About an hour ago, Soledad O’Brien spoke to prospective primary voters in New Hampshire and caught one gentleman repeating one of the dumbest pieces of conventional wisdom, this time in relation to Mitt Romney, that a candidate with business experience is better able to “push the buttons” that make the economy grow.
There are several problems with this, but I’m going to focus on a few general problems with this theory and then look at the problem with applying this to Romney specifically.
1. Government is not a Business: This should be obvious, but when bludgeoned with a dumb trope long enough, the human brain can become conditioned to it and expect it to be true (e.g. The Jersey Shore kids deserve another season). Over the summer, John Boehner explained that he ran a small business and, as a business owner, he understands that you need to cut spending when you aren’t bringing in enough revenue. But government is not a business. The government does not produce a service or product for profit or engage in a competitive marketplace because — by definition — government services are those that the private market is inefficient in providing (the concept of “economies of scale”).
Not to mention the fact that Boehner’s statement ignores that another part of running a business is attempting to “increase revenue” and if you’re unprofitable because your product is underpriced…raise the price. Like taxes.
2. Business Success Does Not Provide Any Unique Insights Into Economic Policy: First of all, most business leaders understand how to run their specific business not ALL business. Certainly any CEO is savvy, but the idea that a software nerd like Bill Gates who spent his career focused on developing products, forging symbiotic partnerships to push those products, and delivering service (in Microsoft’s case, lots and lots of service), could have some unique insight into how a fast food franchise makes money. Sure he would have insight, but no more or less than any remotely savvy observer — his “unique” experience would be in the tech sector at best. And God help you if you think someone with financial industry experience is helpful, please see this:
3. This Idea Should Be Antithetical To Republicans: I cannot stress enough. The crux of the GOP argument is that government should be hands-off when it comes to the economy. Therefore the idea that a GOP candidate is better suited to “pushing the buttons” of the economy can only work if the GOP candidate decides to betray his party completely. In fact, the GOP is mercilessly attacking the Obama administration for its efforts to “push the buttons” of the economy through a stimulus that, more or less indisputably WORKED rather than failed (well, if you use measurements like “numbers” and “data” like the nonpartisanCongressional Budget Office and some private-sector forecasting firms). So a vote for a GOP candidate, even one with business experience, will result in less rather than more button pushing to fix the economy and a lot more fiddling while Rome burns.
Finally, there is a unique reason why Romney is a poor standard-bearer for this theory — he wasn’t really a whiz kid at business. Far from being a wildly successful job-creator, Mitt Romney made his bank by slashing American jobs and moving jobs overseas. In fairness to Mitt, some of these companies needed to slash jobs to remain viable employers going forward, but this is the crux of his problem — his expertise was saving a firm from collapse, but not how businesses actually work, make money and grow. His job was to sell the company once it was off life-support so someone who actually understands business can run it going forward. And if anyone thinks that is what America needs, I’d point out that Barack Obama with no business experience successfully did the same thing with GM.
And moreover, he wasn’t universally successful at it. Despite making huge gains in his deals to takeover some companies (like the oft-cited Staples), Romney actually failed more than succeeded. This Vanity Fair article provides great depth on this subject, but suffice it to say a turnaround outfit is a gambling enterprise and its deals are hit and miss. Romney was more successful than not at the end of the day, but this should remind everyone that merely having millions of dollars does not necessarily make him an oracle who can push the Staples Easy Button and fix everything.