deadline. That wouldn’t happen in the private sector because investors would flee, the stock price would tank, and somebody else would take over the company. But you are just missing that mechanism in government unless you want to have a revolution, a notoriously more difficult endeavor and one that generates a lot more waste than hostile M&A.

    Private sector efficiency gains aren’t spectacular. They might be 2-3% a year on average. The problem is that public sector efficiency gains are 1-2% a year on average. Over time, private provision gets better at faster rates and so slowly it makes more sense to move things over to private provision. Over the course of a century it’s a very big difference over an entire economy though in short time frames and in certain sectors, you might not be able to spot it at all.

  55. 55
    TMLutas says:

    In the mid 1990s we were supposed to get an ATC upgrade from the FAA so we could handle next generation demands like, oh, flying cars. We still are awaiting that upgrade. Being able to do commutes through a volume instead of along limited surface arteries is a big quality of life upgrade for everybody and we don’t have it.

    The same organization (the FAA) is still in charge of the process 20 years past their first blown deadline. That wouldn’t happen in the private sector because investors would flee, the stock price would tank, and somebody else would take over the company. But you are just missing that mechanism in government unless you want to have a revolution, a notoriously more difficult endeavor and one that generates a lot more waste than hostile M&A.

    Private sector efficiency gains aren’t spectacular. They might be 2-3% a year on average. The problem is that public sector efficiency gains are 1-2% a year on average. Over time, private provision gets better at faster rates and so slowly it makes more sense to move things over to private provision. Over the course of a century it’s a very big difference over an entire economy though in short time frames and in certain sectors, you might not be able to spot it at all.

  56. 56
    TMLutas says:

    In the mid 1990s we were supposed to get an ATC upgrade from the FAA so we could handle next generation demands like, oh, flying cars. We still are awaiting that upgrade. Being able to do commutes through a volume instead of along limited surface arteries is a big quality of life upgrade for everybody and we don’t have it.

    The same organization (the FAA) is still in charge of the process 20 years past their first blown deadline. That wouldn’t happen in the private sector because investors would flee, the stock price would tank, and somebody else would take over the company. But you are just missing that mechanism in government unless you want to have a revolution, a notoriously more difficult endeavor and one that generates a lot more waste than hostile M&A.

    Private sector efficiency gains aren’t spectacular. They might be 2-3% a year on average. The problem is that public sector efficiency gains are 1-2% a year on average. Over time, private provision gets better at faster rates and so slowly it makes more sense to move things over to private provision. Over the course of a century it’s a very big difference over an entire economy though in short time frames and in certain sectors, you might not be able to spot it at all.

  57. 57
    TMLutas says:

    In the mid 1990s we were supposed to get an ATC upgrade from the FAA so we could handle next generation demands like, oh, flying cars. We still are awaiting that upgrade. Being able to do commutes through a volume instead of along limited surface arteries is a big quality of life upgrade for everybody and we don’t have it.

    The same organization (the FAA) is still in charge of the process 20 years past their first blown deadline. That wouldn’t happen in the private sector because investors would flee, the stock price would tank, and somebody else would take over the company. But you are just missing that mechanism in government unless you want to have a revolution, a notoriously more difficult endeavor and one that generates a lot more waste than hostile M&A.

    Private sector efficiency gains aren’t spectacular. They might be 2-3% a year on average. The problem is that public sector efficiency gains are 1-2% a year on average. Over time, private provision gets better at faster rates and so slowly it makes more sense to move things over to private provision. Over the course of a century it’s a very big difference over an entire economy though in short time frames and in certain sectors, you might not be able to spot it at all.

  58. 58
    👽 Martin says:

    Governments first job isn’t to be efficient, it’s to be effective. Government needs to serve everyone, not just the people that make the minimax analysis cutoff. Government doesn’t have the privilege of saying “Those citizens out on Little Diomede Island Alaska, we’re not going to serve them because that would be inefficient.” The free market will do that in a heartbeat, though.

