Why is government bloated, bureaucratic, and inefficient? Why can’t government be run like a business?
The answer is that government could be run like a business. It could be lean, responsive, and efficient. Government simply needs to adopt proven business practices. Starting at the top.
Consider executive compensation. Corporate America is the world leader in executive compensation. Corporate America pioneered sophisticated and effective means to motivate and compensate top management. Corporate American developed the short-term bonus, long-term incentive plan, incentive stock option, performance-based stock award, deferred compensation plans, phantom stock plans, shadow stock plans, golden handcuffs, golden parachutes, and a plethora of other plans and perks.
These compensation tools, astutely employed by corporate boards to properly incentivize and remunerate top executives, remain the engine of America’s economic growth. Unfortunately and inexplicably, government has ignored these brilliant private-sector executive compensation techniques. Elected officials from president to the Arizona governor to the Seattle City Council are all paid a fixed salary. They receive no performance-based pay. Their compensation has no equity component. In short, they have no skin in the game. Their financial incentives are not aligned with their constituents.
Sadly and consequently, instead of concentrating on economic growth, Obama regulates banks and drug companies, Arizona Governor Jan Brewer outlaws Hispanics, and the Seattle City Council worries about mistreating circus animals, exhibiting cadavers, and being the only American city with its own foreign policy.
They would all behave differently under a well-designed incentive pay plan. If every elected official received a short-term bonus, long-term incentive plan, incentive stock option, performance-based stock award, deferred compensation plan, phantom stock plan, and shadow stock plan based upon economic growth, we would get economic growth.
Let’s initiate “Performance Pay For Politicians.” It worked on Wall Street. It can work in Washington. Piece of cake.
Like what you just read? Support high quality local journalism. Become a member of Crosscut today!