Jan 13 2012

Obama Proposes Excellent Idea To Shrink Government

Published by at 9:09 am under 2012 Elections,All General Discussions

Give the administration kudos, they just stole the GOP’s thunder by dangling a carrot (and key precedent for future Presidents) that will be a game changer in the election:

President Barack Obama will ask Congress on Friday for greater power to shrink the federal government, and his first idea is merging six sprawling trade and commerce agencies whose overlapping programs can be baffling to businesses, a senior administration official told The Associated Press.

Obama will call on Congress to give him a type of reorganizational power last held by a president when Ronald Reagan was in office. The Obama version would be a so-called consolidation authority allowing him to propose mergers that promise to save money and help consumers. The deal would entitle him to an up-or-down vote from Congress in 90 days.

Not in decades has the government undergone a sustained reorganization of itself. Presidents have tried from time to time, but each part of the bureaucracy has its own defenders inside and outside the government, which can make merger ideas politically impossible. That’s particularly true because “efficiency” is often another way of saying people will lose their jobs.

The GOP House dare not deny his request, since this is the exact kind of administrative efficiency the Tea Party and Libertarians see as the path to right-sizing government. They can reject his proposed solutions if they have a serious problem, but not the general idea and approach.

It will be interesting to see how the GOP primary field and House leaders respond. My guess is they will blow it and lose this powerful tool in the future. The smart play is to embrace it and hold hearings and explore how it can be used across the board.

So now begins the test.

Major Update: And while Obama fights Congress to shrink government, Romney is fighting a losing battle concerning his image as a corporate raider who aligns with taking over and gutting businesses. See here and here for examples of how Romney has lost the message battle.

Update: BTW, I posted many times on how to shrink government without losing the next election. And this is to let attrition shrink the roles of government. At the current size, a lot of people leave every year. When slots become available, people in organizations being eliminated or downsized can move to fill positions in organizations that are steady or growing. There is no need to be brutal about shrinking government – a key aspect of the Obama Administration’s proposal:

The official said 1,000 to 2,000 jobs would be cut, but the administration would do so through attrition; that is, as people routinely leave their jobs over time.

If the GOP fights this, kiss this election cycle good-bye in terms of the White House.

Update: As I watch the Romney Short by I assume team Gingrich I see why Newt is so adamant about stopping Romney. Mitt clearly went to the school of ‘get rich quick at any cost’. I always suspected he was not a real small business type, and now I can see it. Businesses DO NOT succeed when profit is the driver. They ONLY SUCCEED, when quality and the betterment of the employees is the driver. Only then do you unleash the creative power of the team.

Romney comes from the failed Haarvhaard school of business. And trust me, it is a complete failure. Those fools at Harvard don’t have a clue how to create a dynamic and successful team.

15 responses so far

15 Responses to “Obama Proposes Excellent Idea To Shrink Government”

  1. MerlinOS2 says:

    Even though I worry what else he may have up his sleeve beyond the announced cuts it should go forward.

    It takes away is obstructionist congress game a bit and if he abuses and misuses the authority they can vote down whatever he proposes.

  2. ivehadit says:

    What the hell happened to representational government???
    I get that you don’t like Romney but do you honestly believe this destroyer of the American economy has GOOD INTENTIONS with this? There is some serious denial going on ONCE again about this man. He has shredded our constitution which he doesn’t like to begin with.
    This move is Alinsky all the way…use your opponents rules against them.

    As far as I can see we have some serious self-destruction going on.

    Regarding Romney and Bain, I am thrilled this is coming out now and being pounded. It will be very old news very soon. And when we unleash the FACTS about what Obama has done and his own words we’ll see who really believes in economic freedom for ALL and who has good intentions for this country.

    We are in a fight for our very survival and all this wailing is hubris, IMHO that we cannot afford right now.

  3. WWS says:

    My prediction is that Congress will agree to give him this authority, and then Obama will proceed to ignore it and do absolutely nothing with it. Obama’s interested in posing, not in actually doing anything.

    On a theoretical level, I think your description of what leads to business success is a bit off. The things you name can help lead to success, but on their own they just as easily lead to failure.

    The requirements for a successful business (and government) is that it first must correctly perceive the needs of those who will consume its product (for with no consumer there is no business) and then must provide that product to this consumer more efficiently than anyone else can. That’s all there is to it, in a nutshell. Quality products tend to meet consumer’s needs more often then not, but not always. (if I’m buying manure, I don’t care much about quality) A high quality product with no market will fail spectacularly (remember Motorola’s Iridium project?) and a higher quality product with poor marketing and inefficient distribution may lose out to a lower quality one, ie VHS vs Betamax 3 decades ago.

    Although enabling the betterment of employees tends to produce a more dedicated workforce, this is very secondary to the needs of the end user / consumer. If not, businesses would pay every employee $1,000 an hour, for certainly that would make them happy and dedicated to the job. But doing this would destroy the cost efficiency which makes the product attractive to the consumer. The consumer’s needs drive business strategy, not the employees, and not the owners. And consumers reward cost efficiency more than any other factor. (think about it; you and I do this in virtually every purchase we make, unless we’re Tiger Wood’s ex)

    Why does Apple manufacture its products in Malaysia and China and not Massachusetts? This is why, it certainly isn’t for the betterment of Chinese and Malaysian workers.

    Real World Example of a business that ignored these rules and failed spectacularly: Solyndra. Everyone agrees that Solyndra was making a high quality product, and that their employees were well paid and “empowered”. But the business crashed and burned. Why? Because they provided their product so inefficiently (ie, at too high a cost) that no end users were buying it. No sales, no business. Simple.

    And we need to specify a definition here: the word “profit” is simply the easiest way we have to measure systemic efficiency. Although there are ways to make “profits” that are not efficient, generally it is the hardest real world number to fake, and thus the most reliable measure of efficiency one can obtain.

