Thursday, September 25, 2014

How To Get A Raise (Government Style)

By Chris Rossini

The formula for getting a government raise is so simple. Every bureaucrat has the capability of memorizing it ---> FAIL.

That's it.

Failure is the greatest 'success secret' in the upside-down world of attempting to run the world. U.S. foreign policy is living proof, as is the U.S.'s public school system. But the principle applies to all aspects of government, not just the juicy failures that are always in our face.

Here's an example that I came across today. Apparently, the massive recalls from Government Motors GM have brought a firestorm of criticism to a government alphabet soup agency called The National Highway Traffic Safety Administration (NHTSA).

The head apparatchik of the NHTSA, and who TIME calls "the man charged with running the nation’s auto-safety administration" is the guy with the plan:
“Any life lost is one too many; anything that we can do to improve in a situation like this, we’ve got to do.” ... “We need a new normal when it comes to recalls.”

A more combative relationship that keeps “every car company on their toes” is at the heart of [David] Friedman’s “new normal” and carried out through increased financial penalties on car companies and an expanded budget. (emphasis added)

“Dropping the ball will not be tolerated,” Friedman said.
Let's start at the top.

The idea of government being in charge of auto-safety is complete insanity. The car companies are responsible for providing the correct amount of safety that their customers desire. The car companies have every incentive in the world to make sure that "any life lost is one too many".

Why? Because it's bad for business if someone dies as a result of your product!!! Lawsuits can crush them, and they can lose customers en masse!

The government apparatchik, on the other hand, has no customers and is fed with stolen taxpayer money. His incentives are quite different. We know for a fact that if something goes wrong, he may be eligible for a raise!

And this is the same guy who has the gall to say that the government is in charge of keeping "every car company on their toes".  Wrong! It is the customers who wield that big stick. For it is the customers who must be separated from their money, and who have the ultimate power of saying "no". Government takes a buzz-saw to the customer's big stick.

The NHTSA will probably get a budget increase. This is America after all. But nothing will change. The opposite of the government's stated wishes will continue to be produced. The NHTSA provides a perfect scapegoat for car companies should something go wrong. They can easily offload the blame, and claim innocence.

Car companies can say: "Hey, don't blame us. We followed all the safety regulations that the NHTSA makes us follow." They're now in the clear. And if there are any unscrupulous players in the industry, they can cut corners with the NHTSA acting as their cover.

In a free marketplace, reputation is paramount. The customer is the king. You can't offload blame on anyone else. However, when government arrives on the scene as "regulator," the whole process is contorted. The merchant/customer relationship gets a DMV-like bureaucrat who stands in the middle and pretends to run the show.


Throw it away.


  1. but, but, but.... Government always intervenes when it sees a decline in a "bad" (decline in auto accident deaths). Then they can take credit for the continued decline. It doesn't always work tho. LBJ squelched the decline in poverty with his Great Society. But ya gotta try!

  2. Whatever the gov't sets out to do, you can be sure they will accomplish just the opposite.

  3. All those people who think government regulation is the only way to deal with risk are completely uninformed as to how the market handles risk: insurance. Beginning with Lloyd's of London, where men of means met with shipowners to share the risk (for profit) of ocean vessel losses, insurers have covered losses AND promoted risk management (preventing losses). And they did it as only the market can: economically.