Monday, October 29, 2012

Secretary of Business

Copying the success of the Department of Homeland Civil Rights Abuses Security, Obama has eluded to a Secretary of Business in his next administration heading up a consolidated group of business-related agencies. A one-stop shop for corporate welfare.

Efficiency in this area would not mean better SBA loans and smarter import-export subsidies—assuming there is a role for government to play in these endeavors. It would mean simply more of these activities with the associated growth in spending and malinvestment.

Generally, organizations don’t consolidate to bring efficiencies to the end customer or enhanced production. They do so to make it easier on the reported-to entity. Instead of nine offices reporting up the chain separately, the nine report to one office who then reports further up. The opportunity for cost savings is very limited by combining these functions. As functional areas are combined with “redundancies” eliminated, the risk of losing specialized knowledge grows, and the chance of good practices dwindles.

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