World, Politics

In bad company: do businessmen really make good US presidents?

By J Brooks Spector 9 May 2016

Do politics and business really mix in America, and can bravado in business lead to success in political leadership and governance? Inspired by a certain presidential candidate, J. BROOKS SPECTOR takes a look.

Here it is, a paradox. The popular mythology of America is that it is the global exemplar of unbridled capitalism. It is a place where business reigns supreme and quiet cartels and oligopolies have first dibs on the country’s wealth, to the detriment of everyone else, and business runs politics and the rest of the roost. For such a quasi-Marxist view of things, it would seem that an iconic admission by General Motors CEO, Charles Wilson, testifying at his confirmation hearing to become Eisenhower’s Secretary of Defense in 1953, simply removed the cloak over the real machinery.

Wilson had reportedly said at his congressional hearing, “What’s good for General Motors, is good for America,” a phrasing that supposedly set out the one-to-one correspondence between business and the nation. Wilson had actually said something much more nuanced, even if that had made the point even more effectively over the confluence between the two spheres, when his actual words were: “For years I thought that what was good for our country was good for General Motors, and vice versa. The difference did not exist. Our company is too big. It goes with the welfare of the country. Our contribution to the nation is considerable.” Thus a kind of corporate version of Louis XIV’s view, “l’état, c’est moi.”

And if further bolstering testimony was needed, there was President Calvin Coolidge, speaking at the height of the booming years of the Roaring Twenties, who told the Society of American Newspaper Editors: “After all, the chief business of the American people is business. They are profoundly concerned with producing, buying, selling, investing and prospering in the world. I am strongly of the opinion that the great majority of people will always find these the moving impulses of our life.” Politics was just oiling the machinery so that chickens could jump into every roasting pot in the land. And even the post-World War II law that established the President’s Council of Economic Advisors was entitled “The Employment Act of 1946” and it was imbued with the vision that modern economic ideas could keep the economy ticking over with ever-growing production and the fullest possible employment.

With this pedigree, it would seem almost inevitable – and logical – that presidents would be drawn from the ranks of the country’s best and most influential business leaders. And, at a bare minimum, business leaders would have richly populated the roster of presidential candidates throughout American history. After all, for example, at this very moment, the country is almost certain to have one of the country’s most visible, best-known (albeit controversial) business figures as its Republican presidential candidate – and just possibly as its president as well.

But, in fact, the track record for business leaders as presidents is virtually an invisible one. There has actually been only one bona fide business figure who has ever become president, and that was Herbert Hoover. By the time he had become secretary of commerce and then a president, he was internationally renowned as a self-made business tycoon and mining engineer, a lauded humanitarian aid executive, and then an advisor to businesses around the world. As president, he had followed Coolidge into the White House after the 1928 election, but, shortly thereafter, he found himself overwhelmed by the enormity of the Great Depression that had begun within his first year in office.

In fact, prior to 2016, the last real business figure who had carried out a major party run for the presidency – aside from independent candidate Ross Perot a while back – was Wendell Willkie, seventy-six years ago. In a contested, open convention that could not choose between stalwart Republican candidates Robert Taft and Thomas Dewey, Willkie became the unexpected emotional choice of delegates to become the Republican’s candidate for president in 1940, running against Franklin Roosevelt in his bid for an unprecedented third term.

Willkie had built his career in the private sector as a lawyer who eventually became the CEO of Commonwealth and Southern, an electric power utility that had fought the establishment of the Tennessee Valley Authority, the vast government electrification program that brought power to many in the South. Internationally, Willkie was initially pro-intervention in Europe as World War II had spread, but in a bid to gain further support from a bitterly divided nation, he switched his pitch to “America First” isolationism. With his campaign a vast shambling circus, comedians compared it to “a whorehouse on Saturday night when the madam is out and all the girls are running around dropping nickels in juke boxes”. Not surprisingly, given Roosevelt’s magnificent gifts as a communicator and politician, and with the nation’s still tentative economic recovery, and the increasingly dangerous world situation, Willkie was ultimately overwhelmed at the polls. There was to be no President Willkie.

The issue, of course, is not whether businesspeople who lead gigantic organisations like major Fortune 500 companies with great success, cunning, and vision are good leadership material. Certainly they are. The real question is whether the skill set of people as varied as Henry Ford, Intel’s Andrew Grove, GE’s Jack Welch, or even Apple’s Steve Jobs or Facebook’s Mark Zuckerberg (or any of the other visionary business leaders the country has generated over the past two-plus centuries) are actually the same skills needed, first, to achieve political success, but then, more importantly, to lead the government of a huge complex nation in the midst of an even more complex world. Whereas Welch – Fortune’s manager of the century – can say the two single-minded keys to success are that a leader must “Over-deliver on the numbers and behaviours, but also [be] gunning for the bigger perspective,” success in political leadership at the top of the pyramid has a very different formula. And this largely spells the difference between the two spheres.

The classic study of presidential behaviour, Richard Neustadt’s Presidential Power and the Modern Presidents, first published back in 1960, articulated a crucial insight that, at its core, presidential power (and authority) is the skill by which a president persuades others to do what he wants to, or hopes to achieve. Rather than the world-bestriding, steely-eyed, omnipotent figure of film, airport novels and television programs, dispatching SEAL teams on a personal whim or threatening adversaries and allies alike with destruction while doodling on a note pad, according to Neustadt, “The presidency is not a place for amateurs. That sort of expertise can hardly be acquired without deep experience in political office. The presidency is a place for men of politics, but by no means is it a place for every politician.” Neustadt went on to point to a trilogy of traits needed by successful presidents – the power to persuade, the use of his professional reputation and the weight of his public prestige – with the first as prima inter pares.