    Again, it comes down to the very definition of a free market: In a free market, both consumer and supplier has the freedom to opt out of the market entirely. Anyone who is advocating that the government should behave more like the free market is effectively advocating that they have the power to delegitimize citizenship for people that they don’t think are worth serving. Not surprisingly, that’s the core of their very argument with respect to voting rights.

    Yeah, government can be more efficient, but part of the reason why efficiency is hard to achieve is because the difficult edge cases can’t be discarded.

  59. 59
    Dennis SGMM says:

    After reading Flournoy’s tripe it’s easier to see why Ryan is so highly regarded in some circles. Should anyone be foolish enough to appoint her SecDef I predict a repeat of the Robert MacNamara debacle.

  60. 60

    […] Bernard Finel calls “bullshit”:  Anyone who has worked in government does indeed know that there are a lot of inefficiencies. There is a lot of waste and generalized stupidity. But guess what? There is even more of that in the private sector. The notion that the private sector is more efficient generally is simply not empirically supportable. […]

  61. 61
    Haydnseek says:

    @opie jeanne: Perhaps you’re thinking of Houston Flournoy. He was a player in California in the 60’s and 70’s.

  62. 62
    mamayaga says:

    Funny how there seem to be so many truisms like “private enterprise is more efficient than government” that are 100% untrue, but contradictions are somehow are never allowed into public discourse. One aspect of private enterprise inefficiency that needs a lot more attention is the amount of fraud and corruption involved. In my working life I got to see the top levels of both public and private health systems up close, and the amount of skimming and outright fraud in the private sphere was breathtaking. The worst corruption I saw in public health care was pressure to hire some politician’s brother, who might not have been the best person for the job but at least was expected to show up and actually work. In private health care it was normal to see the top execs taking trips to the Caymans every six months to visit the money they’d skimmed from their operations. To a large extent it was our money, because those systems were being kept afloat by Medicare.

  63. 63
    TMLutas says:

    In the mid 1990s we were supposed to get an ATC upgrade from the FAA so we could handle next generation demands like, oh, flying cars. We still are awaiting that upgrade. Being able to do commutes through a volume instead of along limited surface arteries is a big quality of life upgrade for everybody and we don’t have it.

    The same organization (the FAA) is still in charge of the process 20 years past their first blown deadline. That wouldn’t happen in the private sector because investors would flee, the stock price would tank, and somebody else would take over the company. But you are just missing that mechanism in government unless you want to have a revolution, a notoriously more difficult endeavor and one that generates a lot more waste than hostile M&A.

    Private sector efficiency gains aren’t spectacular. They might be 2-3% a year on average. The problem is that public sector efficiency gains are 1-2% a year on average. Over time, private provision gets better at faster rates and so slowly it makes more sense to move things over to private provision. Over the course of a century it’s a very big difference over an entire economy though in short time frames and in certain sectors, you might not be able to spot it at all.

  64. 64
    Maude says:

    I stopped reading after government conducts business. Government doesn’t conduct business, Michele, it governs.
    The deserter had an MBA, lest we forget. How’d that work out Michele?
    Think before you open your mouth.
    Efficiency also made the trains run on time in Italy. Fascism is efficient.
    This blathering by her was offensive.

  65. 65
    jwb says:

    @Villago Delenda Est: I think we agree, and if the only thing maximized was short term profit, we’d have a very cruel and so also very socially inefficient world.

  66. 66
    Nina says:

    The Idiot Nephew test shows clearly that private enterprise is less efficient than government service. In the government you run into fairly strict rules if you’re in charge of a department and try to hire your idiot nephew to do anything. In private industry, he’ll end up as your VP in charge of Marketing and hire all his idiot friends.

  67. 67
    Roger Moore says:

    @Mnemosyne:

    But the focus should be on ways in which public agencies can modernize and make themselves more efficient, not how they can all be replaced with private companies.

    Also, too, it should be about how they can provide their services more efficiently, not how they can eliminate services that are useful but not efficient by private sector standards. The USPS is losing money on rural service relative to big cities, but that doesn’t mean we should cut rural areas off to make the Post Office more efficient.

