“Huge organization with serious financial management problems seeks a CEO to make tough decisions in order to avoid bankruptcy.” The federal government should be running this want ad in response to the Government Accountability Office’s (GAO) annual audit of federal agency financial statements, released last month. As it has for many years, the GAO concluded that it cannot express an opinion on the statements because of weak internal financial controls and unreliable evidence to support material information.
In other words, the government’s financial reporting is so abysmal no one can tell taxpayers exactly how their money is being spent. That’s aside from the fact that the nation’s current fiscal path is unsustainable.
While the GAO report is not a big surprise and many of the government’s financial problems are systemic, Americans should nonetheless consider what type of leader they want as the CEO of the country’s largest organization. In fact, this decision is directly related to the donnybrook occurring in the Republican presidential primary over Bain Capital. Eventually, voters will determine whether a Washington insider or someone with more private-sector experience than public-sector service will face off against President Obama.
Whoever gets the nod from the GOP will certainly reiterate that Mr. Obama’s resume is totally deficient in private-sector experience. In fact, the president has only “organized” a community, not a corporation. His deficit in running a large operation has caused him to engage in on-the-job training with the nation’s finances, which has resulted in annual deficits of more than $1 trillion, a national debt that has grown to more than $15 trillion and an impending $1.2 trillion increase in the debt ceiling. The constant threat of tax increases and the plethora of regulations issued by the administration have created tremendous uncertainty and trepidation for entrepreneurs and investors.
On the other hand, the Republican candidates also vary greatly in their management expertise. Four of the remaining candidates have spent most of their lives in politics, either as elected officials or as Washington insiders, while the other two have spent more time in the private sector than in the public sector.
The question for voters in South Carolina, Florida and eventually around the nation is: Which kind of experience will provide the best leadership to help restore fiscal sanity to Washington? Do Americans want a Washington insider or career politician as their next president, or do they want an entrepreneur who has demonstrated that he is not afraid to make difficult management decisions in order to turn around a failing enterprise? It is not just a matter of who is the “most conservative” Republican candidate; it is also about who has the most relevant experience for the job.
Newt Gingrich, while not alone in his criticism, has been the most vociferous and selective detractor of Bain Capital. It is neither useful nor accurate to distinguish one type of private enterprise from another, particularly when conservatives think the private sector can always make better decisions about investment than the government. The former House speaker has cast himself as the bold conservative heir to the mantle of President Reagan. If so, he is deliberately omitting or obfuscating what the latter said about entrepreneurs.
Reagan noted that entrepreneurs have made the country “uniquely productive” and that they have the vision and courage to “take risks and faith enough to brave the unknown.” He commented that he would rather hear about the “generosity and creativity” of business instead of the greed. Reagan also said there should be more emphasis on how “entrepreneurs don’t have guaranteed annual incomes. Before they can turn a profit, they must anticipate and deliver what consumers want … before entrepreneurs can take, they must give.” That is the traditional conservative view of private enterprise.
The option for primary voters over the next several weeks is the same as the choice for all voters on Nov. 6. From a management perspective, the decision is between Washington insiders with little or no private-sector business experience and a skilled business executive who, in Reagan’s words, will have the vision, courage and creativity to make the difficult decisions necessary to stabilize the federal government’s finances. If voters make the right choice, perhaps next year, the GAO can finally present a true picture of how the government is spending the taxpayers’ money and the nation can be set on a path to fiscal health.
Thomas A. Schatz is president of the Council for Citizens Against Government Waste.