The CEO Test for Bush
Bush gave a long speech Thursday night, which sounded like a laundry list of promises more than anything else. He pointed to few genuine accomplishments during the past four years, and seemed stuck in fall, 2001.
If you think about George W. Bush as CEO of America, Inc., it becomes clearer why his poll numbers have been so low (low to mid forties) in the run up to the election. No president with those kinds of poll numbers in the spring before the election has ever won.
Bush’s basic characteristic is not steadfastness, as the convention attempted to argue, but rashness. He is a gambler who goes for the big bang. He loses his temper easily, and makes hasty and uninformed decisions about important matters. No corporation would keep on a CEO that took risks the way Bush has, if the gambles so often resulted in huge losses.
Let us imagine you had a corporation with annual gross revenues of about $2 trillion. And let’s say that in 2000, it had profits of $150 billion. So you bring in a new CEO, and within four years, the profit falls to zero and then the company goes into the red to the tune of over $400 billion per year. You’re on the Board of Directors and the CEO’s term is up for renewal. Do you vote to keep him in? That’s what Bush did to the US government. He took it from surpluses to deep in the red. We are all paying interest on the unprecedented $400 billion per year in deficits (a deficit is just a loan), and our grandchildren will be paying the interest in all likelihood.
And what if you had been working for America, Inc. all your life, and were vested in its pension plan (i.e. social security)? And you heard that the company is now hemorrhaging money and that the losses are going to be paid for out of your pension? What if you thought you were going to get $1000 a month to retire on, and it is only going to be $500? Or maybe nothing at all? Because of the new CEO whose management turned a profit-making enterprise into an economic loser? Would you vote to keep him on?
What if the CEO convinced himself that the Mesopotamia Corp. was planning a hostile takeover? What if he had appointed a lot of senior vice-presidents who were either incompetent boobs or had some kind of backroom deal going with crooked brokers, and fed him false information that Mesopotamia Corp. was making a move and had amassed a big war chest for the purpose? And what if, to avoid this imaginary threat, he launched a preemptive hostile takeover of his own, spending at least $200 billion to accomplish it (on top of the more than $400 billion he is already losing every year)? Remember, it was a useless expenditure.
It turns out that Mesopotamia Corp. was a creaky old dinosaur with no cash reserves, and couldn’t have launched a hostile takeover of the neighborhood mom and pop store. And, moreover, its arena of operations is extremely dangerous, and nearly a thousand America, Inc. workers get killed taking it over. And it turns out that the managers that the CEO put into Mesopotamia Corp. were bunglers. They adopted policies that made the taken-over employees bitter and sullen and uncooperative. Instead of standing on its own, the wholly owned subsidiary of Mesopotamia, Inc., requires continued infusion of capital from America, Inc. It looks increasingly as though Mesopotamia, Inc., will have to be let loose, and that its new managers will opt for interest-free Islamic banking as soon as they can.
Meanwhile, the real threat of a hostile takeover comes from al-Qaeda, Inc. Because 138,000 employees had to be assigned to Mesopotamia, Inc., there are few left to meet that challenge.
So given this kind of record, do you vote this CEO back in? It is often said that a lot of Americans want to stick with Bush to “see Iraq through.” But if you think about him as a CEO, and look at how well he has run things, you can see the idiocy of this argument. The real question is, do you throw good money after bad?