  68. 68
    danimal says:

    FYWP, which ate my lengthy thoughts. My main point is that govermnent is often inefficient by design. The welfare rules instituted by GW Bush are a hopeless mess of bureacratic nonsense, which have been counter-productive to the mission of giving families some economic security.

    Efforts to consider streamlining the system have led to the biggest race-baiting lie of the presidential cycle, because have a fouled-up welfare system is a feature, not a bug.

  69. 69
    Cassidy says:

    @TMLutas: Flying cars? Really? That’s your example of gov’t inefficiency? I must not be understanding you and the snark is flying past me.

  70. 70
    Cassidy says:

    @TMLutas: Flying cars? Really? That’s your example of gov’t inefficiency? I must not be understanding you and the snark is flying past me.

  71. 71
    Calouste says:

    @gene108:

    Government, at any level, by default has a monopoly on being the government at that level. There’s no way you can have two governments competing with each other at the same level of government, i.e. no two mayors in Mayberry, NC or more importantly two sheriffs, enforcing different laws in the same town because there are governments competing with each other.

    You can have two governments competing which each other at the same level. It’s commonly called “war”.

  72. 72
    joes527 says:

    @TMLutas:
    @TMLutas:
    @TMLutas:
    @TMLutas:
    @TMLutas:

    Not to mention how efficient wordpress has been at fixing their bugs. PRIVATE SEKTOR RULZ!

  73. 73
    Culture of Truth says:

    And they have made strategic investments in human capital and talent management to improve performance and foster the next generation of leaders.

    Yeah, I totally see the GOP pushing for this.

  74. 74
    Villago Delenda Est says:

    @Maude:

    Efficiency also made the trains run on time in Italy. Fascism is efficient.

    That’s one of the great myths of fascism, though. Although Mussolini got the trains to run on time, look at Schindler’s List, which gives you a better picture of the selective efficiency of fascism. There was fraud, waste and abuse all over the place in Nazi Germany, and some profited handsomely from it, as Oskar Schindler did. Then he blew all his ill gotten gains on bribes to save as many of those subject to extermination as he could…and bemoaned the fact he didn’t do even more to save more.

    Nazi Germany was selectively efficient about some things, and fabulously wasteful in others. Ultimately, the waste (and the selective efficiency) did them in. Which was a good thing for the rest of the planet.

  75. 75
    jwb says:

    @danimal: It all depends by what you mean by “inefficient.” That arrangement is very efficient at producing governmental inaction and talking points for the GOP about the messed up welfare system. The cynic in me says that it is doing its intended work very efficiently indeed.

  76. 76
    Maude says:

    @danimal:
    My brilliant comment was eaten.
    Clinton’s welfare reform did a lot of harm to poor people. he locked the doors to get out of poverty. Bush, MBA, just followed along.
    Efficiency leads to totalitarianism. (Look at that word I spelled right the first time)

  77. 77
    Caz says:

    Wow, you really are totally ignorant about the free market and the private sector, aren’t you? You don’t have the slightest clue about efficiency or the differences between private and public sectors. You don’t even know what to make of private sector perks and bonuses, lol. You need to study up on free market stuff because right now you are totally clueless.

  78. 78
    Villago Delenda Est says:

    @Caz:

    Get back to me, maggot, after you’ve read The Wealth of Nations.

    You have no fucking clue how any of this works.

  79. 79
    Caz says:

    @BGinCHI: Why should we, as a society, endeavor to limit executive salaries and bonuses?? What business is it of yours if a private company wants to pay its executives a million bucks?

  80. 80
    Caz says:

    @Villago Delenda Est: I know exactly how it works. It seems like most people on this site don’t know how it works, which is why you all keep supporting expanding govt and redistribution of wealth and class warfare.

  81. 81
    Villago Delenda Est says:

    @Caz:

    No you don’t. You know (and cheer on) the rigged game. An actual free market, with the sort of checks and balances Smith envisioned, terrifies corporate America and rentier thieves like Dubya Mitt Rmoney.

