Whatever Is The Most Important to You, We Are Cutting That First

The very essence of business decision-making is prioritization and trade-offs.  The same is true in the government, its just that the objective function is reversed:

GM is warming up the propaganda engine for the next run at Congress. "Look, the first thing we had to cut was our electric car program!".

And here I thought that because GM has still, after 30 years, failed to realize their business model needs to change that maybe management there were slow learners.  But they seem to be very, very adept at learning the government game.

When I was in the corporate world, if I wanted extra funds for my projects, I would have to go in and say "Here are all my projects.  I have ranked them from 1-30 from the most to least valuable.  Right now I have enough money for the first 12.  I would like funding for number 13.  Here is my case."

But the government works differently.  When your local government is out of money, and wants a tax increase, what do they threaten to cut?  In Seattle, it was always emergency services.  "Sorry, we are out of money, we have to shut down the fire department and ambulances."  I kid you not -- the city probably has a thirty person massage therapist licensing organization and they cut ambulances first.   In California it is the parks.   "Sorry, we are out of money.  To meet our budget, we are going to have to close down our 10 most popular parks that get the most visitation."  The essence of government budgeting brinkmanship is not to cut project 13 when you only have money for 12 projects, but to cut project #1.

I can just see me going to Chuck Knight at Emerson Electric and saying "Chuck, I don't have enough money.  If you don't give me more, we are going to have to cut the funds for the government-mandated frequency modification on our transmitters, which means we won't have any product to sell next month."  I would be out on my ass in five minutes.  It just floors me that this seems to keep working in the government.  Part of it is that the media is just so credulous when it comes to this kind of thing, in part because scare stories of cut services fit so well into their business model.

So of course, with billions of dollars of waste, absurdly high labor costs, stupid-large executive compensation, etc., GM chooses to cut funding the project that is most important to Congressional Democrats and the new Obama administration.


  1. Brad:

    This bothers me to no end. Several years ago in Kansas City, there was a vote for a new tax so fire stations could be upgraded and new ones built. Shouldn't that be part of the basic services our taxes cover? We have to vote on the basics that have to/should be covered, while every entitlement program, bloated bureaucracy, under-performing employee, etc. are a given that they'll continue to be funded.

    There should be a list of basic, essential services that taxes cover. Then, if you need new fire stations and there isn't enough money to do it, you vote which non-basic, essential service to axe to pay for it, or you vote for a tax increase to cover that non-essential service.

  2. Brooklyn:

    In Seattle they actually do have about 10 people in the stripper licensing organization, which never gets cut. They have to make sure all the strippers get extorted, er, I mean licensed, frequently. There is no money for firemen, though. Maybe there's some cosmic symmetry there from the brass poles.

  3. Mark:

    I call this the "Barney" effect because when the Corporation for Public Broadcasting was faced with a minimal budget cut a few years ago that is what they and their media supporters claimed would have to be cut to meet these budget cuts.

    But, this is how all non-profit entities manage. THey change the debate from a funding cut to a debate on "Don't you want to keep Barney on the air?"

    One of our local school districts had their ballot referendum raising property taxes rejected and was forced to make a 4% budget cut. Frankly, for a business a one time 4% budget cut is a good thing because it gives you the opportunity to get rid of some dead wood.

    However, the local school board determined that the BEST way to achieve these cuts was to go to a four day school week. I can see the board discussion now...."How can we piss off those m*****f***ers that did not give us our money" and "I bet those a**h***** will vote YES next time!".........

  4. John Moore:

    When the government "shut down" in the Clinton years, naturally they closed the National Parks first.

    This is normal MO for rent seekers.

  5. thebastidge:

    All the tax money goes into one pot, without accountability as to the results of a given tax scheme's effectiveness.

    In the corporate world, my project has costs associated directly with it, there's a clear determinent of whether or not it is worthwhile (profit incentive), and my employment is not term-delimited, but rather based on performance.

    There are no parallels between government and business that don't show government in a bad light.