Why do CEO's even matter Politico?

In light of the current economic crisis, who are some of the least popular people in the country? Arguably, CEO's rank right behind members of Congress. That doesn't stop Eamon Javers from writing, "The Obama Cabinet is a CEO black hole." Rather, this article is a black hole.

The article's fifth paragraph argues against the very existence of article itself:

Whether it is a significant absence, however, is far more debatable. As it happens, only a small number of the business leaders in recent administrations were stand-outs. And several were ostentatious flops. It would be hard to argue that there is a close correlation between success in business and success in Washington.

Actually, having worked for three of the largest corporations in the world in my lifetime, I can tell you that the absence of CEO's is not all that big of a loss. The people who inhabit that spot, in far too many companies, are as often as not, "Not worth a bucket of warm piss." as the great Texan John Nance Garner once said opining on a different subject.

That's not to say that there aren't some that are bright but most of them spend their corporate lives trying to please Wall St. Yes, Wall St, not their investors. You see, Wall St. believes only in companies that perpetually grow in the double digits both revenue and profit wise. That it is impossible to forever sustain this in practice is irrelevant, that's what they want. And that is what most CEO's try to do.

They don't make the tough long term decisions. They make the short term, "how do I meet Wall St.'s expectations" decisions regardless of the long term consequences. That is how Chrysler and GM are where they are today. (Well, let's say GM since Chrysler got hosed by the wonderful folks in Stuttgart, so it's not entirely their fault.) They've known for years what they needed to be doing to shore things up. They just haven't had the balls to do it in the face of Wall St.'s expectations. Example: Wall St. didn't like the 1.3 billion it cost to shut down the Oldsmobile dealers a few years ago. Ergo, we wind up with a GM that is hanging on to several makes that it hasn't wanted for years because it's afraid to shut them down. That's not responsibility to shareholders we can believe in.

Still, some long-time White House observers find it noteworthy that when Obama convenes his best minds, there will be few people who have answered to shareholders as well as voters..

I have not used the term "shareholders" for a reason. Most of these people pay lip service to shareholders, nothing more. "Wall St." and "shareholders" are two very different animals. Have been for a very long time. Given a choice between a short term fix that will make Wall St. happy and meet "expectations" or a longer term fix that will ensure the company will be healthy for the next five years but might make you miss "expectations" near term, well, I think you know which one the vast majority of these CEO's will pick. That is endemic of all publicly traded companies and could take another entire post. So it is really rather irrelevant to mention "answering to shareholders." Unless you actually buy the idea that short term profits are always the best interest of the company and shareholders.

Not for nothing, but few of these people have ever answered to "voters" either. Nor would they be be answerable to voters in the cabinet. They would be answerable to President Barack Obama and, maybe, if we get away from the Bushian secrecy, Congress. Finally, these are CEO's. Part of the reason they are where they are is because they didn't like being answerable to other people. They aren't always the best "team" players.

The point is, this article is rather pointless and recognizes itself as such. I think Javers was trying to go for objective and present two sides to the article. It comes across as more of "Why is the article even being written?" Perhaps I'd be less harsh if the title were less provocative. More like: "Does it matter that Obama has no CEO in the cabinet?" That might have worked.

Whatever. Competent CEO's are far rarer than most people imagine. I always said that I never rose to upper management because I had too many scruples. I don't know very many people who have much in the way of scruples that have risen that high either. I sounds good on paper but CEO's aren't all they're made out to be.

As the article itself says, Eisenhower, frustrated with his Secretary of Defense once said, “Damn it, how in the hell did a man as shallow as Charlie Wilson ever get to be head of General Motors?”

'Nuff said.

Comments welcome,

Pat McGovern

It's got electoral votes. It's what politicians crave.