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October 04, 2005
Corporate Leadership
By mid-September, corporations had donated more than $300 million to Katrina relief efforts. It’s intriguing to compare that number with the $250 million that remained to be spent on critical unfinished aspects of the 1995 Southeast Louisana Urban Flood Control Project, known as SELA. Between 1995 and 2005, the Army Corps of Engineers spent $420 million on SELA, $50 million of which came from local and state coffers. With 20/20 hindsight, one imagines scores of corporations would gladly have ponied up the difference .
Preparedness, though, comes with hard choices made ahead of time – not afterwards. And, while executives and employees across America reached into their personal and corporate pocketbooks to lend a hand to the victims, few would have supported calls for higher taxes (whether corporate or personal). We know that the prevailing political winds over the ten years of SELA had businesses supporting tax cuts instead of tax increases.
In our nearly $12 trillion economy, the $250 million to complete SELA looks like chump change – or, a needle in the haystack we call ‘government’.
And, that is significant. Elections are won and lost more on big messages (“Cut Taxes”, “It’s Your Money”, “Keep America Safe”) than details. It’s difficult to believe any candidate running for, say, president, over the past ten years would have spent money, gotten much air time or gained a lot of support for a message such as “We need to fully fund SELA”.
What about candidates for mayor or governor? Yes, it seems more likely that specific references to SELA would have been more believable. Yet, and this seems obvious, when voter turnout for state and local offices hovers between 10 to 20%, victorious electoral strategies tap into the emotional appeals that energize the base. Again, “Cut Taxes”, “It’s Your Money”, “Keep America Safe” – or, looking ahead a bit “Competence in Government” and the like).
Voters may go to the polls with single issues on their minds (e.g. taxes, abortion, Iraq and so forth). But few if any get riled up because of a single issue like ‘finish the job with SELA”. That is just not going to happen in our busy world of markets, networks, organizations, friends and family.
Which means that we, the voters, end up having to rely on government officials and others whose job, duty or interest lies with worrying over things like the infrastructure on the Gulf Coast.
We’ve heard much in recent weeks about the large percentage of our nation’s economy that has depended on the Gulf Coast. A corollary points to the interest -- and the job -- of businesses from oil and energy to food and retail to ensure we all gain from a ‘Gulf Coast that works’.
And, so we come full circle. Elections are won on generalities, not specifics. Generalities favor messages about cutting taxes, not raising them. And about ‘letting the market fix things” not ‘government’. The job of building and maintaining infrastructure like levees and highways and so forth does not belong to any market. It belongs to government. Government fails to do that job without sufficient resources. Government failures reinforce the messages that government doesn’t work, only the market does. And, government failures reinforce the messages about cutting taxes and ‘it’s your money’.
It’s a spiral – but one that heads down, not up. There are many ways to reverse the spin. One surely would be for business leaders to revisit what ‘corporate citizenship’ means in this totally interconnected world of markets, networks, organizations, friends and family. Quarter-by-quarter profits might rise in a fiscal environment of low taxes. But, ultimately, government cannot function without resources -- and businesses, like the rest of us, are dependent on the infrastructure that government must build and maintain.
The $300 million businesses have contributed is an interesting number when compared with the $250 million that remained to be spent on SELA. But an even more interesting and compelling number is this: how much business -- how much profits -- will be lost between the time Katrina hit and the time the Gulf Coast’s contribution to America’s economy is back to pre-Katrina levels?
That answer will dwarf both the $250 million and the $300 million numbers.
