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The CEO in the White House
The White House once had a CEO in the Oval Office.
This man was an intellectual heavyweight. He had an ability to innovate in ways that were superior to his peers. He also had a penchant for business. Although he started working for an international corporation, he quickly worked his way up the ranks, proving himself capable of handling one difficult assignment after another. He eventually rose to the partner level.
Then he branched out and founded his own company. He had a mind to cut costs and was successful at it. He became a very wealthy man. Then, tired of simply making lots of money, he headed up a non-business organization in which he was responsible for the complex coordination of an extremely important effort that involved the coordination of international efforts. He formed liaisons with foreign governments and, just like he had been in business, was successful in taking a very complicated operation and making it work.
Afterwards, with his reputation at an all-time high, this CEO decided to try his hand at government administration. Although he was viewed as someone who teetered between the two parties, he took his place within a Republican administration and served at a time at which times were good and people had a positive outlook of the future. He worked hard toward the increase of efficiency in business and industry - all good stuff. He worked to improve relations between business and government - more good stuff - and was viewed by many as a natural for an even higher position.
And then his supporters got their wish. He became the President of the United States. And even though he was well versed in the economy and had been associated with one of the most business-oriented Presidents in U.S. History, his knowledge soon proved not as useful as many thought it would. Within the first year of his Presidency, a set of events transpired that caused the confidence and positive outlook that many Americans had held to evaporate. Consumers began to radically scale back their spending. Earnings fell. Banks collapsed. Many mortgages could not be paid. Unemployment sharply rose. And the conditions worsened for many years to come as the public began to despise him as much as they had eagerly hoped for what his skills might bring to the nation.
The CEO's name was Herbert Hoover. He was the 31st President of the United States.
Although Hoover was brilliant and was actually a very decent man (he saved millions from starvation in the aftermath of World War II and donated his salary to charity), he had several problems that kept him from being a good president. First, he could not seem to personally relate to the plight that many in the nation were experiencing. Secondly, his view on the role of government was such that he didn't think that it needed to directly intervene even when the intense suffering of a huge number of its people reached a catastrophic level.
The man who knew how to run an organization efficiently did not know how to run a country at a time it was in desperate need of empathetic leadership.
Being President means that you are the Chief Executive, the Commander-in-Chief, the Chief Legislator, the Chief Diplomat and the Chief Citizen. No one person with one set of skills will naturally be good in all the things that are required of the Presidency. President Lyndon Johnson once said that "the presidency has made every man who occupied it, no matter how small, bigger than he was; and no matter how big, not big enough for its demands."
America would not be as great a country as it is without our talented leaders of business, who are responsible for coordinating much of the nation's exports, innovation and employment. However, the best predictor of success as President is experience in running a government. And running a government is very different from running a business. As a CEO, you can dismiss people pretty much at will. People are afraid of you because their livelihood depends on you approving of them. But as President, to get anything done at all, you need the cooperation of the majority of 535 people (Congress) whose loyalty to you depends on what you can do for them, with each of them caring more about the approval of their constituents than of you. And you have nine Supreme Court Jurists who can never be fired (not even if you "hired" them) who will do whatever they feel is right - including undoing whatever you are able to get Congress to agree to - regardless of how it affects you.
Being a good businessman is a great life accomplishment. But success in business requires a different set of skills than success in the presidency. To be successful, one must be able to motivate and inspire people that they didn't hire and that they can't fire. Talent and knowledge are not the same as leadership.
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The Values Voter
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Comments
Hoover economics was higher tariffs, higher taxes, deflation
Hoover economics was higher tariffs, higher taxes, deflation. That was the real problem with his term in office.
And you are wrong about Hoover doing 'nothing'. Hoover was MORE interventionist than any previous President, setting up marketing boards for farmers, and initiating other reliefs efforts, and using the Presidency to 'jawbone' actions by others; his failures had NOTHING to do with how he related to the 'common man' or his supposedly conservative policies, as he violated multiple free market principles along the way. As stated here - http://www2.austincc.edu/lpatrick/his2341/tragic.html:
Hoover's real problem is that he allowed a succession of bad economic policies to make a bad situation worse:
1. He signed Smoot-Hawley tariffs, which harmed the international trade system and set off 'beggar thy neighbor' trade policies; the passage of the Hawley-Smoot Tariff raised average rates from 32 to 40% on 70 farm products and over 900 manufactured goods.
2. the Federal reserve tried to keep gold in the US and in the process engaged in destructive deflationary policies that undermined the banking system;
3. higher taxes in 1932 compounded the problem as we destructively set about
"In June 1932, Congress increased the top tax rate to 63 percent at an income of $1 million, up from the previous maximum of 25 percent at $100,000."
"Some assured me that no man could propose increased taxes in the United States to balance the budget in the midst of a depression and survive an election," Hoover remarked in an October 1932 campaign speech. He was genuinely surprised later, when the voters did not appreciate his manly display of "fiscal responsibility."
http://www.reason.com/news/show/29702.html
Hoover raised tariffs and then raised income taxes. Those are all taxes. Tax hikes do not create jobs, they dont help the economy; they harm it. Compound that with an overly tight monetary policy and it is not surprising at all the economy was in trouble and stayed in trouble.
The man with the most Hooveresque policies right now is Obama - higher tax rates on capital gains, higher tax rates on payroll taxes, higher tax rates on income taxes. At a time of economic uncertainty, his policies are guaranteed to make things worse.
If this was an attempt to say CEOs make bad Presidents, its a "fail". FDR, Eisenhower, Clinton, and Reagan all had prior executive experience as Governor or in Eisenhower's case as a commanding general. That prior experience certainly helped them as President in implementing their policies. In the end, it's the policies that dictate success or failure.
Obama has the double whammy of having little executive experience and touting awful policies. His judgement in picking friends (viz Wright, Ayers, Johnson) is poor. We last saw the double whammy of bad policies and inept leadership in Jimmy Carter. Obama is another Jimmy Carter.