A CEO as President
Pete DuPont had a nice piece yesterday on who makes a better President - an executive or a legislator?
One thing I have noticed during this election cycle is the absense of a celebrity CEO being offered up as president. The reason is easy: corporate scandals and the market being down. CEOs are out of fashion. There has been no-one that has captured and/or inspired the country. The CEO as savior has been a pretty regular occurence in the past 25 years. Lee Iacocca, Ross Perot, Jack Welch and Donald Trump, have all been seriously discussed. I hear the ego of Marc Cuban swelling up to join this club also - give it 15 years.
In my book, I write that CEOs are a group that shouldn't be listened to on how to grow the economy. I've always argued to CEOs would make lousy Presidents.
Reason #1 being that they don't know how government functions. Bureaucracy is a different animal than a corporation. The corporation has strong lines connecting the CEO on down to the janitor. If the CEO pulls one of those lines the Janitor jumps. If not, the CEO can come in and knock some heads. Not so with government. The President may have direct control of the White House, but beyond that, he must rely on suasion and the power of his person to control the many fiefdoms in a bureucracy. How often has the State Department worked against and undermined a President? The military? More often than we would want to know.
Reason #2 is the mental attitude of a CEO. By definition, they have to tell their workers what to do to get success from them. You can't tell Americans what to do. They're going to do what they want. In fact, they'll do exactly opposite of what you tell them just to show you. A CEO's first instinct is to control: Iacocca proposed higher taxes, restricted trade, required "public service." While specific policies may sound attractive, in a free country, command and control does fly.
Reason #3: History. Who have been our presidents with business backgrounds? Hoover, Carter, and, now, Bush. No further comment required on the first two. As for Bush, I'll reserve judgement until Hillary is president, but the fact that he's the first MBA President never made me comfortable.
One thing I have noticed during this election cycle is the absense of a celebrity CEO being offered up as president. The reason is easy: corporate scandals and the market being down. CEOs are out of fashion. There has been no-one that has captured and/or inspired the country. The CEO as savior has been a pretty regular occurence in the past 25 years. Lee Iacocca, Ross Perot, Jack Welch and Donald Trump, have all been seriously discussed. I hear the ego of Marc Cuban swelling up to join this club also - give it 15 years.
In my book, I write that CEOs are a group that shouldn't be listened to on how to grow the economy. I've always argued to CEOs would make lousy Presidents.
Reason #1 being that they don't know how government functions. Bureaucracy is a different animal than a corporation. The corporation has strong lines connecting the CEO on down to the janitor. If the CEO pulls one of those lines the Janitor jumps. If not, the CEO can come in and knock some heads. Not so with government. The President may have direct control of the White House, but beyond that, he must rely on suasion and the power of his person to control the many fiefdoms in a bureucracy. How often has the State Department worked against and undermined a President? The military? More often than we would want to know.
Reason #2 is the mental attitude of a CEO. By definition, they have to tell their workers what to do to get success from them. You can't tell Americans what to do. They're going to do what they want. In fact, they'll do exactly opposite of what you tell them just to show you. A CEO's first instinct is to control: Iacocca proposed higher taxes, restricted trade, required "public service." While specific policies may sound attractive, in a free country, command and control does fly.
Reason #3: History. Who have been our presidents with business backgrounds? Hoover, Carter, and, now, Bush. No further comment required on the first two. As for Bush, I'll reserve judgement until Hillary is president, but the fact that he's the first MBA President never made me comfortable.
posted by Howard McEwen, CFA at Friday, August 13, 2004
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