April 26, 2024

Economic View: To Rethink Government, Start Close to Home — Economic View

Some of the antipathy may stem from fancy economic theories that say free markets magically render government unnecessary. But much more of it surely results from the annoying experiences that many Americans have had in government offices.

High on many lists of miserable places to spend an afternoon is the local office of the department of motor vehicles.

For decades, people have complained of long lines and rude service at D.M.V. offices all over the country. There’s a widespread impression that D.M.V. employees consider their customers’ time worthless.

One blogger, for example, described a visit to a rural Ohio motor vehicle office where he ignored the “take a number” sign, since he was the only customer in the room. When he approached the counter, the clerk glared at him and sternly ordered him to take a number. He dutifully complied, adding that “as soon as I sat down, she called out, ‘One!’ ” “That’s me!” he responded, and only then did she deign to scrutinize his forms.

After countless experiences like these, is it any wonder that many people believe that government is the problem and not the solution, as President Ronald Reagan contended in his first inaugural address? In the years since, increasingly harsh antigovernment rhetoric has dominated American public discourse: All taxation is theft! Starve the beast! Or, in Grover Norquist’s memorable words, we should downsize government enough to “drown it in the bathtub.”

Yet no society can prosper without government. Without collective action, how could we defend ourselves, or enforce property rights, or build and maintain public infrastructure, or curb pollution? And if government is unavoidable, surely it is worth asking whether we can make it better. Some societies have demonstrably more effective governments than others, after all, and some of our government institutions function much better than others.

I stumbled upon an instructive case study close to home — in Ithaca, N.Y., at the Tompkins County Department of Motor Vehicles office. The Ohio blogger could have been describing the D.M.V. I dealt with when I first moved to Ithaca in the 1970s — surly service, endless waits, mindless bureaucratic rigidity — the whole litany. But these days, the local D.M.V. is nothing like that.

For example, when I was selling my car to an out-of-town buyer last March, he said he was excited to complete the transaction except for the fact that he would need to visit his local D.M.V. I suggested that he register the car in Ithaca, where he’d be in for a pleasant surprise. We went together one morning to a harshly lit, warehouse-like building that still seemed to scream “bureaucracy.” There were forms to fill out, and he found them confusing. Though he made several errors, an employee cheerfully guided him through the process. Much to his astonishment, we were out the door with his plates in 15 minutes.

Curious about what had caused this transformation, I called Aurora Valenti, the Tompkins County clerk, who’s been in charge of the local D.M.V. for the last 21 years.

Things were a mess when she first took office, she told me. Employee morale was low, and customers complained bitterly and often. One big annoyance was that they had to wait in one line to have their forms processed, then start all over again in another line to pay their fees.

She discovered that the reason for the separate line was technological: terminals used to process licenses and other forms couldn’t handle transactions involving money. So she negotiated with state officials in Albany to get what was needed to allow each clerk to do both tasks. Now customers wait in only one line. That may not seem like a big deal in itself, but the intelligent use of technology — which also sometimes allows customers to complete their forms online, and not even visit the D.M.V. — has contributed to a quiet revolution.

BUT that’s only part of the story.

Robert H. Frank is an economics professor at the Johnson Graduate School of Management at Cornell University.

Article source: http://feeds.nytimes.com/click.phdo?i=e82716f48f4c1b621dd66190d9ce27f0

You’re the Boss: Waiting for a Recovery

Thinking Entrepreneur

An owner’s dispatches from the front lines.

I have been selling a very popular poster in my frame shop over the last few months. It is a reproduction of a recently rediscovered poster that was printed in England before World War II, but was never distributed. It says “Keep Calm and Carry On,” and it has become quite popular all over the world. I think it’s good advice for dealing with fear, especially for small-business owners.

When I started my business right out of college, I had a lot of fears: of not having enough sales, of signing a lease, of having made a bad career choice. As the business has grown, I have learned that there are many other things to fear: cash flow problems, bad receivables, embezzlement, employee lawsuits, government offices, recessions, accidents and product liability, to name a few. That’s the bad news. The good news, to paraphrase Neitzsche, is that what doesn’t kill us makes us stronger.

Fear is not all bad. It keeps us on our toes. But it also puts people out of business who can’t or won’t make tough choices. I have seen many once-successful companies go broke. Companies go out of business for all sorts of reasons, but there are times, perhaps like now, when it is tempting to become very conservative, when it can seem too dangerous to take the risk of spending money to improve your business. Sometimes, though, in a competitive world, being overly conservative can prove as dangerous as being reckless.

Three years ago, many business owners were afraid they wouldn’t be able to pay their bills and weather the storm. Today, many of us fear that the storm has done too much collateral damage, and things are not going back to the way they were. I talk to many people in business who are still waiting for a recovery, and they are starting to look at their businesses in a different light. They don’t know if they are more afraid of doing nothing or of doing the wrong thing. They’ve never been through anything like this — who has? But difficult times can create interesting opportunities.

My plan for 2009 was to get to 2010. Mission accomplished. At some point, knowing there can be opportunities in a bad economy, I got back to looking for ways to improve my businesses. I bought a new building. It meant laying out a lot of cash at a time when that wasn’t easy. While it’s a much better facility, on a cash-flow basis, I’ve had to put a lot of money into it. One thing I’ve learned: when you buy a big building — this one is 85,000 square feet — you buy a big roof. Mine leaked. It cost a lot to fix.

My home furnishings store has been doing more and more business on the Web, so I seized the opportunity to redo its Web site. Again, I have no doubt the investment will pay off — eventually. I also started manufacturing a new line of photo frames, and I took out a booth at a gift show in Atlanta this month to introduce them. We did about a tenth of the business we expected, but we learned some things.

It was the first time we had gone to this show, and we didn’t have realistic expectations. Next time, we will go to the New York show instead; our frames are better suited for a more contemporary market. Am I afraid that the new line isn’t going to work? No. We went to the wrong show at the wrong time. I have gotten pretty good at determining when something can be fixed and when I am being delusional. This can be fixed. But I’m not sure how many more opportunities I can afford to seize before the economy turns.

There comes a time in business that you don’t look down, you don’t look back, and you just move forward. Am I where I wanted to be at this time? No. But I still believe that my recent investments will pay off. The results are not going to show up on this year’s financials, but I’m confident that in the long run, I’ll be better off than I was before the melt down.

Again, whatever doesn’t kill you …

9:40 a.m. | Correction A previous version of this post misstated the message in the British poster. (Thanks to the commenters who pointed out the error.)

Jay Goltz owns five small businesses in Chicago.

Article source: http://feeds.nytimes.com/click.phdo?i=dbd639e86d12ad8419058e8fffa2a5aa