Good as Goldsmith

We attended the Crain's breakfast that hosted Steve Goldsmith, the new deputy mayor of operations-and while we didn't agree with everything he said, we were impressed with his flair for innovation and re-inventing government. In this regard, the NY Post's take on the man yesterday-labeling him a hatchet man-was off base: "City government is going to get a lot smarter and leaner to cope with crushing financial challenges next year -- so FDNY company closings are again on the table, and fees for residential sanitation pickups can't be ruled out, Deputy Mayor Stephen Goldsmith said yesterday. In his first major speech since taking office last month, Goldsmith told business executives at a Crain's New York breakfast that he's rushing to re-engineer as much of government operations as practically and politically possible to prepare for the fiscal 2012 budget year, when the city faces a $3.3 billion deficit and the loss of hundreds of millions of dollars in federal stimulus funds."

In our view, Goldsmith's arrival is eight years overdue-and his interest in reforming urban governance arrives too late in the Bloomberg-extended-term; but better late...What struck us most was his belief in government intrapreneurism-generating competition so that government services are delivered more efficiently and with less cost. He discussed the concept of privatizing garbage collection, and related how in Indianapolis he used the threat of such a move to improve the productivity of the municipal labor force. He also stated his distaste for monopolistic situations-both private as well as public.

Clearly, as the Insider reported yesterday (subsc.), Goldsmith is ready to streamline government and try to make it more efficient: "The Bloomberg administration is systematically examining city expenses as it prepares to close next year's $3 billion budget deficit without the benefit of leftover surpluses. “You name an expense item, we've got a working group attached to it,” Deputy Mayor Stephen Goldsmith said during yesterday's Crain's Breakfast Forum. “I'm reasonably confident that they'll result in significant savings.”

In addition, the new deputy talked about developing public-private partnerships-relating how, in data collection the city has roughly 50 different centers devoted to its collection and dissemination; with a poor handle on efficient out put. He also told the Crain's audience that there are 33 HR specialists for every city worker-implying that there is great redundancy that could be streamlined.

On the controversial issue of congestion pricing, however, Goldsmith lost us saying that he feels that it is a good idea to use, "pricing signals to change behavior." In our view, that's simply a fancy phrase to label what is in reality nothing more than a tax-and taxes are always efficient at changing behavior-as the sales tax effectively sends NYC shoppers out to the burbs in the pursuit of cheaper goods. Goldsmith didn't get into this dicey area.

But, if his mindset is allowed to take hold here in New York, we can see him taking the lead on reducing the unnecessary regulations that cripple small businesses and reduce their productivity. There was little from the new deputy on the role of business in general, understandably so since his portfolio is operations.

All in all, Goldsmith was a breathe of fresh air-and an answer to our call for an innovative approach to city governance, something that's been missing over the past eight years. We look forward to seeing how he will seek to implement some of his reforms-and will closely monitor how his theories of innovation clash with the hidebound NYC realities. Given our ongoing lamentations about the current administration, we hope that our shout out to Goldsmith doesn't cause him any grief on the left side of City Hall.