🔒Let’s explore Lehman’s economic-development credentials

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Should David Lehman be Connecticut’s next economic-development commissioner?

So far, the answer to that question has largely been based on whether or not Lehman — and his former employer, Goldman Sachs — is partially to blame for last decade’s financial crisis.

Lehman, a former Goldman Sachs partner, has come under intense scrutiny for his role overseeing some of the complex financial products that helped sink the U.S. and world economies during the 2007-2008 financial crisis.

While it’s an important issue for state lawmakers to investigate as they determine the fate of Gov. Ned Lamont’s pick to lead the state Department of Economic and Community Development, I think there’s a larger, more important question being overlooked: What qualifies Lehman for the job in the first place?

There is no doubt Lehman, who rose to a managing-director rank at Goldman in his 20s, is incredibly sharp, but why does his Wall Street-banker background qualify him to help determine and implement policies that will shape Connecticut’s future economy?

That is a more important question the public should be asking, and there may be no real black-and-white answer, because the role of economic development itself — especially in the hands of government  — is a nebulous concept.

For no matter how much state government “experts” try to stimulate or help shape Connecticut’s economy, much larger forces are driving the train, and no economic-development strategy is more important than having a competitive tax and regulatory climate and a highly skilled workforce.

Even still, there are different philosophies on how the state ought to help promote growth, and the public should hear more about Lehman’s vision, rather than trying to determine if he was responsible for peddling toxic securities a decade ago.

Personally, I thought Lehman’s choice as DECD commissioner was a strange one. It was obvious his Goldman Sachs background would be a political liability for Lamont, and just as I wouldn’t hire an accountant to be my lawyer, I questioned how being a Wall Street banker qualifies him to lead the state’s economic-development strategy. While I believe state leadership posts must go to smart people, intelligence alone shouldn’t be the only qualification.

For example, when top corporate executives decided a few years ago they wanted to shift the MetroHartford Alliance’s focus more sharply on economic development, they didn’t bring in another high-profile CEO to lead the regional chamber; they searched far and wide for someone with economic-development chops.

That led to the hiring of David Griggs, who was previously the vice president of business investment and research at the Greater Minneapolis St. Paul Regional Economic Development Partnership.

Gov. Dannel P. Malloy actually followed a similar strategy as Lamont when he brought in a high-profile business executive to lead DECD. In an interview before she left office, Catherine Smith, who was previously CEO of Windsor insurer ING U.S. Financial Services (now Voya Financial), admitted she “didn’t know anything about economic development,” before she took the job and had to learn quickly while trying to help shape key economic policies.

Her tenure was spotty, as economic growth lagged during Malloy’s eight years in office. She also helped oversee a vast expansion of the state’s corporate welfare policies, doling out hundreds of millions of dollars to private companies hoping they would add jobs or not flee to lower-cost states.

I think that strategy was ineffective. Lamont said he’d like to rely less on corporate welfare. Where does Lehman stand on the issue?

Questions like that are undoubtedly being asked and answered, but much of the media’s focus hasn’t been on the substance of Lehman’s philosophies.

He has communicated some of his views. For example, during his Feb. 26 testimony in front of the Executive and Legislative Committee, which approved his nomination by an 8-0 vote, he said incentives wouldn’t be his first priority because they can represent a “zero-sum” game. However, he said he wouldn’t do away with incentives but could potentially change the way they are used.

He also said his main two priorities include helping make sure the state has pro-growth policies that “encourage innovation, risk taking, and entrepreneurship” and better marketing the state as a place that is hospitable to business. He also wants to boost the state’s tech sector.

My question is, how do you make all that happen? Let’s spend more time exploring that.

Editor’s Note: This column has been updated from the version that appeared in HBJ’s March 11th print issue to include David Lehman’s testimony in front of the Executive and Legislative Committee.