  82. 82

    @Caz:
    How about you explain to us how some Anointed Son who sits at a desk between bouts of golf supposedly generates more shareholder value than 100+ line workers?

  83. 83
    Jennifer says:

    The notion that the private sector is more efficient generally is simply not empirically supportable.

    What you said.

    I worked for Harcourt school publishing for a year; as part of my job, I had a company car, laptop, cellphone, and computer projector. Every year, the textbook publishers do a “caravan” where they go from site to site around the state and invite all teachers from local districts to come view presentations of whatever program is up for state adoption that year – math, English, etc.

    Previous to working for Harcourt, I worked as an indepedent rep for 5 different companies, without the car, phone, computer, etc. I did the same caravan as an independent, only as an indepedent, I did it alone. I put together the information packets. I designed the presentation and presented it at every stop, & etc. So there was one person out on the road, doing all the stuff that needed to be done to promote the program.

    When I went with Harcourt, that all changed. Although I had been told by people who had seen all the companies present that I was the best presenter out there, Harcourt would not allow me to present. They brought in a consultant from out-of-state to do the presentations. This consultant was out there travelling for the same 10 weeks, racking up airfare, rental car fees, meals & hotel expenses every day. In addition, Harcourt insisted that I have a stable of 4 or 5 per diems to help – so every day, at least one of them, and usually 2 – 3 of them, were racking up per diem salary, mileage, meals & hotel expenses. Harcourt also felt like, for some reason, a manager needed to be present for the entire caravan. So add another person’s travel expenses & salary to the total.

    The first week out, we found out that the computer projector wasn’t working properly. We had to borrow one from one of the other companies’ reps to do our presentation, and Harcourt insisted that I ship it in for repair and rent one for use the next week. I did – the cost for rental for one week was about $500. When they shipped back the projector, it still wasn’t working properly. Off I go to rent the projector again, and so on and so forth. This went on for the entire 10 weeks, during which time I begged and pleaded multiple times to just be allowed to go buy a new one. New projectors at that time were running about $700 – or less than the cost to rent one for 2 weeks. Over and over my request was turned down. The whole thing came to a head towards the end of the 10 weeks – my projector had been shipped back and once again was not working properly. The problem this time was that the folks who usually had let us borrow had to go on to another place 2 hours away as soon as they finished their presentation – in order for us to borrow the projector, I would have to take it back to them, 2 hours away (and out of MY way) as soon as we were done with it – when I had to be on the opposite side of the state the next morning. So to cover the “efficiency” of not buying a new projector, Harcourt was going to add 4 hours of my time driving to drop this thing off and then get to home late at night so I could get up early the next day and get to where I needed to be the next day. I just said, NO, I’m not going to do that; it’s one thing for the company to piss away money on rentals for weeks on end, but they’re not going to dump all this stress on me because they won’t just accept that this thing needs to be replaced. The consultant had a frickin’ cow, said she wasn’t going to present without a projector. I said, fine, I’ll do it; I don’t NEED a projector to do it anyway. As it turned out, in this town I managed to find one to rent for $25 for the day, which averted the issue. But still…by the time this thing ended, Harcourt had spent $3500 on renting projectors and additional on mailing the crappy old one back and forth for 10 weeks, when a new one could have been had for $700, for a net loss of over $2800. I’m pretty sure it had something to do with tax depreciation or some other arcane bullshit; I can tell you it didn’t have DICK to do with “efficiency.” For that matter, I later figured out what it had cost me to do a 10 week caravan as an independent, vs. what Harcourt had spent – when I was calling the shots as an independent, it ran about $2000 for the 10 weeks; adjusting for higher gas prices it might have run $3000. Harcourt spent over $50,000, and the end result? They had fewer district adoptions than I did working as an independent. That was due in part to the program and to other companies bribing districts with promises of free laptops, etc., and also, Harcourt priced their product at 6 times higher than what I had sold…but I’m sure when all was said and done, their profit wasn’t much if any greater than it was for the publishers I had represented as an independent.

