From: Duncan Frissell <frissell@panix.com>
Date: Sun, 2 Feb 1997 07:10:48 -0800 (PST)
To: cypherpunks@toad.com
Subject: IRS Can't Compete
Message-ID: <199702021510.HAA24723@toad.com>
MIME-Version: 1.0
Content-Type: text/plain


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Note proof that government agencies are running up against serious problems
competing with market actors even though they have the guns.  

- From today's NYT:
February 1, 1997
Leaders of I.R.S. Panel Urge Sweeping Overhaul of Agency

By DAVID CAY JOHNSTON

The IRS had publicly defended its management of computer modernization until Thursday, when Arthur A. Gross, who was hired last year as an assistant commissioner of the agency to rescue the effort, told the restructuring commission that the new systems being developed "do not work in the real world."

Gross also said the IRS lacked the "intellectual capital" to modernize.

["intellectual capital" = brains]

Kerrey said that although the modernization project was bigger than any corporate computer system the government would have a hard time hiring the necessary talent to manage the project. "The market is bidding up the price for people who have these skills, and we just can't dole out big salaries," he said.

Executives who oversee information systems make as much as $378,000 in salary and bonuses, according to William M. Mercer, the nation's largest pay consulting firm. That is more than twice the highest federal salary and bonus, and corporate information executives typically also get options and other incentive payments.

******************

Translation - since the Feds can't afford to pay CIOs what they're worth, and
governments don't offer stock options, they can't get the talent they need
to keep up with the market.  We are talking about senior management here.
If they try and respond by contracting senior management out, eventually the
institution disappears as a government institution.  

DCF
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