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Why big-time CEOs make terrible politicians

California is poised once again to compete for the crown as the nation’s leading graveyard for business superstars trying to make the jump into politics.

With election day yet 48 hours away, it’s still possible that Meg Whitman and Carly Fiorina will prevail in their campaigns for governor and U.S. senator. But the betting and the opinion polls are pointing the other way. So as we face the likely, if not certain, wreckage of these two lavishly financed campaigns, it’s proper to ponder anew the following question: Why do big-time CEOs make such terrible politicians?

Of course, terrible politicians can come from anywhere, and not a few are currently serving in office. But you don’t need much more than the fingers of one hand to count the successful business leaders who have morphed into successful politicians — and the political “success” of some is arguable.

The entrepreneur Michael Bloomberg is now serving his third term as an effective mayor of New York. Former Goldman Sachs Chairman Jon Corzine was elected twice to the U.S. Senate from New Jersey and once as governor, then lost a reelection bid.

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In California, former Northwest Airlines Chairman Al Checchi squandered millions in a failed bid for the Democratic nomination for governor in 1998; four years later, financier Bill Simon lost the general election to Gray Davis. Peter Ueberroth, a successful businessman whose management of the 1984 Los Angeles Olympics won widespread praise, dropped out of the running for governor in the 2003 recall free-for-all. Michael Huffington, an executive in his family’s oil firm, spent hugely to win a congressional seat in 1992 and got edged out by Dianne Feinstein in the millionaires’ campaign for the Senate in 1994. One exception to this record: Richard Riordan, an investment executive, served two terms as a popular mayor of Los Angeles.

On the national level, the last business leader to reach the White House without having served previously in elective office was Herbert Hoover.

Searching for the secret of why business leaders find it so hard to make the transition to politics, I placed the issue before Simon Ramo, a founder of TRW, one of this state’s leading industrialists for more than a half-century and a man who never felt the temptation to run for public office.

“To be a CEO and to be a political leader each demands about 10 important qualities,” he told me. “Maybe five of those are the same — you have to know how to read a budget, and delegate authority, and manage people, for example — but the others have absolutely nothing in common with each other.”

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His point was that many qualities that make a good CEO are necessary, but not sufficient, to make a good politician, in the same sense that a concert violinist and a neurosurgeon need supple fingers — “but that doesn’t mean you’d want a violinist to perform your surgery.”

Eighty years ago, after Hoover’s first year in office, the pundit Walter Lippmann observed that Hoover was a living disproof of the assumption that managerial skills in business were easily transferred to “the hurly-burly of conflicting wills which are the living tissue of popular government.” Hoover showed himself incapable of jousting on that level. Instead, Lippmann wrote, he was “paralyzed by his own inexperience in the very special business of democracy.”

It’s hard to imagine a group of candidates more inexperienced in the “very special business of democracy” than our current crop of would-be CEO/politicos.

Engagement in democracy starts with participation in the ballot box. That’s the real significance of Whitman’s and Fiorina’s well-documented failures to vote over the years. This isn’t a “mistake,” as Whitman likes to call it. A mistake is getting the address of the polling place wrong, once. Not bothering to vote year after year? That’s contempt for the very concept of democracy.

In terms of public service, Whitman and Fiorina don’t come near the stature of Hoover, who served as an administrator of humanitarian relief during and after World War I and in the cabinets of two presidents. Neither has served a similar public apprenticeship.

The usual rationale offered by business leaders to justify their candidacies is that “government needs to be run more like a business.” For the most part, Whitman and Fiorina have avoided wholeheartedly embracing this threadbare trope, though the recent TV commercial in which Whitman says she knows “government isn’t a business, and it shouldn’t be,” is at odds with the 2009 article in Fortune in which she’s quoted as stating, “it’s time to run California like a business.”

It would be obvious to any business person who had spent a day in public administration that government and business are antithetical. That’s not a flaw in the system. Government exists to take on precisely those tasks the private sector can’t or won’t do.

These include caring for the penniless; maintaining common amenities such as parks, schools, and universities; and creating infrastructure with broad value but unspecific beneficiaries, such as freeways and the Internet (which in coming days undoubtedly will be used by many readers to inform me by e-mail that they don’t see how government serves any purpose).

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Most of these functions can’t be made to “pay” in the sense that a business strategy does. But they can be neglected or privatized only at great cost to society.

That’s not to say there aren’t efficiencies to be extracted from existing public services, but that these almost always prove to be marginal. Moreover, the candidates who bleat loudest about uncovering “waste, fraud and abuse” are often the rankest novices at governing. That includes Arnold Schwarzenegger, with his stillborn “blow up the boxes” campaign to reorganize state government, and Whitman, who has pledged to fire 40,000 state employees. Since California currently has the fourth-lowest ratio of state employees to population in the country, that sounds like a formula for less efficiency rather than more.

The principal quality that makes today’s CEOs think they can compete in the political hurly-burly is wealth. Campaigns are more expensive than ever before (especially in California), and CEOs are better paid than they used to be. But recent history suggests that money isn’t always enough. The Center for Responsive Politics found that in 2008, of the top 20 contributors to their own congressional campaigns, 13 failed to win their seat. Of the top 10 such candidates this year, only five are still in the race (including Fiorina).

If political skill could be acquired through the exercise of pure intelligence, which both Whitman and Fiorina possess in good measure, they would be doing better in the polls — and might have a real chance of success in their new jobs should they win. But if their public performances have suggested anything, it’s that even in this electronic age, a good politician needs more than a PR staff and a TV budget.

Michael Hiltzik’s column appears Sundays and Wednesdays. Reach him at mhiltzik@latimes.com, read past columns at latimes.com/hiltzik, check out facebook.com/hiltzik and follow @latimeshiltzik on Twitter.


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