Budget & Tax
Jonathan Small | June 1, 2021
Results more important than government jobs
Is it better to achieve results or generate more “jobs” without achieving one’s goals? Are private businesses more results-focused than government bureaucracies?
That there is debate in politics over these two questions, even in Oklahoma, highlights why so many citizens have a low opinion of government.
Obviously, outcomes are more important than method of delivery. Yet some insist otherwise. Opponents of school-choice programs and managed care in Medicaid both proclaim the apocalypse is nigh should private companies and market forces be introduced into government processes.
Such predictions are based on a false understanding of government’s purpose.
In education, the goal of spending billions of taxpayer dollars is to educate children. If better results can be generated paying tax dollars to private schools to educate a child—and the results are consistently better, regardless of student demographics—then why not use a private provider?
Similarly, if private contractors can do a better job controlling Medicaid costs and improving patients’ health outcomes, why not use private companies?
The point of government spending is not to support government systems, but to benefit Oklahoma citizens.
Opponents of managed care insist it would be better to supersize the Oklahoma Health Care Authority than use private contractors to oversee managed care. They say that ensures the money will “stay in state.”
But there's a good reason the government contracts with private companies all the time. More than $1.5 billion in public-school money is spent annually on supplies and services, including for food, construction, accounting, janitorial services, textbooks, and school buses.
Notably, big hospitals and other health care providers—who collectively make billions of dollars off Oklahoma’s Medicaid program—don’t object to the state’s Medicaid agency using an out-of-state sourced company to process their claims payments.
The “keep the money in-state” argument would have Oklahoma government build buses rather than purchase them. The buses would cost more and be less reliable, but the associated jobs would all be in Oklahoma.
Does anyone not employed by the government think that’s a good plan? Of course not.
Trying to create a state-run version of a private-sector managed-care company makes no more sense than for state government to go into the bus-building business. Wasting your taxpayer dollars “in state” doesn’t change the fact that politicians are wasting your tax dollars.
During an overseas trip, free-market economist Milton Friedman once found officials were not using modern equipment to build a canal. He was told the goal of the government project was to maximize employment. To which Friedman reportedly responded, “Oh, I thought you were trying to build a canal. If it’s jobs you want, then you should give these workers spoons, not shovels.”
The arguments against school choice and managed care are just the latest version of the mindset Friedman encountered overseas. But we don’t need more jobs digging with spoons. We need our tax dollars put to productive use.
Jonathan Small, C.P.A., serves as President and joined the staff in December of 2010. Previously, Jonathan served as a budget analyst for the Oklahoma Office of State Finance, as a fiscal policy analyst and research analyst for the Oklahoma House of Representatives, and as director of government affairs for the Oklahoma Insurance Department. Small’s work includes co-authoring “Economics 101” with Dr. Arthur Laffer and Dr. Wayne Winegarden, and his policy expertise has been referenced by The Oklahoman, the Tulsa World, National Review, the L.A. Times, The Hill, the Wall Street Journal and the Huffington Post. His weekly column “Free Market Friday” is published by the Journal Record and syndicated in 27 markets. A recipient of the American Legislative Exchange Council’s prestigious Private Sector Member of the Year award, Small is nationally recognized for his work to promote free markets, limited government and innovative public policy reforms. Jonathan holds a B.A. in Accounting from the University of Central Oklahoma and is a Certified Public Accountant.