    When people talk about the “efficiency” of private business, it’s got nothing to do with doing things in a way that makes the most sense at the lowest cost, and everything to do with accounting tricks. Big companies like Harcourt pissed millions of dollars away every year doing the type of crap outlined above, though I’m sure in some way they accrued a tax benefit in terms of not paying any by playing those games. If it meant offloading time needlessly wasted onto an employee to make it look good on the books, they didn’t give a shit, because from their perspective, your salary was already worked into the equation so they felt free to waste however much of your time they needed to make it “work” on the accounting side.

    Here’s how this story ends: Harcourt gobbled up Houghton Mifflin and all of its holdings (or vice-versa; I have a hard time keeping up with who owns who these days) sometime in 2006 or 2007, after I had left the company. When the financial crisis of 2008 rolled around, they were so larded with debt that they had to lay off over 700 employees – including a lot of their reps and consultants – because they couldn’t afford them. Since then I think they’ve sold off a few pieces of the company in order to stay afloat, and have re-hired some of the folks they let go (even when it came to the layoffs, they made really bad decisions which again, had nothing to do with “efficiency”).

    There’s no such thing as “efficiency” in any recognizable meaning of the word at any large corporation. It’s all about cooking the books – THAT’S what they mean when they say “efficiency.”

  84. 84
    Maude says:

    @Villago Delenda Est:
    I read the book and it was excellent.
    There’s seems to be something missing when fascism takes hold of a country. They get stupid in some respects.
    Eisenhower didn’t swallow the line, we didn’t know.
    There was a great little documentary about the Germans being made to come to one of the camps before they cleaned it up. The narrator intoned, and this is approximate, the victims were skin and bones, the Germans were well, fed and well dressed. It was devastating.
    I saw one of the camps some time ago. What struck me was that there were wildflowers all over the ground. The Earth didn’t remember.

  85. 85
    uptown says:

    I would argue that the government is a model of efficiency and effectiveness compared to many large businesses.

    I’ve had to deal with the estate of a family member who passed away recently. Of all the financial organizations I’ve had to deal with, only Social Security managed to make the changes without me calling them. The large non-profit firm managed to get the paperwork out within days of me calling. The 2 large, well known, private investment companies – they sucked. I had to call them a second time after no paperwork showed up, and they couldn’t tell me why nothing was sent.

    Moral of the story – private businesses are only efficient at sucking money out of your bank account.

  86. 86
    Mnemosyne says:

    @Roger Moore:

    Also, too, it should be about how they can provide their services more efficiently, not how they can eliminate services that are useful but not efficient by private sector standards. The USPS is losing money on rural service relative to big cities, but that doesn’t mean we should cut rural areas off to make the Post Office more efficient.

    Yes, exactly. There are probably changes the Postal Service can make that would help it deliver services to rural areas more efficiently, but there is no excuse for claiming that they should stop providing services to rural areas because it’s just too darn expensive. That’s part of what the frickin’ government is for — to provide necessary services to citizens that are too expensive and/or too unprofitable for private businesses to take on.

  87. 87
    Mnemosyne says:

    @Caz:

    Why should we, as a society, endeavor to limit executive salaries and bonuses?? What business is it of yours if a private company wants to pay its executives a million bucks?

    Dude, learn to read. The whole point was that the government has standards of oversight and accountability that don’t exist for private businesses. If private businesses were forced to meet the same standards as government agencies, limiting salaries would be the very least of the changes that would have to be made.

    Of course, no one other than the voices in your head is saying that private businesses should have to meet the same standards as government agencies, but I’m sure you’ll try and steer everything in that direction to cover up the fact that you’re having trouble following the conversation.

  88. 88
    Suffern ACE says:

    She may be actually speaking of her experience working for the DOD more than anything else. But likely, she wouldn’t mind helping her current employer get some kind of “Government 3.0” consulting gigs. Cloud and Big Data, baby.

  89. 89
    Interrobang says:

    @Villago Delenda Est: To use an example more closely aligned with actual historical fact (there is a good deal of embellishment in Schindler’s List, and probably quite a bit in Schindler’s Ark, too), you can get a pretty good idea of the sort of financial shenanigans that were common in the Third Reich — and in Vichy France, and in Mussolini’s Italy — by reading Edwin Black’s IBM and the Holocaust.

