Four business stars aiming for governor offer good ideas but false hopes
David Stemerman, a highly successful hedge fund manager from Greenwich, figured he could save Connecticut. He vowed to close his fund and on Sept. 26, filed papers with the committee name “David Stemerman for Governor, Inc.”
Inc.? Really? That’s a message right there. Two days later Stemerman gave his campaign $1.8 million - using a credit card. Either he badly wants more airline miles or he firmly believes his business acumen is exactly what the state needs now.
The Republican has never held or even run for public office. That used to be an occasional novelty in Fairfield County, where wealthy political neophytes such as Ned Lamont, Jack Orchulli, Brook Johnson, Tom Foley and Linda McMahon would swoop into races for U.S. Senate or Governor and win primaries but not general elections.
Now Stemerman is one of four executives declared or exploring a run for governor in 2018 -- all with stellar corporate and financial resumes, all having lived and worked in Gold Coast towns, all between ages 45 and 55, and all talking about running the state more like a business.
The others are Republican Bob Stefanowski of Madison, a turnaround specialist who held high-ranking posts at General Electric and UBS; Republican Steve Obsitnik of Westport, a nuclear engineer and founder of software and tech services firms making governments and private companies much more efficient; and Dita Bhargava, a Greenwich Democrat and former Wall Street trader, fund manager and client negotiator who later moved to the nonprofit sector.
None of the four has ever held elected office and only Obsitnik has made a serious effort before, winning the nomination to challenge Rep. Jim Himes, D-4th District, in 2012.
They differ on the right roles for the state - in overall spending, for example -- but their words about business and government sound similar.
“We know that the status quo has not worked,” said Bhargava, who burst on the scene a few weeks ago with a slickly produced video featuring her Indian immigrant mother who raised the family on her own. “It’s time to bring someone from the outside who has had different experience in business, in negotiations…to give taxpayers the best returns on their money.”
Here’s the rub: Connecticut’s fiscal hole is so deep, its demographics and industry mix so far askew, that leadership and new ideas won’t fix this crisis, not anytime soon. Besides, government is not business and doesn’t respond to the same levers as business. When I suggested all that to these candidates, they shot back strongly.
“I’m not pessimistic at all. I think with the right leadership we can turn our state around,” said Bhargava, 45, who is still exploring a run and hasn’t declared her candidacy.
“A leader sets tone, tone defines a culture and culture is your destiny,” said Obsitnik, 50, who is also still exploring. “I’m able to listen to a lot of people in different constituencies and draw them together around a common vision.”
Stefanowski, 55, was even more blunt: “I’m not a career politician. I’ve got a business background, I know how to fix this state.”
He has a special problem, which is that it appears he hasn’t voted in years. Columnist Kevin Rennie pointed that out in the Courant this week and I confirmed it with public records. Stefanowski declined to talk about it other than to say he’s not a politician. It reminded me of the time I applied for a job covering the retail industry and told the editors I never went shopping. They passed me over, rightly.
These are four smart and successful people, clearly among the state’s bright lights. One of them might well be the best choice for governor. The problem is that all this talk about turning the state around using business practices is creating a false hope.
“Working on Wall Street and making a fortune and running a business is great,” said Gary Rose, a political science professor at Sacred Heart University. “But I’m not so sure it’s conducive to getting a budget passed…People might think having an outsider is attractive but it doesn’t necessarily translate to political leadership.”
Certainly there’s a charm to political inexperience -- especially in this election. We have historic gridlock at the state Capitol, which makes the insiders look terrible. We have a stunningly weak field of traditional candidates for the governor’s mansion, so far at least. Among more than 25 people in the race, none has ever held an elected statewide office, none has served in Congress and only one has run a big city -- a convicted felon. (Republicans at least have an excuse, as they rarely win those offices around here.)
President Donald Trump cuts both ways in the game of judging neophytes. He won the big prize with no experience, but his boorish, knee-jerk behavior and disdain for facts further divides the nation, makes it impossible for him to get anything through Congress and reflects poorly on legitimate business executives running for office.
Why is leadership and business success not enough? Contrary to polling and belief, we’re not suffering from mismanagement by Gov. Dannel P. Malloy. On the contrary, the former Stamford mayor has quietly and scientifically pared the size of the state bureaucracy by more than 10 percent, with much more to come. He has reduced the number of agencies and cut, yes, cut, regular government spending.
What we have is a crush of old debt, health care costs and pension liabilities that built up over decades. Other states that have these burdens succeed where we fail for one main reason: They have big cities and hot college towns that attract young, educated people and high-growth companies.
That’s a problem solvable by smart business practices only in the very long term, way longer than the next governor will serve.
Why can’t they work their business magic in Hartford? Stefanowski, for example, took a GE financial company in media and telecommunications that was losing $100 million a year and reshaped it into a $300 million-a-year cash cow. The secret: “We shifted out of dying industries that were getting overtaken by technology.”
Bingo! Like most turnarounds, the key was to stop doing the thing that wasn’t working, then execute. That’s how business works. It works for government only on the fringes, such as economic development and some kinds of regulation. Malloy has, in fact, cut environmental permitting times way down.
But unlike business, the state can’t exit cash sinkholes such as tending to troubled children, keeping old people with no money in nursing homes and delivering services to people with developmental disabilities.
As a columnist new to the part of the state that spawns vast private wealth, I’m going to look closely at business ideas from these four candidates and lots of other corners. They’re hugely valuable. But they’re not a magic bullet.