Best Book I’ve Read This Year:
The Big Short by Michael Lewis
Red, White, or Beer?
Neither, don’t drink
Favorite Vacation Destination:
WSJ or NYT?
Regarded by many as the ultimate influencer, Opperman has made noteworthy careers in business, investing, law, and politics, and served in leadership roles on many boards of directors. He became an influential lawyer before serving as president of West Publishing, which he grew and eventually sold to Thomson Reuters. He leads Key Investment (Key owns MSP Communications, which publishes Twin Cities Business) and serves on the boards of TCF Financial Corp., Thomson Reuters, Blue Cross and Blue Shield of Minnesota, and the American Civil Liberties Union of Minnesota. He also has been an active, behind-the-scenes leader in Democratic political campaigns in Minnesota and Washington, D.C., since the 1960s.
What are your thoughts about doing business in Minnesota today?
If you have businesses that [require] a skilled workforce and high degrees of education, or you’re involved in something that fits the nature of our business climate—high tech, information technology, obviously medical devices—if you’re in those areas, this is an excellent place to do business. And there are plenty of opportunities. But no one place is the best place to do all kinds of businesses.
Is the state’s tax climate becoming onerous? Are we stigmatizing and harassing the affluent?
Are high taxes driving business out of the state? No. Businesses—of the kind I was indicating [above] with high-skilled workforces—stay, expand, or are attracted to Minnesota by a number of different factors, of which taxes are very low on the list. . . . The places that have extremely low taxes aren’t places that people generally like to go, for a variety of reasons. So on a macro sense, I don’t think the tax climate is a deciding factor in the kinds of businesses that will do well here.
Most people I know are very willing to pay even more taxes if it goes for things that they think are justified, such as better higher education, K-through-12 education, and things that go to make our society more productive. I don’t know a lot of people that suddenly woke up yesterday and discovered that Minnesota was a high-tax state. They’ve known that for 30 years, or they wouldn’t be here.
However, the constant rhetoric attacking rich people, people that aren’t morally [willing] to pay their fair share, I resent. I resent the idea the government can determine their morals instead of mine. And I frankly think the constant effort to harass people of wealth has a secondary but negative effect. When people make their first big hit, their first big capital gain, you want them to stay here. You want them to fund the orchestra, to fund foundations. You want them to continue to contribute to our society, to start venture capital, to invest in new businesses. And if you chase those people out because they think they’re not wanted, or if you chase those people out or you don’t attract people who are mobile, you will have a decline in many of the amenities we’ve just been talking about.
Where do you think the health care is headed as an industry in Minnesota?
I chair the board of Blue Cross Blue Shield and any comments I make here, unless I say otherwise, are my own personal ones.
I think health care is a very exciting area. It’s a terrific area for Minnesota. We have tremendous assets for health care, health care delivery, for the medical-device community, all the way through things like HSAs and new financial models in the delivery of health care. We are, if not the leader, very close to it. This is a growth industry, and we are in the sweet spot of innovation and many years of proven excellence and experience. Properly handled and properly funded by private enterprise, this is an area that should keep Minnesota a very vibrant economic center.
How is it going to change? The Affordable Care Act clearly will get refined, but it’s clearly here to stay. With the growth of the exchanges and more people and more money going through the exchanges, you’ll attract nontraditional insurance entities. And that increased competition will do what I think competition does in the free market, which is to reduce cost and increase quality. There are a lot of kinks in that system. You can’t just start this from scratch and expect it to be perfect. But I think over two or three years, you’re going to see that as maybe the biggest driver of higher quality and lower costs for health care.
Why is the ACLU important to you and how are things trending in our society when it comes to personal liberties?
One of the reasons I belong and have been active in the ACLU is because we’re the only organization that speaks up for the Constitution. We sue the government. That’s pretty much what the ACLU does, on behalf, obviously, of the first 10 amendments.
It’s important that you stand up for the individual. Much of the impact of the growth of our entitlement society—caused by the growth of senior citizens and the programs that support them—is a never-ending, ever-enlarging growth in government. And I think you have to push back against that in areas of individual freedom. The group that has done that longer and more successfully than any other is the ACLU.
The ACLU’s work is often unappreciated by a large segment of the population. Why?
The founding fathers, when they wrote the Constitution, weren’t writing for the masses. It is an anti-democratic series of amendments. “Congress shall pass no law…” And so you are, in that situation, almost by definition, always standing up for unpopular causes or unpopular people. After all, if you are in a popular movement or you’re a popular cause or you’re in the majority, you probably don’t need any protection. Your numbers are your protection. And the founding fathers knew that.
And by the way, that is why this country is a source of innovation in the world. Over 30 percent of all intellectual property in the world is generated in the Untied States, with 5 percent of the world’s population. Why is that? Because we have individuals. We have people that understand individualism, stand up for themselves, and are allowed to do so. And there’s a direct connection.
And that’s why the Constitution, before it recognized individual rights in the first 10 amendments, in the body of Constitution recognizes intellectual property, patent and copyrights and trademarks, as part of the organic document of the Constitution. The first mention of property in our Constitution is intellectual property, property made by humans. And that’s exactly what the first amendment is directed to. So it’s no surprise, in my mind, why it is that we have this highly creative, highly individualistic society.
