Government Owned Companies

With all the recent investment by the government into banks and other publicly traded companies, one has to wonder, is the government really the best organization to run these companies?

In the private sector, a company will spend millions of dollars on a single executive’s pay each year.  This isn’t because the companies are wasteful or the executives are greedy.  It’s because this is what the executive’s experience is worth in the free market. 

If you work at McDonald’s for $8/hour, it’s because [a] you haven’t done well on your executive level interviews, or [b] that is what your experience is worth in the free market.

When a person takes a position in the government, no matter at what level, they are either doing so to fulfil a civic duty or because that’s the best job they can get.  No one in government, whether they are working to fulfil a civic duty or not, is making executive level salaries.  It’s not because the government is poor and can’t afford to pay these salaries.  It’s because the experience they are receiving isn’t worth an executive level pay.  Granted there are people with executive level experience who work for the government who don’t make executive level pay.  These people are working for the government to fulfil their civic duty.

My point here is that in a free market, quality experience is well compensated.  The government does not have an abundance of quality experience, and their employees are compensated as such.  Why then, do we as a society think that the government has all the answers?  Why do we think that they will be able to solve all of our problems if the private sector has yet to solve them? 

The answer is they can’t, without imposing heavy taxes upon the American people. 

Think about it.  All the companies who are asking for bailout funds, are looking at a few billion dollar loss per year.  The US government is forecasted to hit a $1.8 trillion deficit this year.  Even in a surplus year, the government does nothing to earn a single dollar.  They only regulate the ins and outs through taxation and government spending.