Our best hope for survival and prosperity during these trying times is to build a new, diversified economy that relies more on private sector growth than government.
There’s so much talk about America becoming an entitlement culture, what with the enormous increase in food stamp clients and welfare and unemployment recipients. But there’s little discussion about how our states have been slowly weaned onto an entitlement mentality through thousands of earmarks, public works projects, military bases and federal facilities like national labs, prisons and satellite government offices of every shape and size.
We all know that our modern economy relies on a combination of public and private investment to stay afloat, and New Mexico is not alone. Just look at the $6 billion/year impact our national labs have on our communities – except that our dependency on public money (and that of many other states) is way out of proportion with our population, if you look at it like a statistician.
Here in the West, from Texas to California, the federal government is very definitely the 800 pound gorilla in the room, with billions of dollars invested in our states and millions of jobs (both public and private sector) dependent upon that investment. Think: suppliers, manufacturers, and service providers – literally thousands of small businesses selling something to Uncle Sam’s many installations.
If we look at the big picture, the U.S. government has around two million employees, excluding the post office, on its payroll. Most of its employees (85 percent) work outside Washington, D.C., but without the federal footprint in D.C. there would be few “Beltway Bandits” (lobbyists), consultants, nonprofits, union headquarters, etc. located there.
Instead, a gaping revenue hole would exist for the D.C. government to fill. Conversely, if there were no national labs or air force bases in New Mexico, we’d have a mass exodus of service providers and suppliers headed out of town.
Where would the small businesses go?
But where would all those small businesses head if the Colorado labs like NREL and Argonne, or the Lawrence Livermore Lab in California, or the vast underground military defense installations in our neighbor states to the north and west didn’t exist? These companies would be like ghost ships perpetually sailing an endless sea, desperately in search of a safe harbor, or they would sink without government contracts.
Calvin Coolidge said, “The business of America is business.” Back in Coolidge’s time, the federal government was miniscule (approximately 500,000 civilian government employees) compared to the behemoth it is now.
If the quote were updated, it would probably read: “The business of America is government,” as our government dependency has reached epidemic proportions. If we’re looking for someone to blame, we don’t have to look far… our own mirror will do, and then there are our elected representatives. Generations of congressmen and senators have willingly fed at government’s trough at our behest.
We have encouraged them to fight for our fair share of the pork year in and year out, and that pork has taken the form of institutions and installations that have created an addiction that’s been nearly impossible to break.
Going cold turkey?
The piper must be paid. Many Americans now realize that to continue on the path of government expansion will eventually create an unbreakable and dangerous dependency on a host that will soon be unable to deliver the goods as our enormous national debt ticks rapidly upward at over a trillion dollars per year, and the largest single social program in American history, the (Un)Affordable Patient Healthcare Act, kicks in to cripple small business owners.
Is our addiction reversible?
There are only a few remedies for America’s addiction to government’s largesse, and they all involve reducing our dependency on it and taking a new political path to achieve it. The good news is that most of our congressional leaders finally realize it, too, and they are beginning to see that business as usual (earmarking) isn’t working. Americans are also waking up to the realization that every sugar daddy expects something for his money.
Government’s price is often our tacit agreement with its decisions and our promise to keep any criticism to ourselves. Just as votes are bought with campaign promises to fund special projects, our allegiance is often paid for with jobs at government institutions.
Our best hope for survival and prosperity during these trying times is to build a new, diversified economy that relies more on private sector growth than government. It’s that simple. And that’s the main disagreement between the two major political parties. If we don’t solve that ideological impasse, we’ll run into a brick wall of debt and dependency that will force our hand, as many prominent economists forecast.
Assuming we have the will to downsize our government, the operational choices will be difficult. Here in New Mexico we’ve seen how the BRAC (Base Realignment and Closure) Commission operates, and while it’s not perfect, it may be the model to use with our labs and other installations as well.
But before any decisions are made to close facilities, there must be objective, defensible studies done on the impact that closing facilities would have on the local communities and surrounding areas. Traditionally, the best choices are not to simply close installations, but re-mission them. That way America gets what it wants without the upheaval associated with wholesale shutdowns.
While this is happening, we in New Mexico will need to reset our level of expectations, because no government facility lasts forever, just as none of us gets out of life alive. We will need to have a top-down and bottom-up review of our core competencies so that we can transform them into marketable strengths to attract important outside investment. This will take time and dedication.
After all, building a better mousetrap means thinking like a mouse AND the trap at the same time.
Stephan Helgesen is a former U.S. diplomat and former director of the N.M. Office of Science and Technology. He is currently the honorary German consul in New Mexico and heads up his own export consulting company. He can be reached at firstname.lastname@example.org.