As a result, presidents must seek to influence – via persuasion – those around him in order to achieve an actual political agenda, rather just order the subordinates about. The president can’t simply wave his hand and demand changes in public policy and expect the governmental infrastructure to automatically carry it all out, let alone have the Congress fall into place for him in lockstep – even when his own party controls the national legislature. The 535 members of the House and Senate are simply too independent of a president in most cases for this to happen. Moreover, the constitutional provisions that provide for a separation of powers give the ability to influence legislation to the legislature – as well as a large and varied bureaucracy. Further, contemporary society has further distributed influence to a myriad of interest groups, issue coalitions, and advocacy bodies – as well as quickly formed ad-hoc coalitions defined and moulded via social media.

In The Economist’s 2003 obituary for Professor Neustadt, they wrote: “In what, then, did their [the presidents he studied] authority consist? Three things, said Mr Neustadt: public prestige, professional reputation, and most of all the power to persuade. The three were linked. If the public liked a president, Congress (assuming, as so often, that it was of the other party) would go along for a while, granting him a brief honeymoon. The slightest sign of unease in the country, however, would remove the smiling mask, and Congress would pounce to destroy him. The answer, therefore, was not to act like a campaigner or a commander, but to be conciliatory. A new president had to learn that power in America was wielded most effectively by the separated branches acting together. He had to get Congress on his side, and concentrate on going where his opponents might be willing to follow. That way lay the prospect of impressive shows of power.” But so much of that, however, is very different from the world of business. There the job of the corporate leader is to impose his or her iron will upon a corporation and lead it to profitable success and growing market share.

In fact, military figures also have similar issues with leadership, given the huge gap between the nature of their style of management and that of a successful president. There is the famous story told about departing Democratic President Harry Truman and incoming Republican President Eisenhower wherein Truman told one of his staff aides after Eisenhower’s election in 1952, “He’ll sit there all day saying do this, do that, and nothing will happen. Poor Ike, it won’t be a bit like the army. He’ll find it very frustrating.”

Instead, the president’s work, despite all the pomp and ceremony, the big jet, the fawning aides, Camp David and the White House Rose Garden, a vast presidential press corps, and the instant communication with anyone in the world, is to spend his time using that “power to persuade” in order to command. Or, as Truman also explained to a friend: “I sit here all day trying to persuade people to do the things they ought to have sense enough to do without my persuading them…That’s all the powers of the president amount to.” It might also be noted Truman, early in his life, before entering politics, was a failed businessman with a bankrupt haberdashery on his CV, but he honed his persuasion skills, rising up through the ranks of county, then state politics, for over a decade, even before becoming a senator, vice president, then finally president upon Roosevelt’s death.

Right about now, we hear some readers remonstrating that many of the country’s early presidents such as Thomas Jefferson, James Madison and James Monroe were successful businessmen-farmers, and even Abraham Lincoln was an influential lawyer for the rapidly expanding railroad companies in the Midwest. But the difference was that they found their real greatness in the public sphere – debating the creation of a constitution and a new government, or defining the end of slavery in America as the fundamental public issue of his time, as with Lincoln. And all of them had had to learn their trade in earlier stints in public life, where the arts of political persuasion and coalition building reigned supreme.

Which brings us to Donald Trump. As the current issue of The Economist (a publication usually rather lovingly supportive of business buccaneers in the world) assessed the Republican party’s presumptive nominee: “He would be a disastrous president. If Mr Trump’s diagnosis of what ails America is bad, his prescriptions for fixing it are catastrophic. His signature promise is to wall off Mexico and make it pay for the bricks. Even ignoring the fact that America is seeing a net outflow of Mexicans across its southern border this is nonsense. Mexico has already refused to pay. Mr Trump’s response was to threaten to stop remittances being sent home to Mexico: ‘It’s an easy decision for Mexico. Make a one-time payment of $5-10 billion to ensure that $24 billion continues to flow into their country year after year.’ That would probably be illegal, and only by instituting capital controls could Mr Trump prevent people withdrawing cash from an American bank account in Mexico. His other big promises on the border, to deport 11 million illegal immigrants and their offspring, and to bar all foreign Muslims from America – ‘until our country’s representatives can figure out what is going on’ – are no better.”

In this sense, Donald Trump – what with his overweening belief in his perfect knowledge of how to amass his own wealth; how to crush, utterly, his opponents; and how to gain his goals through a mastery of negotiations as a form of psychological warfare – could achieve the GOP’s nomination in a more narrow partisan universe, but he will be completely at sea in any effort to persuade his opponents to follow him on his political and governing adventures. In today’s thoroughly interconnected world, it will do no good – and probably a great deal of harm – to threaten those across the negotiating table (whether they are friend or foe) that if they don’t play ball with him, he will simply pick up his papers, leave the room and find another deal somewhere else. And he would be the man with the nuclear missile launch codes in his breast pocket, just by the way. DM

Photo: Businessman and Republican presidential candidate Donald Trump gestures as he speaks at a campaign rally at the Century Center in South Bend, Indiana, USA, 02 May 2016. Indiana voters go to the polls for the winner take all Indiana primary election on 03 May. EPA/TANNEN MAURY

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