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Tue Nov 13, 2012, 10:21 AM


Michael Lewis did an interview on Bloomberg a while back

that I posted here.

He was asked if a CEO's experience was a good qualification for president and he responded that he didn't think so.

A Chairman of the Board and Owner of a company is the God of that company. Everything he says and does that is lawful goes. He has 100% complete control to hire, fire or delegate employees to do whatever he wants that company to do. He can go into other markets/businesses or get out of other markets/businesses. He can set prices and wages, etc. The CEO is the primary and final decision maker.

Although regarded as "the most powerful man in the world", the president doesn't have that same power as a CEO. He has that authority over those employed directly by the administration with some strings attached. for example, he has to get congressional approval to hire key "management" - the cabinet. And if he fires someone, that also can come under scrutiny by congress - as can nearly any decision he makes by the media and congress - unlike most CEOs.

The president can influence who becomes a judge with nominations. But the final decision and approval is with congress. And once he's made that pick, he can't make the decisions that that judge will ultimately make - he can't fire that judge. So he doesn't have much control over the judicial branch as we saw with Citizens United.

And we've certainly seen that the President doesn't have much control over congress over the last four years - even when his party has a majority in both houses. He's an influencer of that decision process only if his party has some control within one of those houses but not the final decision maker like a CEO - with the exception of a veto to stop a bad decision.

I think a guy like Romney who has been a CEO would find the presidency quite an adjustment and frustrating because he can't control as much of what goes on as many people think.

The president has a bunch of control over foreign policy but even there, diplomacy is required. Now a CEO usually possesses a component of that: salesmanship. But even there, as the president, salesmanship has it's limitations and isn't the same thing - pitching to potential customers vs trying to get along with foreign adversaries that may be trying to kill you literally.

Even the economics is considerably different. A CEO is usually focused on making a bottom line profit. The US government is not trying to make a profit on Medicare, Social Security, Military spending, etc - they're non profit entities while that's the lion's share of the country's expenses. And the economics is not purely market driven within a slice of the economy like a CEO faces - it's macro economics with currency, inflation, interest rates, tax incentives, median incomes, etc - a different economic problem than what the CEO encounters.

Having experience as a CEO is a nice to have experience but far from a requirement for president because the jobs are truly so different.

People often overlook that Barack Obama has run a couple of billion dollar entities pretty darn well: his campaigns in the 2008 primary and general election & the 2012 general election cleaned his rivals clock in generating direct revenues and how smartly those campaigns managed their money/expenses. He hired great management and staff. The effort was focused, lawful and disciplined. The marketing was slicker with "Change we can believe in", etc and the more effective advertising. The technology was better from internet financing, messaging and supporting the ground game. And all those campaigns were run much better than his rivals on a business level (Clinton, McCain & Romney).

As others have noted, Lincoln, Roosevelt & Reagan and the vast majority of US presidents had no CEO experience.

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