Today in the New York Times, David Brooks writes that the qualities that make good CEOs aren't people skills or charm, but doggedness and boring anal-retentiveness. For this reason, he says, "business and politics do not blend well." Brooks warns that when charismatic politicians wrestle the CEO title from the charmless organization-bots, as we're doing now, the the inevitable result is disaster. Does that mean the Obama administration is doomed to fail with the bailouts?
Well it certainly doesn't seem to paint Obama as an ideal CEO. But maybe that doesn't matter. In this month's Atlantic, Harris Collingwood writes that, in many industries, CEOs don't seem to matter very much at all. According to a famous 1972 study that tried to put a number to CEO's effect on the bottom line, CEOs accounted for about 14.5% of profit variance, far below the state of the industry and the legacy of the company. Another study finds that active CEOs (as opposed to "Titular Figureheads" in highly regulated industries) have a "sharply negative" at least as often as a positive influence on their companies.
And as for the current and future government bailouts that spook Brooks, maybe he shouldn't worry so much about the government inserting itself into troubled companies. In fact, the government's record on company bailouts is surprisingly strong. As this Slate piece by Timothy Noah points out, ProPublica traced the last few decades of US government bailouts, and found that many of them have been successful. For example, Bush's 2001 bailout of the airline industry actually made the Treasury between $140 and $330 million. When Carter offered Chysler $1.5 billion in loan guarantees, the government eventually netted more than $600 million when the company paid it back by 1983.
In other words, some politicians' might lack the traits of great CEOs
(although frankly, "dogged" and "boring" sounds a lot like CSPAN), but
that doesn't mean that the relationship between government and
companies is doomed to fail. Check out Brooks' description of a successful CEO and see if it
doesn't also fit your expectation of a politician: "The traits that
correlated most powerfully with success were attention
to detail, persistence, efficiency, analytic thoroughness and the
ability to work long hours." Close enough for
government work, indeed.
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