Of CEOs, Private Equity Titans and presidents
Jim Manzi has had an excellent discussion on the relation between Mitt Romney’s professional background and what he might be like as a president. Megan McArdle has also been discussing this at length.
I’ve made no secret that I think Mitt Romney should not get the GOP nomination, as now looks inevitable, and should not be the next President, as looks likely if the economy does not improve over the next year (but, on this score, I’ll probably be lucky).
I believe that the fundamental and egregious dishonesty that has characterized every step of his political career to date ought to disqualify him from city dogcatcher, let alone wielding the launch codes.
All that said, I think the background of a Harvard JD/MBA, private equity investor and occasional turnaround CEO is great for running the executive branch.
The job of a President is basically two-fold: getting his agenda through the legislative branch, and running the executive branch. The former mostly requires political skill.
As to the latter, which is incredibly important in our era of the Imperial Presidency, a widely spread idea is that in the private sector you learn “management skills” and how to “get things done”. That’s the President-as-Jack-Welch meme. I think that’s largely an illusion for three reasons:
- The public sector works very differently from the private sector;
- The Federal government of the United States is immensely more complex than any private sector business;
- Most “management skills”, at least as taught in business schools, are largely a crock.
CEOs actually have much more leeway in terms of management than do presidents. Amazon CEO Jeff Bezos famously spends a few weeks each year working in Amazon warehouses to get a better understanding of that side of the business and improve it. President Romney isn’t going to intern in the Patent Office for two weeks to see how applications could be streamlined. A CEO can decide to spin off, merge, or shut down departments. If President Romney (or Perry) wants to shut down the Commerce Department, he’s going to need an Act of Congress.
99% of the work the President does as manager of the executive work is the following: – Setting priorities – Hiring and firing
The other 1% are the Big Decisions, that are the least frequent but also the most important. It’s the part that can’t be taught and where the background is irrelevant.
In other words, the President behaves much more like an “executive chairman” of a company who has a hand over major strategic decisions than a CEO who runs it day to day.
This is also very similar to what a private equity investor does in a buyout: analyze the business, decide on a strategy and hire, retain (and fire) managers. He should have a “nuts and bolts” understanding of the business, but he’s not going to go into the factory to make widgets or tell the factory manager how to make widgets.
In other words, to reprise Ronald Reagan’s excellent phrase, to be a good manager of the executive branch, a President should know who to trust, and how to verify. These are also the skills a (good) private equity investor has in spades. Mitt Romney has decades of experience analyzing stuff and then hiring, holding to account and firing people.
Of course, when someone who is also a fundamentally dishonest liar with obvious contempt for his fellow citizens has these excellent skills, it’s an additional argument AGAINST nominating them to the position where they would have the power to detain fellow citizens indefinitely, appoint judges to the federal bench, and start wars.
But the question of whether Mitt Romney would make a good president is distinct from the question of whether a co-founder of a successful private equity firm, as such, would be suited to managing the executive branch.
That should mean Obama doesn’t get your vote, either.
Your writing confused me here. What’s likely? That he’s NOT the next President? Or that if the economy doesn’t improve he WILL be the next President. So you’re lucky if the economy improves and Barack continues his reign. Is that what you mean?
— jd · Jan 12, 07:46 PM · #
Interesting. Does M. Gobry think Romney is more dishonest than Obama? I have spent a fair amount of time among lefty academics and activists, and I can safely say, that anyone from that crowd who honestly reported his beliefs about America or a half dozen leading political issues could not be elected sanitation commissioner.
Given a choice between pathological liars, I’m going for the one that doesn’t hate rich white people, but YMMV.
— y81 · Jan 13, 04:00 AM · #
P.S. I should add, that if there is a political statistic more dishonest than the Obama administration’s “jobs created or saved,” I don’t know what it is. Even the most devout Keynesian doesn’t claim that fiscal stimulus works the way that Obama pretends it does. It’s just lies, lies, lies.
— y81 · Jan 13, 04:10 AM · #
The job of a President is basically two-fold: getting his agenda through the legislative branch, and running the executive branch. The former mostly requires political skill.
— video converter for mac · Jan 13, 09:56 AM · #
Brilliant post. But I must disagree. A President must have at least three managerial skills. The first two are Gobry’s: personnel and priorities. The third is the hardest: avoiding the courtiers’ cocoon, and getting real information from down below. (George Bush II was very poor at this.) There are a number of tricks for doing so: embedding personal loyalists in the middle, rather than the top of the organization; creating high turnover near the top with lots of outside replacements; reading lots of newspapers and blogs; coordinating structures superposed on operating structures; lunch with random Krugmans and Manzis, etc. But it is hard to do and requires sustained attention. Anybody too close to a President for too long is going to cocoon him eventually.
— Ebenezer Scrooge · Jan 13, 06:26 PM · #
Do Americans really believe that a successful of CEO of a private equity firms can turn around a complex economy like Americas? Do the poor mid-westerners and the Bible belt folk truly believe that Mitt will their deliverance from their economic misery? As long as corporate chieftains continue to believe in America as a marketplace rather than a nation of human souls Americans are doomed.
— suzuka · Jan 15, 09:55 AM · #
I’d like to thank jd and y81, who are probably the same person, for providing this week’s Dispatches From The Conservative Alternate Universe.
— Chet · Jan 15, 04:32 PM · #
The key skill that any President needs is the okey-doke. That ability to lie with suave style, while semi-casually flipping the bird to your audience to show ‘em what really going down, yo!
Another key skill is to have absolute zero idea of how wealth is created or how a budget is managed. This is critical if you are going to do the President’s job of crushing economic growth and spending wildly out of control.
Yet another all important skill is hauteur. This typically involves raising the chin just that little bit too much, and railing against malefactors of great wealth while you wife runs around in $2,000 sun dresses slugging down Kobe beef and lobster.
Finally, and most importantly, the President needs to know how to funnel vast sums of money to cronies and constituents, particularly those like public employee unions which will turn right around and give a bunch of it back in the form of campaign contributions.
These are the key traits of a successful President.
— peterike · Jan 18, 02:37 AM · #
The ability to communicate goals clearly is crucial in an executive. GW Bush was frustrating in this regard but Obama is infuriatingly disingenuous. He seems to think he can wink and nod to one constituency without another constituency noticing. He is mooning one while bowing to the other constantly.
For this reason as well as the reasons Mr. Gobry has cited I believe Newt Gingrich, with all his flaws, is a great man and a great communicator who has the best qualities to perhaps lead this nation from the brink of disaster our federal leadership has steered us toward for the past decade at least and which Barack Obama has escalated exponentially.
— Marshabar · Jan 19, 09:43 PM · #