But by definition, when you stand up for the Nazis parading through Skokie, when you stand up for Madalyn O’Hair, the atheist, when you [fight] the 10 commandments being put up in Duluth in front of the courthouse—all of these are highly unpopular to the majority. That’s the whole point of the first amendment. And that’s what the ACLU is absolutely dedicated to defending.
As a longtime observer of politics, how would you relate today’s political climate to that of the ’60s and other periods you have lived through?
First of all, I’ll tell you my political yardstick that I use to answer that. I consider myself socially welcoming and fiscally responsible. So I’m not in favor of policies that discriminate against people, freeze people out, and treat them differently, anything that does not allow a person to be measured on what they do. On the other hand, we sometimes try to buy ourselves out of difficulties by having government expenditure, again, in places where I don’t think government expenditures ought to be.
The change in politics in the last 30 or 40 years has gone from good to mediocre, and primarily because of the loss of the moderate Republican consensus in our body politic. I think of Arne Carlson—on the Republican side, he represented the consensus of moderate, well-thought-out Minnesotans in the way they wanted their society to be. By the same token, Rudy Perpich did this on the Democratic side. I thought Rudy was one of our finest governors. And he had many of the same characteristics Arne does. He represented, again, I think, a consensus of moderate, well-thought-out, well-educated Minnesotans [on] what they wanted their society to be. We don’t have a lot of Arne Carlsons and Rudy Perpiches in public office today.
What has happened is you have people that are elected, particularly to legislative seats, from seats that are gerrymandered in such a way that they’re absolutely safe. And they cannot be defeated in a general election. This is the problem in Congress right now. Consequently, they are held hostage to the most vocal and most extreme wing of their particular party. And that has not been a good thing. That puts a premium on people who can yell and say shrill and, frankly, stupid things.
When you get these extremes on either party, you start having a strange agenda. And its items don’t look like the things that you and I think ought to happen.
So what is the solution? A lot of people share your thoughts and frustrations on this.
So often, the answer would seem to be to run off after a third party; I don’t think that’s the answer. I think the answer, as hackneyed as this sounds, is the people have to get more involved. And I’ll tell you, that means they have to get involved financially. The sad—or not—truth about politics is it costs a lot of money. Lots of things cost a lot of money. If I want to sell toothpaste, most of my money is probably going to be spent on the advertising and packaging. Selling candidates isn’t a heck of a lot different than selling toothpaste, and sometimes it’s not as enjoyable.
So I think the people who share the frustration, rather than use that as an excuse to withdraw—I think they should use it as a kick in the rear to give more, to find better candidates, and to try to counteract and out-yell, if you will, some of the really extreme groups.
Given your service on corporate boards in the last 20 years, what have you seen change for the better and for the worse in corporate governance?
Most of the changes have been, in general, for the better. They’ve followed [regulatory]-imposed changes such as Sarbanes-Oxley. You’re now in a place where, in general, in publicly traded companies, where the outside audit firm is in tension sometimes with management, and the audit committee kind of determines in which direction that tension gets resolved. And I think that’s right.
What are your thoughts on Dodd-Frank?
I regard Dodd-Frank as almost entirely an unmitigated disaster in financial services. It’s unworkable. It’s unreadable. It apparently cannot be interpreted by regulators. Dodd-Frank has made boards’ jobs impossible or damn difficult in financial services, and led to a great loss of shareholder value and to a diminished economy for the rest of us. I think it’s an example of horrible legislation. The miscreants and people responsible for the 2008 meltdown escaped all notice, all liability, and all reform.
Is executive compensation overplayed as an issue?
The so-called revolution in corporate pay has been a little more headline than reality. Much of the discussion and movement to align corporate compensation with shareholder interest was just a fancy way of saying that you ought to pay more when the stock goes up and pay less when the stock goes down, or have some measurement that kind of represents that relationship, on the view that stock price movement determines value to the shareholder. I don’t necessarily agree with that.
Why don’t you agree with it?
I don’t think you measure the value of a corporation in short-term stock variation. For one thing, at the very least, you ought to have a three- or five-year perspective with clawbacks. I don’t want top-level decision-making in corporations that can fatten what they get this year by taking decisions that, two or three years down the road, aren’t so good. [Executives] will focus on what you pay them to focus on. If they’re focusing on next quarter or two quarters from now, they won’t be focusing three or four years down the road. So I think longer term rather than short term.
I think, too, that one of the things that you might want to look at in a corporation is how well its customers value its products. I’m willing to bet that the company that ranks highly on a customer-delight scale is going to have a better future.
Succession planning is important, also. There are a lot of famous examples where it appears to an outsider that heavy-duty succession planning is not valued and not [incentivized] to the extent it should be. If you really believe that some of the corporate leaders deserve the outsize payments they get, then you must believe that it’s because they’re great leaders. And then you darn well want to make sure that you have somebody to replace them if they get hit by a truck, or they go to another company, or run off with their secretary.