Posted on 06/27/2002 7:03:41 AM PDT by wallcrawlr
In a recent forum of the three major-party candidates for governor, Tim Pawlenty told the audience that, if elected, he would do his job "quicker, faster, better, cheaper, just like in business.''
You hear this sort of comparison a lot in politics. The Bush administration bragged that they were going to base the Cabinet on a board-of-directors model. School superintendents use management jargon about "improving efficiencies" and "incentivizing outcomes." Gov. Jesse Ventura has often described himself as the state's CEO.
Such corporate comparisons have historically played well with taxpayers convinced that government bureaucracy is out of control. But now, in an era when corporate America is looking increasingly corrupt, should business really be the model the rest of us run on?
Today's corporate titans don't give me a lot of confidence. Investors (read: regular people like you and me who worry about our retirement savings) are still reeling from news about the lack of ethical leadership at Global Crossing, Tyco, Rite Aid, Xerox and Enron. Now we hear that WorldCom chief financial officer Scott Sullivan somehow overstated the assets of the nation's second-largest long-distance telephone carrier by some $3.8 billion. The fact he's lost his job will be small consolation to the 17,000 employees who will now lose theirs.
But after decades of giving corporate America everything it wants — huge tax breaks, deregulation, offshore headquarters even — should we be surprised that so many people in charge now see themselves as Masters of the Universe for whom the rules do not apply? How else to explain the recent indictment of superstar CEO Dennis Kozlowski of Tyco, who routed two mediocre paintings by Renoir and Monet (allegedly paid for by no-interest loans drawn from a Tyco employee stock-buying program) through a New Hampshire office so that he could evade New York's 8.25 percent sales tax? Now the man who made $125 million last year (and who moved his company's headquarters to Bermuda) may face four years in prison because he thought $1 million in sales tax was just too much to pay.
Similar arrogance could be seen earlier this week on CBS's The Early Show, as host Jane Clayson asked Martha Stewart about allegations of insider trading after she dumped 3,928 shares of ImClone — a company run by a good friend — just a day before it took a nosedive. The domestic diva continued chopping cabbage as she declared, "I will be exonerated of any ridiculousness."
And it must seem ridiculous to this woman — mistress of her eponymous Omnimedia empire — that anyone would give a fig about a stock sale that amounted to a mere $227,000. That's walkin'-around money to the average top 10 CEO whose annual pay is now $154 million, 4,300 percent more than these captains of industry made just 20 years ago. (FYI, ordinary workers' wages just about doubled in the same period.)
Wall Street sometimes seems far away, but there are ripple effects right here. This week, USBancorp Piper Jaffray was fined $300,000 for threatening to drop coverage of a cancer drug company that hired a rival firm to do its investment banking. St. Paul's old Schmidt Brewery was managed right out of business, losing 200 jobs and leaving behind an unpopular ethanol plant. Supervalu's CEO just admitted an accounting mistake had overstated profits. The recent sales agreement for Cloquet's Potlach has now prevented any buyer of its Brainerd mill from actually making paper, a business "efficiency" that has idled 616 workers.
Maybe corporate America was once the gold standard for efficiency and ethics, but tarnished reputations and tainted investor relations will take some time to be repaired. That's why this election season, politicians accustomed to intoning their corporate vision for America might want to rethink that business strategy.
Running "like a business" no longer looks like such a virtue.
Maybe not, but it's still certainly better than your usual government bureaucracy.
Those companies that deal in corruption and fraud will go out of business and investors will be rid of them. That's a justice all it's own. On the other hand, government entities that engage in corruption and fraud are never eliminated and only get their budgets increased the next year.
When a business fails it's mission it goes out of business, as it should. When government fails it's mission it only gets bigger, more powerful, and better funded. That's bass-ackwards from the real world.
That's why government should be more like business. If you fail, you're through. The same vetting process with government is something we can only dream about.
Perhaps the problem with these companies is that they in fact were run like a Government!
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