Former Missouri Governor Visits Harris as First Executive-in-Residence

By Ed Finkel

For the Midwest to revive its economy for a global age, the 12-state region needs to work collaboratively rather than as individual states, said former Missouri Governor Bob Holden, who recently gave a series of three lectures to graduate students at the Harris School of Public Policy as the first Executive-in-Residence at the school’s Center for Municipal Finance.

“We’re now part of the global economy; we can’t play by the rules we played by before and be successful,” said Holden, now chairman of the Midwest US-China Association. “Your generation will be forced to think outside the box and come up with new paradigms on policy, law, regulations and economic development in a world changing dramatically every day. Our ability to do that as a region is going to determine whether we will be successful in the future.”

Key to that ability will be improving the prospects of middle-class workers who lose their jobs to workers in other countries--or, more often, to automation, Holden said. “When 500 people can do the same thing faster and better than 3,500 [due to technology], what do you do with the other 3,000 people who are 45, 50, 55 years old, and the last thing they want to do is retrain for three years, or move out of their communities, to be successful,” he said. “What type of social programs do you put in place? How do you help them be productive?”

It’s both a policy and a political challenge, Holden said. “People who feel like they’re being stepped on and shafted by the process are going to say, ‘It’s time we had a major change,’ ” he said. “That’s tied to what we had in this last election.”

The Executive-in-Residence program will bring elected and appointed government officials as well as leaders in the municipal bond industry, who will spend between three and five days on campus lecturing, meeting one-on-one with students, and meeting with prominent public policy experts on the University of Chicago campus, said Michael Belsky, senior fellow and executive director of the Center for Municipal Finance.

The center hopes to host five such guests in 2017, including a public-sector chief financial officer to talk about governmental accounting, a municipal bond executive to delve into handling pensions, an attorney who will discuss municipal bankruptcy, and an expert on treasury management, he said.

Holden also spoke on the politics of winning statewide elections and the governor’s role in budgeting at lunchtime lectures during his three-day visit. “[Holden] was governor during tough fiscal times,” Belsky said. “I think the students have received a lot of insight. They will be in roles where they have to make tough budget decisions.”

Holden recalled that he faced a $500 million deficit immediately upon taking office and 18 days later, he announced the deepest core budget cuts in the state’s history. During his time in office, he cut more than $1 billion out of a $6 billion general revenue budget.

“If you’re a Republican governor making cuts, you’re appealing to your base, who philosophically believes in less government,” he said. “Whereas if you’re a Democratic governor, you’re undermining your base every day you make cuts, in education and healthcare particularly, with very few options.”

Missouri’s budget, which Holden figures is similar to those of other states, draws about 35 percent from general revenue, 33 percent from federal funds including matching dollars for programs like Medicaid, and 32 percent from earmarked funds like gasoline taxes, he said. Of that money, 47 percent went toward education, 28 percent to health and social services, and 11 percent to public safety--87 percent in those three categories alone.

So when a governor makes cuts, Holden said, “You’re put into the position, are you going to cut education and make parents mad, or cut health programs and lose [matching] federal dollars, or come up with a new corrections program and release people from prison early, or not put them in as long? As a governor, you have no good options.”

Holden tried to raise taxes on tobacco and alcohol but those industries joined in an “unholy alliance” to thwart him, he said. “That’s the politics you’re dealing with.” So he ended up reluctantly making cuts focused most heavily on higher education.

To become elected in the first place, Holden rose through the ranks by spending six years as a state representative, eight years as state treasurer, and various stints as a staffer for state treasurers, U.S. Senator Tom Eagleton, and former House Minority Leader Richard Gephardt.

“You couldn’t at that point in time have had a better resume,” Holden said. “I kept my nose clean and was never involved in shenanigans, personal or professional. At 18, 20, 22 years old you need to think about what you’re going to be doing at 30, and what do you need to do now to give yourself the best shot?”

Holden won his seat in the state assembly as a Democrat in a heavily Republican district by campaigning door to door and talking to people. “If they had a Republican sign, I talked to them more,” he said. That led people to think, “He may be a Democrat, but he’s OK.”

He continued that approach in a different sense when running for statewide office while raising money over the phone. “My staff chastised me for spending too much time talking on the telephone,” Holden said. “I said, ‘If I miss my [fundraising] target, talk to me.’ I didn’t want to have a ‘hi, how much are you going to give me, bye,’ conversation.”

Holden said he was honored to be asked to serve as Executive-in-Residence. “Without education, and without professors, I would have never had the opportunity to do the things I’ve done,” he said. “I have a tremendous amount of respect for the University of Chicago. It truly is a premier university in the world. … To me, the key to our success as a region, and as a nation, is developing young people to be competitive partners throughout the world, and start their own businesses and set their own futures.”