    Contrary to the wingnut bumpersticker version of the book’s main premise going around (ie. that “IBM was responsible for the Holocaust”), it’s actually a meticulously-documented work detailing how amoral big businessmen and financiers collaborated with repressive governments to perpetrate corporate crimes and make themselves a couple metric shitloads of money in the process. Just the section on how IBM’s people in Europe finagled a complex “leasing agreement” which effectively moved all of IBM’s Nazi Germany profits out of Germany (where it was in locked deutschmark-only accounts which couldn’t be spent outside of Germany) to Geneva (in “neutral” Switzerland), from where it could be spread around at IBM’s discretion, is worth the hard slog through the book just for its eye-opening description of how bad and widespread corporate crime will get if greased with enough cash and look-the-other-way.

    Funnily enough, unlike the profiteers in the stories about Schindler, most of the executives from IBM and the other corporations named in Black’s book made out juuuust fine after the war.

  90. 90
    Maude says:

    @Jennifer:
    Ebooks are going to change how students get books. Barnes & Nobel will try to get a book from a publisher for a customer if the publisher does a ebook version. The traditional publishing companies shot themselves in the foot when they started to go for bottom like profit and quality stopped being important. Editors became acquisition editors. The real ones lost their jobs.

  91. 91
    Mnemosyne says:

    @Jennifer:

    There’s no such thing as “efficiency” in any recognizable meaning of the word at any large corporation. It’s all about cooking the books – THAT’S what they mean when they say “efficiency.”

    Ding ding ding. The company my husband works for is preparing itself to be sold (which is something that has happened many, many times in the years he’s worked for them) and he came home last night and said, “They’re at the stage where they start counting the paper clips.” As in, they’re trying to make the books look really attractive to prospective buyers, so they reduce every expense as low as possible to make their profits look extra high, which means the managers have to start locking up the office supplies and making employees justify every new pen or pack of Post-Its.

    Which is why, when they finally introduced the new group calendaring system that everyone had been begging them to implement for at least the last five years, they made everyone downgrade from Office 2007 to Office 2003 — they didn’t want to have to spend extra money on a reasonably up-to-date calendar system when they could get a really cheap one that will make their books look good to potential buyers.

  92. 92
    Villago Delenda Est says:

    @Mnemosyne:

    Dude, learn to read.

    This is where you had me.

    This guy has NO FUCKING IDEA how “free markets” are supposed to work. I’m sure he hates Elizabeth Warren with a passion, because one of Elizabeth Warren’s hobbyhorses is greater transparency for consumers, something that Smith would loudly applaud. Smith talks for endless pages about how the usual suspects work so hard to rig the game in their favor, in part by massive obfuscation of what is actually going on.

    This ties into Jennifer’s long (and very good) post about how “efficiency” has nothing to do with actual efficiency in many ways. It’s part of a shell game.

    One of the greatest problems with the ivory tower view of the “free market” is that it always assumes perfect intelligence, and in the real world, there is no such thing. Smith acknowledges it and takes governments to task for basically abandoning their true role in an economy, which is to assist the invisible hand in doing its job, not handcuffing it so that a privileged few can profit from it by defrauding others.

  93. 93

    @TMLutas:

    Being able to do commutes through a volume instead of along limited surface arteries is a big quality of life upgrade for everybody and we don’t have it.

    You’ve never driven in Boston, have you?

    Idiots: Now coming at you from every possible direction in 3D spacetime.

  94. 94
    Jennifer says:

    @Maude: I wouldn’t count on ebooks taking the place of texts, at least not in the very near future.

    Here’s what will happen even if they do: the cost of the book won’t go down. School publishing is pretty specialized – publishers have to meet the guidelines, or “frameworks” – state by state. Of course, they mostly write for the big markets, namely California and Texas, though with what Texas has been doing to their textbook standards, my guess is they’re either now writing for California alone, or writing a separate text for Texas and charging them out the ass for it (as they should). They end up doing patches for the rest of the states – adding supplements as needed to address a state standard here or there – and correlations for each state’s standards to illustrate how they’re meeting those standards with this year’s edition.

