Fire Congress, Dump Mississippi and Alaska
How a private-equity firm would refurbish the United States for quick resale to China.
Like many large corporations, America is going through a painful transition as it reaches maturity. Growth has stagnated, expenses have soared, and shareholders are getting antsy. While emerging markets offer potential, competitors are rapidly eating away at the United States’ market share. Analysts are bearish, with many believing the country is on the decline. Is it time for a leveraged buyout?
Probably not. Still, it’s a fun thought experiment: What sort of changes and cost-cutting measures would a firm like Mitt Romney’s Bain Capital impose if it wanted to buy the country at a discount and refurbish it for a quick, profitable sale to, say, China?
Though the United States carries a $15 trillion debt load, if you look past its bloated budget and shaky governance, the country has some valuable assets. America has vast real estate holdings, a productive workforce, reliable cash flows, and a globally recognized brand name. An aggressive private-equity outfit, though, would find a lot to cut and a lot of people to fire. Here’s a 10-point plan to get the country shipshape.
1. Streamline the management process. The boys in Washington may be democratically elected, but they can’t pass a budget to save their lives. To cut through this morass in the boardroom, we’ll get rid of the legislative and judicial branches. Checks and balances worked fine for 200 years, but these days a country must be nimble to compete in the global market.
2. Raise taxes. Sure, it’s painful and unpopular, but that’s the nature of this business. Those Bush tax cuts were a nice perk in times of plenty, but the United States is leaving too much money on the table. Paul Ryan says it’s “class warfare” to raise taxes on the rich, and he’s right—that’s why we should go beyond Obama’s proposal and repeal the middle-class portion of the cuts, too. While we’re at it, the charitable deduction for income taxes is good politics but terrible management. And why don’t churches pay property tax? Time for the IRS to pass the collection plate.
3. Bust the unions. America’s organized labor force has been gutted over the last 50 years, with just 7 percent of its private-sector workers still clinging to unions. Breaking up those holdouts will require some canny strategy, but in the meantime, we can take a cue from Scott Walker and John Kasich and revoke public-sector unions’ bargaining rights. Suck it up, government workers: Your pain is our investors’ gain. Oh, and those initiatives that allow voters to overturn these types of policies? Inefficient, to say the least. Democracy is one of the country’s core competencies, but too much of it can lead to uncertainty that scares away the moneybags.
4. Limit exposure to risky foreign markets. America used to be able to invest in sending hundreds of thousands of troops to countries like Iraq and Afghanistan in its quest for global domination. But let’s face it: The country’s overextended. Iran, you want nukes? Go for it—just keep that oil flowing. Syria, Bahrain—you guys go ahead and crush dissent if you feel like it. Libya just cost us a cool billion, and we’re not about to drop another billion trying to build democracy in some other country. North Korea? That’s China’s problem now.
5. Spiff up the infrastructure. Fully rebuilding America’s outdated infrastructure would be prohibitively expensive for our purposes, but a few cosmetic fixes on the cheap could work wonders. That flashy high-speed rail plan that recently petered out? Get it going again. China loves trains. We’ll also need to spruce up those decrepit airports. We’re trying to woo a foreign buyer here, and anybody who deplanes at JFK is likely to take one look at that dump and re-plane posthaste.
6. Drill, baby, drill.