Market-Based Models Are Key
to Transforming U.S. Government to a 21st Century Organization...
Newt Gingrich |
|
|
Newt Gingrich, former Speaker of the
U.S. House of Representatives, discussed his vision for transforming government
into a 21st century organization at a recent meeting for Freddie Mac employees.
In our feature interview, Gingrich explains the unique role of the Government-Sponsored Enterprise (GSE) model.
Q: You advocate a profound transformation in the model of
government, from what you call the current model of "Bureaucratic Public
Administration" to a "21st Century Entrepreneurial Public
Management" model. Let's start with the bureaucratic model – what is it,
and what is wrong with it?
Q: A key element of the entrepreneurial model is using the private sector where possible to save taxpayer dollars and improve efficiency. And you believe the GSE model provides one way to use the private sector.
Gingrich: Some activities of government – trash collection is a good example – can be efficiently contracted out to the private sector. Other functions – the military, police and fire protection – obviously must remain within government. And then there are areas in which a public purpose would be best achieved by using market-based models. I think GSEs provide one of those models. I like the GSE model because it provides a more efficient, market-based alternative to taxpayer-funded government programs. It marries private enterprise to a public purpose. We obviously don't want to use GSEs for everything, but there are times when private enterprise alone is not sufficient to achieve a public purpose. I think private enterprise alone is not going to be able to help the Gulf region recover from the hurricanes, and government will not get the job done in a very effective or efficient manner. We should be looking seriously at creating a GSE to help redevelop this region. We should be looking at whether and how the GSE model could help us address the problem of financing health care. I think a GSE for space exploration ought to be seriously considered – I'm convinced that if NASA were a GSE, we probably would be on Mars today.
Certainly there is a lot of debate today about the housing GSEs, but I think it is telling that there is strong bipartisan support for maintaining the GSE model in housing. There is not much support for the idea of removing the GSE charters from Freddie Mac and Fannie Mae. And I think it's clear why. The housing GSEs have made an important contribution to homeownership and the housing finance system. We have a much more liquid and stable housing finance system than we would have without the GSEs. And making homeownership more accessible and affordable is a policy goal I believe conservatives should embrace. Millions of people have entered the middle class through building wealth in their homes, and there is a lot of evidence that homeownership contributes to stable families and communities. These are results I think conservatives should embrace and want to extend as widely as possible. So while we need to improve the regulation of the GSEs, I would be very cautious about fundamentally changing their role or the model itself.
Q: This is not a point of view one normally associates with conservatives.
Gingrich: Well, it's not a point of view libertarians would embrace. But I am more in the Alexander Hamilton-Teddy Roosevelt tradition of conservatism. I recognize that there are times when you need government to help spur private enterprise and economic development. Look at our own history. The government provided railroad land grants to encourage widespread adoption of what was then the most modern form of transportation to help develop our country. The Homestead Act essentially gave land away to those willing to live on it and develop it. We used what were in effect public-private partnerships to bring telephone service and electricity to every community in our nation. All of these are examples of government bringing about desired public purposes without creating massive, taxpayer-funded bureaucracies. To me that is a pragmatic and effective conservative approach. Read More
Former Speaker of the U.S. House of Representatives Newt Gingrich is an author, commentator, and founder of the Center for Health Transformation, and the Gingrich Group, a communications and consulting firm. He is an advisor to Freddie Mac.
April 24, 2007
Source