    SINCE there are ways to game the number (focusing on quarterly figures instead of long term, playing with debt load) the source of the profits must be looked at carefully, and any potential weaknesses in the structure noted. But consistent and honest profits lead to growth, and a business (and an economy!) with consistent growth will always outperform one without it. The presence of a healthy profit margin doesn’t guarantee growth, but the absence of it guarantees failure.

    A business that manages to exist but produces no growth and little profit over the long term is an inefficient user of resources, and the economy overall is better off if those resources are redeployed in ways that are more efficient and productive. That’s what Obama is proposing today in the Government sector, and that’s what Bain Capital and those like them do in the private sector.

    Personally, I trust Romney to manage the process competently far more than I trust Obama, or Newt for that matter.

  4. ivehadit says:

    Excellent commentary, wws. Imho, whatever this administration says, they are doing the exact opposite. And I see them making this move because here’s a great tagline for Romney: He likes to fire people? Great! Get started with the federal government NOW!

    Imho, as you stated, obama and his group are all for show. Shame on the American people for not understanding this. But alas, we are more of a culture of entertainment and not substance, imho.

  5. ivehadit says:

    What exact agencies does Obama want to shrink? CHECK IT OUT.

  6. Klimt says:

    AJ maybe you should have been Romney’s adviser or just replaced him at Bain since you know so much about running a business…

  7. Redteam says:

    WWS, minor point. There is no way Betamax was superior to VHS, I was around at the time and I carefully evaluated both before buying.

    But I generally agree with most of what you said. (I would prefer that my manure be of a better quality vs poor quality)

    In the case of Solyndra, this was a higher cost product in a high cost world. Solar energy is almost never cost effective due to the high cost of the equipment (made in China) so making a much higher cost product didn’t have a chance. (I’m agreeing with you on this)

    Obama will certainly do nothing to shrink the government, so we need to get this into place so Newt can use it during his term…

    Everyone is noticing the rapid increase in poll numbers for Newt in SC, right?

  8. Neo says:

    The President’s proposal calls for the ability to consolidate much more that just these 6 agencies given as an example in the White House PR.
    I suggest that the Administration come up with these proposals and have the mergers/consolidations occur as part of the normal budget/appropriations process.
    This shouldn’t be a problem, unless of course, the Senate continues to avoid compliance with the Budget Act and actually produce annual budgets, as has been the case for the last 3 years.

  9. Layman1 says:

    OK… 80% agreement. On the issue of profits you’re dead wrong AJ. No one started a business thinking that breaking even would be OK as long as they treat their employees right. When I stepped out on my own I had two goals and they’re still the same today: be my own boss and make as much money as I can.

    Betterment of ones employees is a tool. In the big picture I don’t care or not if my employees are happy. I do care about retaining good employees, having them work to make my business succsessful, treating my customers right, producing quality results, and unleashing their creativity. To make this happen I’m a great boss, trust my employees, and give them great pay and benefits. We all end up winning and being succsessful together. But sorry folks, if I could pay slave wages and get the same results I would.

  10. A_Nonny_Mouse says:

    This development makes me QUITE uneasy, but you’re correct– any GOP nay-saying will be labeled by the MSM (aka Propaganda Arm of the Democrat Party) as proof of “intransigence” and “racism” and probably “unnatural carnal knowledge of hamsters”.

    So, I agree that Congress should act like they embrace the President’s idea –


    they *MUST* *MUST* *MUST* !!!! demand recognition and acceptance of their role of “advice and consent”. If they just wimp out and let the Executive Branch adopt even more power, without exercising their obligation to counterbalance and rein in that power, they should all be hanged for treason. Seriously. Treason.

    God alone knows what the Anti-American in the White House is REALLY trying to do — eliminate everything that requires approval and oversight by We-The-People’s representatives, then invent an Executive Mandate to create an overarching Consolidated Regulatory Bureau (staffed by hand-picked Progressive “experts” with no accountability, a la The European Union) to run the country by fiat, without the pesky checks-and-balances those old dead white guys wrote into the Constitution?

    OK, maybe not quite yet. But I STRONGLY suspect that O’Bummer has something quite unseemly in mind. Please, please, please—- can We The People contact our elected representatives of both houses of Congress and insist that they –for a refreshing change– READ whatever damn paperwork is tossed their way before voting “Yea”? Please?

  11. Redteam says:

    If it passes and a Republican is elected, they will get to use this new thing for 4 years before it can come back to the Communist Anti-American side.

  12. crosspatch says:

    When a company is on the rocks and is about to die anyway, the investors hire someone to come in and salvage as much of that investment as possible. A business is not a charity. It isn’t about continuing the business as long as possible in order to pay salaries until all of the investors’ money is gone.

    It is about looking at ways to either A: turn the company around or failing that B: salvage as much value for the investors as possible to minimize their loss. An employee is paid in full 100% all that is owed them with every paycheck. You work your hours, you get your pay, nothing more is owed. An investor, on the other hand, has made a longer term sacrifice. They have put up a cash to make the company even operate with an expectation of a payoff farther down the road. The investor doesn’t get square every week. When the company is on the rocks and someone like Bain is called in, it is to either see if it can be made more efficient and turned into a money maker or liquidated in the most efficient way possible.

    An employee is only due compensation for their labor. Nobody ever got rich working for a living.

  13. radioone says:

    Yes, the Republicans should EMBRACE the idea and then propose More!! A reduction of 2,000 employees would cost what?? About a tenth of a second of debt.

  14. Layman1 says:


    Well said. But you and I will probably be called “Vultures”.

  15. MerlinOS2 says:


    Obama’s speech on this subject