Last week, the Bush administration floated Carleton Fiorina, the fallen CEO of Hewlett-Packard, as a possible successor to James Wolfensohn as president of the World Bank. If Fiorina eventually finds her way to the World Bank she will be just one more in the long line of executives, many of them failed and semi-failed, to be tapped for high-ranking government posts. The example par excellence is John Snow, the current treasury secretary, who presided over a troubled period as CEO of the railroad company CSX. During his leadership, CSX consistently underperformed competing railroads and its stock repeatedly failed to meet Wall Street analysts’ expectations. Thomas White, President Bush’s first appointee as secretary of the Army, had a checkered tenure at Enron Energy Services, which experienced enormous trading losses under his guidance.

Jess Cox

Since first entering the White House four years ago, Bush has consistently promised to bring the best practices of American business to American government. In his 2000 speech accepting his party’s nomination for the presidency, Bush touted his own business acumen. “I’ve been where the buck stops in business and in government. I’ve been a chief executive who sets an agenda, sets big goals, and rallies people to believe and achieve them.” Bush has certainly lived up to the promise of populating his White House with former business leaders. Even those officials who have spent most of their careers in the public sector have had significant stints in business. In between his years as the youngest secretary of defense in the nation’s history and the oldest secretary of defense in the nation’s history, Donald Rumsfeld had a go as chief of the pharmaceutical producer GD Searle. Vice President Cheney was of course the CEO of Halliburton before joining the Bush ticket in 2000.

Performance pay, flatter and less hierarchical organizations and all the other ideas of the modern manager would revolutionize Washington. Whatever the merits of this strategy, Bush has gone about implementing it in the precisely wrong way. As Daniel Gross of Slate has argued, the business experience of the majority of the Bush White House consists of refugees from Washington who auctioned off their influence-peddling skills and fat Rolodexes to the highest bidder. Entrepreneurial, risk-taking visionaries are a rare breed in this crowd. Instead of injecting Washington with innovative solutions and a fresh outlook on how government can accomplish its goals, Bush has recruited political retreads who have transformed their contacts into plush positions.

In addition to selecting the wrong type of character to fill his MBA presidency, those positions which are in most need of a hard-charging former executive have surprisingly gone to people who do not match the profile of the ideal. The secretary of Homeland Security, whose main job responsibility is completing the largest reorganization of government services since the early days of the Cold War, went to federal judge Michael Chertoff after another nonexecutive, former New York City Policy Commissioner Bernard Kerik, withdrew his nomination. Chertoff’s most significant managerial responsibility prior to his current job was leading the Department of Justice’s criminal division, an outfit that pales in comparison to the complexity of DHS. Bush has nominated John Negroponte to serve as the first director of National Intelligence, a position that is equally challenging as the DHS post. Negroponte’s most pressing task is creating a coherent structure out of the chaos of wiring diagrams that emerged from the intelligence reform legislation passed last fall.

 

The mentor of the disgraced former Enron CEO Kenneth Lay once told his young protégé to turn down an offer from then-President George H.W. Bush to serve as his secretary of commerce. According to the Enron tell-all, “The Smartest Guys in the Room,” Lay was instructed that there was only one Cabinet-level position with sufficient gravitas for a man of his accomplishment: Treasury secretary. Among the greatest sins of the executive who traffics in connections is the cultivation of arrogance. This is a type of arrogance that usually frustrates people who must work with sprawling organizations staffed with career bureaucrats, who the typical political appointee has no real authority over. To the extent that these self-inflated egos can be tolerated, the Bush administration ought to put them where they are actually needed.

 

Peskowitz can be reached at zpeskowi@umich.edu.

Leave a comment

Your email address will not be published. Required fields are marked *