Daniels gathered his agency heads on his first day and told them they were henceforth to pursue a single organizational goal—all successful businesses unite their efforts behind a goal, he said. His was this: “We will do everything we can to raise the net disposable income of individual Hoosiers.”And he is working in ways big and small to achieve that goal.
He treats waste in government as a moral offense. “Government isn’t a business, and it shouldn’t be run as a business,” he said. “But it can be more like business. It has a lot to learn from businessmen.” Government operates without the market pressures that produce efficiency and increase quality. The challenge for government leaders is to produce those pressures to economize internally, through an act of will. “Never take a dollar from a free citizen through the coercion of taxation without a very legitimate purpose,” he said in an interview last year. “We have a solemn duty to spend that dollar as carefully as possible, because when we took it we diminished that person’s freedom.” When you put it like that, overspending by government seems un-American.It's almost Biblical - saving in the fat years so that you have something left to help you in the lean years. How few politicians practice that.
When Daniels took office, in 2004, the state faced a $200 million deficit and hadn’t balanced its budget in seven years. Four years later, all outstanding debts had been paid off; after four balanced budgets, the state was running a surplus of $1.3 billion, which has cushioned the blows from a steady decline in revenues caused by the recession. “That’s what saved us when the recession hit,” one official said. “If we didn’t have the cash reserves and the debts paid off, we would have been toast.” The state today is spending roughly the same amount that it was when Daniels took office, largely because he resisted the budget increases other states were indulging in the past decade.
No other state in the Midwest—all of them, like Indiana, dependent on a declining manufacturing sector—can match this record. Venture capital investment in Indiana had lagged at $39 million annually in the first years of this decade. By 2009 it was averaging $94 million. Even now the state has continued to add jobs—7 percent of new U.S. employment has been in Indiana this year, a state with 2 percent of the country’s population. For the first time in 40 years more people are moving into the state than leaving it. Indiana earned its first triple-A bond rating from Standard and Poor’s in 2008; the other two major bond rating agencies concurred in April 2010, making it one of only nine states with this distinction, and one of only two in the Midwest.
Indiana, Daniels likes to say, is the “peony in the parking lot.”
I love that, in answer to criticisms that he is squeezing education, he provides citizens with the tools to demand good habits from their local school districts.
n fact, the governor’s office has publicized a “Citizens’ Checklist” that people can take to their local school boards to see if school officials have made every possible economy. Citizens in Vincennes need to take that list and get answers, he said. The list is filled with questions. Have the administrators “eliminated memberships in professional associations and reduced travel expenses”? Have they “sold, leased, or closed underutilized buildings”? Have they “outsourced transportation and custodial services”?Can you imagine if every school board meeting or demand for increased taxes to pay for education was met with such questions?
“I want citizens to understand,” he said. “When people start demanding we spend more money, they’re saying, ‘We want to raise your taxes.’ And the citizens should say, ‘Okay, tell me. Which one of my taxes do you want to raise?’ ”
If only we had more governors capable of acting this way throughout the country. We have a few who are making a start, but the economic collapse is forcing voters to look for more such politicians whose main goal is increasing citizens' net disposable income rather than looking to government to supply all needs. I just fear that the states in real distress like California, Michigan, or New York has been so long in the control of the public employees' unions and liberal politicians that it is institutionally impossible to enact the sorts of changes that Daniels has been able to put in place in Indiana. For example, how many governors would have the power unilaterally to do this?
The reforms began instantly. On his first day Daniels reversed an executive order signed by a Democratic predecessor granting collective bargaining rights to state employees. Union membership plummeted overnight. “I think they were happy to have the extra thousand dollars that would have gone to dues,” Kitchell said. Decertifying the public-employees’ union has spared Indiana pressures that have crippled other state governments. Unhindered by union demands, the governor instituted a “pay for performance” scheme, rewarding state employees who met explicit goals with raises ranging from 4 percent to 10 percent. The salaries of underperforming employees stayed flat. No one was fired, but every time a job went vacant a supervisor had to justify hiring a replacement. The number of state employees has fallen from 35,000 to under 30,000, back where it was in 1982.The man is a contrast to President Obama because, unlike Obama whose main claim to executive experience was running his presidential campaign, Daniels has actually worked and led in private business and in government. Another way that he is the un-Obama is his ability to relate to and befriend ordinary folks in the most natural of ways. Ferguson describes how Daniels rides his motorcycle around the state and when he stops to eat, he goes right up to people in the diners and fast food joints and sits down to talk to them about how things are going in their lives. Somehow, I find it hard to picture the cerebral Obama sitting down at a truck stop to talk to people that he privately disdains as bitterly clinging to their guns and religion. Yet Daniels seems to do this naturally and continually. Of course, a president can't go down the highway on his motorcycle, but he can engage in more than photo op encounters with ordinary folks.
Ferguson goes on to discuss Daniels' presidential prospects. It is not clear that Daniels would even run for president. Though he's said several times that he isn't interested in the job, his words are similar to his protests that he wouldn't run for governor before he actually did throw his hat into the ring. And even if he were elected I fear that the national bureaucracy would be a much tougher nut to crack than that in Indiana. We've had presidents since Jimmy Carter talk about how they were going to come to Washington and reorganize or reinvent government. They've been vowing to cut waste, fraud, and abuse for decades and the size of the federal government inexorably goes up and up. Could a President Daniels stem that growth? I don't know, but it would be a lot of fun to watch him trying.