Monday, June 20, 2011

Government and Private Enterprise

The local state public affairs channel featured an interview with two legislative leaders discussing the recently passed budget that contains drastic cuts in social services and education while retaining tax breaks for businesses.  Contrary to network interview shows, the interviewer and two legislators conversed in rational, respectful words of ordinary volume with very few interruptions of each other.  
One of the legislators argued the standard conservative line that only private enterprise creates jobs and wealth; government is an obstacle to both and must be restrained as much as possible.  It’s a shame that social services and education had to be cut, but the budget had to be balanced, and the stage set for economic growth. 
It makes sense if you don’t think about it too much.  The argument sets up private enterprise and government as opposites, or, perhaps, opponents in a win-lose game.  While that resonates with some people, it’s patently false.  Private enterprise and government exist in a symbiotic relationship.  Establishing the proper balance between the two is the work of political negotiation in which the reality of that symbiotic relationship is acknowledged and understood.
There are three basic sets of jobs that contribute to the economic prosperity of the state.  One set includes jobs connected to the production of goods and services that are sold to others elsewhere in the world.  These exports bring new money into the region adding to our wealth.  The second set includes jobs connected to providing goods and services to others in the region.  The efficiency of these jobs is measured in part by how many times a dollar brought in from exports can be spent before it disappears.  The third set includes jobs connected to the creation and maintenance of the infrastructure that make the others possible.  Some of the jobs exist in the private sector and some exist in the public sector, but all contribute to the economic wellbeing of the state.  
Job and wealth creation require a physical and regulatory infrastructure that only government can provide.  Taxes levied to provide that infrastructure are not a drain on the private sector, but an investment in it.  Among the most important parts of that infrastructure are the health, safety and education of the people.  Unregulated private enterprise has proved itself incapable of managing for either the public good or the long term good of its employees.  Clearly government has at least two roles. One is to craft the environment in which private enterprise can flourish. The other is to assure that that environment provides for and protects the well being of its people.
It’s a tough balancing act.  Regulate but not over regulate.  Tax but not over tax, and tax fairly.  
I think that in Washington State we have gone too far in piling the tax burden on those least able to carry it while letting some corporate interests and the very wealthy off the hook.  We have gone too far in cutting social services while failing to give serious consideration to tax increases.
We have failed to recognize that government is indeed a generator of jobs and economic growth.

1 comment:

Anonymous said...

Amen! Dr B