Recent events strongly indicate that our government is broken and the need for reform urgent.  We should never find ourselves having to choose between malfeasance and incompetence, as we now do.   The main problems are clearly size (it's too big) and governance (conflicts of interest are popping up everywhere).

First, size.  David Axelrod put it well when he said in response to the recent scandals, "Part of being president is there's so much beneath you that you can't know because the government is so vast."  And since the president should "know," at least about the important things, the solution is obviously a less "vast" government.  Axelrod sees what we all see -- it's out of control.  From his mouth to Obama's ears.

Mr. Axelrod's accidental de facto endorsement of a different course is pragmatic, because it is now obvious that government just can't do everything, much less do everything well.  The IRS more than botched its review of tax-exempt applicants, arguably a core competency.  How badly would it abuse or fail to police its use of and access to confidential health records or personal health decisions?

But government downsizing is not enough.  The governance failures require deeper reform.  Just as Jamie Dimon may not cite the size of JP Morgan as an excuse for the whale trades, the Obama administration may not cite size as an excuse for the missteps of the IRS or the Justice Department.  Claims of unmanageability and the defense of incompetence are unacceptable in corporate America, as should they be in government America.

If government is to be a force for good, then we need good government.  Unfortunately, the recent trend has been bad.  The incidents of conflicts of interest are growing.  The IRS's abuse of its taxing authority to hunt and hinder political opponents is only the most obvious offense.  There are also congressmen engaging in related party transactions, the administration hiring family members of major media executives, and regulators seeking rents from regulated companies.

Fortunately, there exists a model for reform, that being Sarbanes-Oxley.  With a few tweaks, Sarbanes-Oxley (also known as the Corporate and Auditing Accountability and Responsibility Act) can become the Good Government Act of 2013.  Consider the following:

• Auditor Independence. There is a reason we don't have a ministry of information. The Founders understood well the role of the free press. As Justice Black concurred in The New York Times v. the United States, the "press was protected so that it could bare the secrets of government and inform the people." Through its reporting, the press is the key real-time auditor of our government, and it must remain independent, just as corporate auditors must remain independent.

Sarbanes-Oxley requires corporate auditor independence, which requirement includes a prohibition against the audited's hiring close family members of employees of the auditor.  This prohibition can easily be applied to prevent the U.S. government's hiring of close relatives of employees of major U.S. news organizations.  The law also restricts an auditor's hiring of former employees of the audited.  Finally, existing securities laws require a one-year hiatus between someone being employed at an auditor and being employed by the audited.  The same hiatus should govern major news organizations and the U.S. government.

Enforcement and oversight of press/government independence can mirror the mechanisms of Sarbanes-Oxley.  Specifically, where there has been an independence breach, a major U.S. news organization may not report on the U.S. government for one year following such breach.  Fines would be assessed for further breaches.  Like Sarbanes-Oxley and its Public Company Accounting Oversight Board, a Good Government Act of 2013 could set up a Government Reporting Oversight Board.

• Prohibited Activities. Sarbanes-Oxley prohibits corporate auditors from participating in activities outside their core competency, in hopes of avoiding a conflict of interest whereby the auditor's judgment may be tainted by the receipt of revenues for non-audit matters. Likewise, U.S. government regulators should stick to their congressionally approved mandates and funding mechanisms. This not only reduces the chance of mission creep (see NASA/Islamic outreach, Wildlife & Fisheries/Gibson Guitar, and the SEC/hydraulic fracturing), but minimizes the possibility of conflict and the clouding of regulatory judgment. A Good Government Act of 2013 would, as a minimum, prohibit regulators from fundraising and seeking and receiving contributions from the industries and companies they regulate.

• Related Party Transactions. Sarbanes-Oxley and the NYSE regulate and limit related party transactions. Specifically, company employees and directors may not enter into material-related party transactions and must disclose any such transactions, whether material or immaterial. These rules stipulate that a conflict of interest arises when an individual's personal interests, or those of a family member, improperly interfere with the interests of the company. Likewise, this prohibition can and should be applied to government employees, for whom a conflict would arise when an individual's personal interests, or those of a family member, improperly interfere with the ability to govern impartially. Such a provision would prohibit the use of a federal office or influence to secure employment for a family member or trusted confidant, particularly in an industry regulated by the government employee.

• Responsibility. Sarbanes-Oxley mandates that senior executives take individual responsibility for results. In the corporate context, this means certification of the accuracy and completeness of financial reports and penalties for noncompliance and fraudulent misrepresentations, manipulations, and interference with investigations. It also protects whistleblowers. A Good Government Act of 2013 could apply many of these elements directly to senior government employees, and, whereas a representation about the accuracy of financial statements may not be applicable, other equally important certifications could be required. As an example, the Good Government Act of 2013 could require an annual attestation by the attorney general and the president as to knowledge, legality, and constitutionality of all material departmental actions, and the effectiveness of the controls thereof (with liability for a breach of that representation). Such an annual certification would surely reduce the frequent pleas of ignorance that Mr. Holder makes in committee hearings and the lack of knowledge to which Mr. Axelrod refers. Similar attestations could also be required of legislative authors.

The discrepancy between governmental bad behavior and the standards to which the rest of us are held has reached an all-time high, as is evident in both the executive and legislative branches.  This causes a loss of faith and confidence in our government, which confidence is at an all-time low.  As such, reform should poll well.

To my knowledge, no U.S. president has used the size of his own government as an excuse for failure, and it is unclear whether the problem to which Mr. Axelrod alludes is one of an incapable president, an uncontrollable government, or both.  No matter.  By reducing and reforming government, we can address both issues.  Raising the stakes, through responsibility and liability mechanisms of the Sarbanes-Oxley sort, will compel a more thoughtful and prudent bureaucracy and Congress.

If nothing else, the IRS and other scandals have demolished the philosophical underpinnings of the Obama project, that being that a bigger and more intrusive government can be trusted as a beneficent force.  Now armed with irrefutable evidence to the contrary, we must act with the same skepticism and distrust implicit in the post-Enron corporate reforms.

Washington has demonstrated a voracious appetite for regulating those of us outside the Beltway.  It is now time to apply that skill inside the Beltway, and to bring government up to code with the private sector.  Fortunately, with Sarbanes-Oxley, the hard work has been done.  With a few changes, we can raise the bar for the government folks.