The Disney Store approach to cutting the federal deficit

A retail business based on agency logo merchandise could make a modest dent in the federal deficit, writes Steve Kelman.

Recently, I wore a polo shirt with a White House logo on it that my wife had bought at a holiday sale at the Executive Office of the President. It attracted a fair amount of attention and admiration. Over the years, I have also accumulated baseball caps, T-shirts and mugs with the logos of the Secret Service, FBI and CIA, which also attract a lot of attention. When visiting Disney World many years ago, I was impressed by how many tourists were wearing NASA baseball caps that they bought during trips to nearby Cape Canaveral.

There is a large market for logo merchandise in this country, for both Americans and foreign tourists. The Disney Store chain is built on such merchandise. In my home haunts at Harvard University, the Harvard Coop bookstore has reinvented itself as an outlet with a major business in logo products.

Is there a model here for government? In fact, the government is already in the logo products business, primarily catering to its own employees but also offering such merchandise to the public. What if the federal government expanded that effort and set up a chain of stores selling logo merchandise from agencies such as the ones mentioned above?

It is hard to imagine the government being good at running retail outlets, although the U.S. Mint doesn’t do a bad job of marketing. But one could imagine the government awarding a contract to a retail conglomerate to manage a chain of logo products stores, somewhat like the National Park Service hires private concessionaires to serve park visitors. As with park service contracts, the government could receive an upfront fee plus a portion of revenues.

There are three advantages to this idea. First, revenues from the stores could make a modest dent — certainly more than a rounding error — in the federal deficit, and the business likely would grow with the increasing number of foreign tourists in the United States.The business would not only reduce the deficit without cutting programs or raising taxes but also create new jobs.

Second, the effort would be good publicity for a government normally prohibited by law from advertising its accomplishments. It would remind the public that some federal agencies have brand names that are attractive enough to induce consumers to part with cash voluntarily.

Third — and somewhat related — the selection of agencies that offer logo merchandise could change in response to current events. Just as New York City Fire Department baseball caps became popular after the 2001 terrorist attacks, so too might Forest Service caps become popular if their firefighters stop a pernicious wildfire. The retail business would offer an incentive for outstanding achievement and provide agencies with a market test of their brands.

Of course, having White House shirts generally available would reduce their scarcity value, which is obviously one reason my shirt got attention. But scads of tourists happily buy Harvard logo merchandise, even though sales are not limited to students and staff.

Tackling the deficit will require more than innovation and ingenuity about government management. But such innovation and ingenuity can help trigger good ideas for revitalizing government on its own merits.

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