Monday, June 04, 2007

Do we want another self-anointed CEO president?

The Times has a good article about Mitt Romney's career at Bain, the prestigious investment bank. The article implicitly questions Romney's claims that his business experience makes him a good candidate for president. Romney's business was the business of equity maximization where he exhibited not the skills of a traditional businessman--budgeting and attentive management--but the skills of an investment banker--salesmanship and presentation. Private sector candidates have a tendency to sell themselves as embodying every quality of a sharp businessman, but there are sharp businessmen in different industries, and the skills of a candidate like Romney should not be sold as the skills of a Bill Gates or Andrew Carnegie. Whether Romney's investment bank skillset are the prime qualities we want in a president is a question worth asking, one that should preclude his being labelled a businessman in the traditional sense, especially when his career has made him accustomed to fighting for the corporate good (profits)--

But Mr. Romney’s Bain career — a source of money and contacts that he has used to finance his Massachusetts campaigns and to leap ahead of his presidential rivals in early fund-raising — also exposes him to criticism that he enriched himself excessively, sometimes by cutting jobs to increase profits.

He made his money mainly through leveraged buyouts — essentially, mortgaging companies to take them over in the hope of reselling them at big profits in just a few years. It is a bare-knuckle form of investing that is in the spotlight because of the exploding profits of buyout giants like Bain, Blackstone and the Carlyle Group. In Washington, Congress is considering ending a legal quirk that lets fund managers escape much of the income tax on their earnings.

--and not for the public good.


Michael Blaine said...

We know that Bush (II) took office billing himself as America's "first MBA president." I think the results speak for themselves. That certain voters tend to believe private sector experience translates well into officeholding in the public sector bespeaks an ignorance of how the two spheres fundamentally differ, as your post suggests. There is a reason that business and government are conducted under different labels; they serve different purposes, and the public expects (or should expect) different results from each.

Elaine said...

Well put, Michael, and thanks for loyally reading my blog!