Myth #2 – Government should be run like a business - Revision 2.0

To begin with an example:  In a recent email that was forwarded to me there was a citation that the administration of George W. Bush had 55 percent of his cabinet members that worked in the private business sector prior to their appointment to the cabinet, this contrasted with 8 percent in the Obama Administration.  There was no citation as to the value of having had private business sector experience and so I thought I might help with that.

If we look at the case of Samuel Bodman, appointed by GW Bush in 2004 as Secretary of Energy, we find that he did indeed have private sector experience.  He began his work in the private sector as the technical director of a venture capital firm, later became Chief Operating Officer of Fidelity Investments and subsequently joined the Cabot Corporation as Chairman and CEO.  Under Bodman's leadership from 1987 until 2000, Cabot was one of the country’s largest polluters with 60,000 tons of airborne toxic emissions annually.

Bodman’s tenure was during the coltan boom (columbite/tantalite used in the manufacture of consumer electronics). Cabot was one of the companies listed in a United Nations report (http://en.wikipedia.org/wiki/United_Nations) detailing illegal exploitation of resources from the Democratic Republic of Congo.  As with other resources (diamonds), the sale of coltan by militias to fund purchase of weapons and ammunition was a factor in the longevity of conflict in Democratic Republic of Congo and elsewhere.

Did Sam Bodman apply his private sector experience to his government service?  Did he apply any experience to his government service?  I think not.  He was largely an ineffective secretary.

The following is a quote taken from an ABC News release of November 1, 2005,

          “Bush will also look to Bodman to advance his second term energy agenda that includes weaning the United States from foreign oil by strengthening energy development at home.

          In describing this agenda in his Dec. 10, 2004, announcement of Bodman's nomination, Bush said: ‘We will continue improving pipelines and gas terminals and power lines, so that energy flow is reliable. We will develop and deploy the latest technology to provide a new generation of cleaner and more efficient energy sources.’ “

We know all too well that none of that happened.

The following link to a Huffington Post article sums up Bodman's tenure very well:

http://www.huffingtonpost.com/raymond-j-learsy/our-forlorn-energy-secret_b_116029.html

If you read the entire huffpost article, it will become clear that Bodman was looking the other way while oil rose to $145 per barrel, at least he was looking the other way when he was not asleep.

In spite of the example of Samuel Bodman, there clearly are advantages that a cabinet person with private sector experience could bring to government.  Knowledge of the importance of profit and loss, brand loyalty, quality assurance, customer service and fidelity to shareholders can be of inestimable value in the operation of government.  These assets, however, seem to rarely survive beyond moving day.  The people of the United States are the shareholders to whom fidelity should be given in the case of government service, and yet it seems that all too often the allegiance of high level government officials (and yes elected representatives) remains with their previous corporate associates.  Customer service is reserved for high end campaign donors and quality assurance gets ground up in the pork barrel.  Friends and family (extended family) reap the profits and the average American sustains the loss.  In the private sector, the malfeasant would be thrown out by shareholders.  In the public sector, they are enabled to hide behind sham voting procedures and revised and extended recording practices until such time that they leave office. They are then rewarded with appointments to boards from which they seek favors from public officials who have not yet departed government.  

In summation I would argue that the issue of private sector experience is so minor as to be irrelevant.  Public sector managers (i.e. cabinet level appointees) can be highly effective if they possess the same assets that make any manager effective:  integrity, honesty, intelligence, life experience, education, ethics, passion, vision and a strong desire to be good at what you do.  Anything less will have disastrous consequences no matter what the previous job description.

Elgut Dlareg