    The game they got into 20 some years ago was with supplements – it started out as “buy our book, and we’ll throw in the consumable workbooks for free!” As soon as everyone started doing that, it became “we’ll throw in these videos for free” or “these audiotapes” or what have you, until by the mid-2000s they were backing up an 18-wheeler full of “free” stuff the school got if they bought the books – at the low low price of $75 per student.

    Bottom line – none of the stuff was “free”; it just became an excuse for extracting more money per student. The free stuff would then sit in the supply closet in the classroom where 90% of it would never be used. As an independent selling $15 books, I used that shit against the big publishers all the time; I’d say “yeah, they tell you about all the stuff you’re getting for “free” but how much of it do you actually USE? How much of it would you ever have TIME to use? My books are $15; buy these, and use the other $60 to buy other stuff you actually NEED and have time to USE.” It worked like a charm.

    Then, of course, one of the big publishers bought the company and turned it into a clone of their bullshit with the same high pricetag and the same tractor-trailer rig full of “free” shit they didn’t want, need, or have time to use. They’re completely hooked on this model now, and there will be some version of it when the switch to ebooks finally comes, because they aren’t going to get off of that sweet, sweet gravy train.

    That’s the “efficiency” of the private market – taking your choices away from you.

  95. 95
    Ronzoni Rigatoni says:

    @Cris (without an H): Ads? There’s ads here? Damnation. I guess it’s because I zoom in to 150% to better serve my aging eyesight, but the ads no longer fit, I guess. I’ll zoom out a bit just to check.[zooms out] [zooms back in] Holy sheeit! There’s actual ads out there! Whocoodaknowd?

  96. 96
    Comrade Colette Collaboratrice says:

    They have adopted new strategies to cope with a more complex, dynamic and uncertain environment. Many have gone through a process of “delayering” to streamline and empower their organizations. They have leveraged new information technologies to enhance performance, agility and competitiveness while reducing cost. And they have made strategic investments in human capital and talent management to improve performance and foster the next generation of leaders.

    Bullshit Bingo!

  97. 97
    Suffern ACE says:

    @Comrade Colette Collaboratrice: They no longer work in departments. They work in “Centers of Excellence” which are flexible, multi-disciplinary teams focused on problem solving. They have overcome the problem of work silos! Silos! I tell you. They are gone now!

  98. 98
    Suffern ACE says:

    @Comrade Colette Collaboratrice: What makes me laugh is this notion that companies just started doing things in the past decade! It’s like companies just had telex machines until 2002 and suddenly found all this new technology that wasn’t being used. What is she, 12? Does our Government have a social media strategy yet! That’s what I wanna know.

  99. 99
    Gregory says:

    Someone’s sure to have won a Boss Buzzword Bingo card (see: Dilbert) with that op-ed.

  100. 100
    Suffern ACE says:

    @Mnemosyne: At the same time, no rationally profit maximizing enterprise would have taken on Iraq and Afghanistan and what someone around here used to call missionary democracy. No. Our government did that. Others may profit from that decision, but outsourcing that kind of decision went out of fashion with all of those India and South Seas companies.

  101. 101
    Ruckus says:

    @Jennifer:
    That’s the “efficiency” of the private market – taking your choices away from you.

    This is a very big and good point.

    It works throughout big business. You have a favorite mouthwash? Did the company that makes it get bought up by the big boys? Your favorite product may still be there but the name is changed to reflect company naming. You’ll never find it again. So you have to start all over to find a product you like. It works the same no matter the product or service(I crack myself up – service, from a big corp?)

    To an MBA (Must Be Asshole) you always cut costs for profit. Always. Cost cutting is the anthem of the MBA because costs come out of profits. Ergo remove costs, increase profits.

  102. 102
    Roger Moore says:

    @Jennifer:

    I wouldn’t count on ebooks taking the place of texts, at least not in the very near future.

