Putnam is committed to outstanding investment performance through active management to help investors achieve their financial goals. During the Covid-19 pandemic, we found our approach aligned closely with that of officials leading the Commonwealth of Massachusetts, and especially with Governor Charles "Charlie" Baker. As the Governor concludes his service this year, we were happy to host his address to the New England Council, a non-partisan policy center, and hear his reflections on accomplishing an agenda — on getting things done.
We believe Charlie Baker's insights are worth sharing as a guide and inspiration for current and future leaders of the financial services and asset management industries. As Putnam President and CEO Robert Reynolds expressed, "Governor Baker is widely recognized as one of the most popular governors in the United States. Throughout his two terms as governor, he has emphasized pragmatic policies that build consensus across the political spectrum and drive sustainable and inclusive economic growth that benefits business, investors, employees, and other stakeholders. He is a man of results."
Grasp opportunities to prepare for the unexpected
In his remarks, Governor Baker cited multiyear legislative initiatives to enhance broadband access across Massachusetts. These actions ultimately prepared communities for the era of remote work that emerged during the Covid pandemic.
The regional economy withstood the impact of the pandemic, resulting in higher-than-average economic growth and workplace participation in the post-pandemic period. Among the 50 states, Massachusetts had above-median growth in GDP per capita in 2021 and ranked near the top even as the economy slowed in early 2022 (source: U.S. Bureau of Economic Analysis).
Have a vision for the future
Another factor in the state's resiliency is the preponderance of "knowledge industries" in the region — education, health care, biotech, information technologies, and financial services. These future-focused sectors are well suited to hybrid employment and digital collaboration.
Stay active as conditions evolve
Eventually, the prevalence of these high-value economic activities and the high wages that come with many of them creates new challenges and opportunities, Governor Baker stated. The cost of living, particularly the cost of housing, has risen higher in metro Boston than in many other cities. For many years, job growth in absolute numbers has been more robust in the Sunbelt South compared with the West Coast and New England. While much of this shift has traditionally impacted lower value-add activities, the Covid era of work-from-anywhere jobs raised the possibility that many high-value, network-based economic activities could migrate to different regions and even across global borders.
"We cannot assume that everything's going to go back to the way it was before Covid," Baker said. "Hybrid work and work from home are going to be a part of the future." To remain competitive, the region will have to enhance public policies that increase affordable childcare, eldercare, and housing, particularly in urban centers. Tax policies need to incentivize investment while reducing tax burdens on lower-income workers.
Develop public and private partnerships
Private industry has a vital role to play in developing and implementing policies, notably in workforce development and the provision of benefits focused on inclusion, education, health care, worker retraining, management of student loans, and retirement savings.
Prior to his two terms as governor, Baker spent a decade as CEO of Harvard Pilgrim Health Care.
Focus on details, even those outside the spotlight
Practical solutions have been a hallmark of his experience in government, the Governor stated. To illustrate this point, he cited government investment in systems and infrastructure dedicated to reliability and safety, such as digitizing the Boston metro rail system.
Massachusetts was scheduled to receive some $10 billion as part of federal infrastructure legislation passed by Congress at the end of 2021. This funding would be applied to traditional infrastructure such as roads, public transportation, and the construction of new bridges from the mainland to Cape Cod.
As Baker pointed out, some of the most consequential infrastructure investment from this funding would be nearly invisible to many voters. "I'm a total nerd about environmental infrastructure," he said. "Massachusetts has thousands of culverts and combined sewer overflow [CSO] systems that were built in a different era and are now failing." He noted that with more frequent severe storms, these systems needed major renovation to impede overflows into vulnerable bodies of water.
Pragmatism over politics
Asked to cite his greatest achievement while in office, Governor Baker noted his "focus on the work and on the issues, policies, and performance — and not on the politics. To some, that may make us boring, but I'm okay with that."
Results: Getting Beyond Politics to Get Important Work Done, by Charlie Baker and Steve Kadish, Harvard Business Review Press
"This book — written by Charlie Baker, governor of Massachusetts, and Steve Kadish, former chief of staff for Baker — is a step-by-step manual that leads to sustainable outcomes, examining how to move from identifying problems to actually achieving things." — Financial Times
In his book, Governor Baker cites four qualities essential to a foundation for achieving results — trust, humility, respect, and compromise. He also lays out a personal recipe for achieving policy results.
- People are policy. Hire the leaders and build the team.
- In developing policy, follow the facts. Gather evidence to uncover the pain points.
- To achieve results, be transparent and be pragmatic. Measure, evaluate, adjust, repeat.
- President John F. Kennedy said that success in public service is measured by courage, judgement, integrity, and dedication.
For informational purposes only. Not an investment recommendation.
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