Mitt Romney as US CEO?

Thesis: Mitt Romney as US president will be able to do for the US what he did for Bain Capital when he ran that company.

Anti-thesis: Romney will not be able to do this simply because the United States is not a corporation, is not run like one, nor is the US presidency comparable to a private CEO.

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Today’s game plan

I’m going to present a brief quote, restate it with my comments, and offer some guidelines on how to evaluate the Mitt Romney in the proposed POTUS-as-CEO role.

First, the quote:

QUOTE:

Private equity firms are not lovable, but they forced a renaissance that revived American capitalism. The large questions today are: Will the U.S. continue this process of rigorous creative destruction? And more immediately, will the nation take the transformation of the private sector and extend it to the public sector?

For while American companies operate in radically different ways than they did 40 years ago, the sheltered, government-dominated sectors of the economy – especially education, health care and the welfare state – operate in astonishingly similar ways. The implicit argument of the Republican campaign is that Mitt Romney has the experience to extend this transformation into government.

:UNQUOTE: source: David Brooks, The New York Times, as quoted in the Chicago Tribune on May 28, 2012.

Quoting again, with my indented comments:

QUOTE:

Private equity firms are not lovable, but they forced a renaissance that revived American capitalism.

Could this renaissance have come about any other way? Was this renaissance flawed, which in turn flawed that revival? For something as profound as a revival of American capitalism, one has to ask: Why did it need reviving in the first place, and did our lawmakers play any role in something this profound?

The large questions today are: Will the U.S. continue this process of rigorous creative destruction?

How “rigorous” was this – “rigorous” in the sense that duly-appointed government regulators were doing (and were expected to be doing) their jobs? “Creative destruction?” Perhaps whether that is good depends on whose ox is being gored.

And more immediately, will the nation take the transformation of the private sector and extend it to the public sector?

I find it hard to believe, on general principle, that the private sector was transformed without enabling legislation. Or, if you prefer, the termination of previous and unduly cumbersome law. The larger point, and perhaps the fatal one, is who in “the nation” will extend that transformation to the public sector? [More on that in a bit.]

For while American companies operate in radically different ways than they did 40 years ago…

They were deregulated, which didn’t turn out to be the world’s greatest idea after all.

…the sheltered, government-dominated sectors of the economy – especially education, health care and the welfare state – operate in astonishingly similar ways.

By “the welfare state,” I hope David Brooks includes the defense industry, which enjoys a very generous form of welfare indeed. Oh, wait…he couldn’t have meant to include them, since that’s private enterprise we’re talking about. And they’re the good guys here, right?

The implicit argument of the Republican campaign is that Mitt Romney has the experience to extend this transformation into government.

Why “implicit?” Why not unabashedly, unashamedly trumpet this argument? I’ll tell you exactly why: No one man, not even one with the greatest “experience,” could arrange this extension. Only with the cooperation of Congress could Romney work his (alleged) magic – and they’re not going to cooperate. Too much inertia; too many vested interests; too many oxen needing to remain ungored. And this is something that Romney knows as well as David Brooks, who wrote such nonsense.

:UNQUOTE.

Evaluating Mitt Romney in a POTUS-as-CEO role

Voters are notoriously bad at understanding economic issues, so they will be hard put to evaluate Mitt Romney as a businessman. Yes, he made a lot of money – but was there anything extraordinary about Mitt that allowed him to earn that money? I ask that question, while harboring the same suspicions about how Rahm Emanuel “earned” his money. According to the Wikipedia article on Rahm:

QUOTE:

After serving as an advisor to Bill Clinton, in 1998 Emanuel resigned from his position in the Clinton administration and joined the investment banking firm of Wasserstein Perella, where he worked until 2002. Although he did not have an MBA degree or prior banking experience, he became a managing director at the firm’s Chicago office in 1999 and, according to Congressional disclosures, made $16.2 million in his two-and-a-half-years as a banker.

:QUOTE.

So the question – How did Rahm do it? – makes me wonder, “How did Mitt Romney do it?” Did Romney have any help, perhaps in the form of insider information and support provided by his church? LDS is a very well-known money-making enterprise, so this speculation is not at all unreasonable. I duly note that Romney, far from being the hyped, risk-taking investor much beloved by the GOP in fact avoided risk, which I highlight below:

QUOTE:

Romney was restless for a company of his own to run, and in 1983, Bill Bain offered him the chance to head a new venture … [Romney] initially refrained from accepting the offer, and Bain re-arranged the terms in a complicated partnership structure so that there was no financial or professional risk to Romney.

:UNQUOTE [source: the Wikipedia article on Mitt Romney].

The hell, you say? Yes, I’m suspicious and so should be the American voter.

I was tempted to say: “Since we have many world-class colleges of business and management in this country, you’d think at least some of them would be busy cranking out analyses of how successful was Bain Capital, at what cost, and how much of that success was due to Romney’s brilliance.” However, I won’t. I’m sure too much of the story behind Bain Capital’s success and Romney’s role therein is hidden behind the curtain of proprietary secrecy. Besides, would anyone in academia in a position to critique Romney do so, knowing the risk of angering some very powerful people?

Romney’s Management Team

All good corporate leaders want to have their team in place before they even think of initiating policy changes. The problem in Romney’s case is, the Congress can’t ever be part of the kind of team that businesses rely on. Congress could even be considered that “loose cannon” corporate types fear.

Perhaps the GOP is hoping Mitt Romney could restructure the public sector into greater efficiency. But that would take far grander government intervention than Obama has been accused of in his efforts at health care reform. And the question remains if Romney could resist conservatives in his own party who would insist on an immediate and draconian reduction in the size of government – a reduction for its own sake, rather than for any perceivable and systematically forecast gain.

Mitt Romney has been characterized as a rational, analytical man. Such a man could succeed if he had a Congress composed of independents who were totally divorced from any political party affiliation or lobbyist’s influence. But Mitt Romney won’t have such a Congress – nor is he campaigning to obtain one. His thinking is so much “in the box,” that he can’t see how absolutely necessary such a Congress would be.

Steven Searle for US President in 2012

Founder of The Independent Contractors’ Party

“But…I can see that necessity.”

Contact me at bpa_cinc@yahoo.com