    Unless the states wise up and decide to write their own. This would presumably make more sense for a big state like California, but why not have the state commission its own textbooks as a work for hire? They pay once for the cost of writing the book, and occasionally a smaller amount for the cost of updating it. The state distributes the electronic texts to the districts and leaves it up to them exactly how they choose to distribute them to the students. Districts can print beautiful, durably bound books if they think that’s a good idea. They can print cheap books that the students get to keep when the year is over if they prefer that option. They can distribute them electronically if they think that’s more economical. The thing they don’t do is pay a big copyright rent to publishing houses for the privilege.

  103. 103
    A moocher says:

    @burnspbesq: bullshit yourself. I see a lot of expensive laptops playing computer games or videos, and I see plenty of people doing real work in coach. Your sense of entitlement is what don’t scale.

  104. 104
    jefft452 says:

    @Mark S.: “Have you noticed how our military has become so much more efficient and effective since we started outsourcing large portions of it to defense contractors? I haven’t.”

    1944: US Navy “SeaBees” build an entire airbase on a piece of coral sticking a few feet out of the Pacific ocean in a few days, while under fire

    2004: KBR cant build a barracks in the middle of a modern city without electrocuting soldiers in the shower while billing for massive cost over runs

    Much more efficient and effective (at putting taxpayer cash into your cronies pockets)

  105. 105
    Jeffery Bahr says:

    @burnspbesq: Oh, Puleeze. I have written academic papers, debugged code, and graded papers in coach in similar circumstances.

  106. 106
    joel hanes says:

    The enormous Silicon Valley company at which I work now is damned efficient in many many ways.

    Other enormous Silicon Valley companies at which I’ve worked: not so much.

    For-profit companies seek to externalize costs; if they can send toxins up a smokestack or dump them in a river, they’ll do that rather than deal with them properly. If a for-profit company’s site management wrecks neighborhoods or traffic patterns, the company’s give-a-shit is limited to the effect on its bottom line.

    This is what our commenter supra means by “efficiency” — successfuly externalizing a high percentage of your costs.

    Eventually those externalized costs pile up; sometimes literally, as in SuperFund sites.

    The private sector has no solution to problems that cannot be solved profitably: Love Canal, the millions of pounds of PCBs that GE left in the Hudson, the acid-orange creeks flowing out of coal country, a hundred children dying of E. coli from contaminated meat, rural mail delivery — we have waited through the Reagan/Bush years for the brilliant private-sector solutions to these pressing problems, but no such solutions appear. Probably we just need more tax cuts and de-regulation. Sure, that’s the ticket.

  107. 107
    Maude says:

    @Roger Moore:
    I’m late back to the thread.
    I was reading forum questions to B&N and that’s how I ended up thinking about ebooks for text books. The expense of text books is awful and the traditional publishers have a stranglehold on the colleges etc.
    If B&N comes up with an ereader that is say 19 inches to be able to see graphs and charts and all that, it is possible to how have paper text books.
    It is far easier to carry an ereader than heavy books It frees states, as you say, from the publishers.
    College education is out of reach for too many people and this could help.
    I’m all for tech helping people be able to do things better.

  108. 108
    dance around in your bones says:

    I have never heard of this person before.

    I have worked in various private sector jobs that were wildly inefficient. Why people can’t recognize this is ………..bizarre.

    I guess it comes down to the tribalism thing, or that sort of ‘religious’ belief in the ‘free market’.

  109. 109
    Michelle Messing says:

    An American who deliberately adopts the affectation of spelling her name Michèle when the perfectly serviceable Michele or Michelle is the standard American form, should be treated as the dilletante that she is.

Trackbacks & Pingbacks

  1. […] Bernard Finel calls “bullshit”:  Anyone who has worked in government does indeed know that there are a lot of inefficiencies. There is a lot of waste and generalized stupidity. But guess what? There is even more of that in the private sector. The notion that the private sector is more efficient generally is simply not empirically supportable. […]

Comments are closed.