Government Welfare

If government is an instrument of justice and a means of providing order for our social interaction, then should it really be used like it’s an investment banker and venture capitalist?

When is welfare not welfare but instead good government policy? And have we gotten to the point at which we don’t know what “government welfare” means? An interesting debate has started in Nashville, and it needs to spread everywhere.

At issue is a practice well-established in Tennessee state government and probably in every other level of government from Washington, D.C., to city hall and the county commission, namely, the government “creating jobs” by giving money to businesses, particularly startup businesses.

The desire of our Governor and legislature to see a stimulated economy and an increase in the availability of employment in Tennessee is a noble one. We sure need a stronger economy, and lots of families are struggling with extended unemployment. The question is, how far should a government, any government, go in trying to create jobs through use of the money they take from us through taxes?

Here’s the situation. Apparently Tennessee is hoping to draw down $30 million in federal tax money (actually federal I.O.U.’s since it doesn’t really have the money) to put with private venture capital to help build and grow fledgling companies with great potential but in need of capital. But that “investment” is now drawing questions by legislators about government transparency and oversight—how much should we know, how do we make sure the “people’s” money is used appropriately, and how and who gets to decide who gets the money? Great questions.

Looking at it strictly from a business perspective, putting money into a company with great economic upside makes great sense if you are an investor. Of course, the investor is willing to risk loss, perhaps loss of everything invested, for the possibility of a large return. But should the government be giving my money to businesses that haven’t been able to attract enough money on their own, thereby putting my money at risk? That is what has prompted all the questions by our legislators.

What’s the Purpose?

To answer these questions, we really need to stop for a moment and ask ourselves, “What is the nature and function of government?”

You see, if you can’t answer this question, then you really can’t answer any other question related to what the government should be doing. The nature and purpose of a lawnmower is to mow a lawn, not be manually held in the air to trim shrubbery. The shrub branches aren’t good for the mower’s blade, and it’s not safe for the user either. Generally speaking, nothing really much good comes from trying to use something created and designed for one purpose for a different purpose.

If government is an instrument of justice and a means of providing order for our social interaction, then should it really be used like it’s an investment banker and venture capitalist?

And if it is used as an investor and that’s not its purpose and function, then do we not risk messing up everything? Do we not open ourselves up for more corruption in politics than necessary by allowing politicians to pick who wins and loses in the economic game? Do we not give businesses an incentive to make political contributions a cost of doing business? It makes politicians power brokers in connection with financial gain, and people will do what they think necessary to secure their financial gain. The whole thing just invites corruption.

A Real-Life Example

I remember my colleague, former Senator Steve Cohen, now Congressman Cohen, from Memphis, once commenting to me about why he liked serving on the Judiciary Committee. That committee generally dealt with purely legal matters involving the administration of justice in the civil and criminal courts. It was a really good committee with fair, honest, most often nonpartisan debate. And Congressman’s Cohen suggested that maybe the Judiciary Committee functioned so unlike other legislative committees because there was really no money at stake. District Attorneys, Public Defenders, and Judges rarely have anything to gain financially from a decision about what should be a crime and what should be its punishment.

And I think he’s right. When government restrains itself to issues of justice and orderly processes for interaction among citizens, the political debate is a whole lot different from what it has now become.

Who Is to Blame?

And fiscal conservatives know that government doesn’t work well when it hands out money to people because they are constantly complaining about their tax money going to “government welfare” programs that support those who don’t have enough money to provide for their family. Or should I say enough money to “run the family business?”

I know some fiscal conservatives don’t think the government should “give” money to individuals or to businesses, but if you ask me, liberals and a good many fiscal conservatives need to recognize that our problem in government is not whom we give our tax money to—individuals to run their families or businesses to run (or start) their businesses. Our problem is deeper than that, and the public debate needs to go deeper than that. And we, the people, need to realize that the real problem lies with us because we elect the politicians who presumably represent our view of the government’s purpose.

What we need to decide as a people is what is the purpose and function of government. And we need standup people who will lead that conversation. Any takers?