Government as business, from the Mike Smiths

Facebook Friend Mike Smith, who like me didn’t vote for Donald Trump, has an interesting perspective on Trump’s Cabinet:

Mr. Trump is approaching his job as “CEO of the United States of America” (CEOUSA) rather than as a typical President-Elect. So, given that, by far his most important duty is to find great people to run each governmental department. Unless you were expecting Mrs. Clinton to appoint conservatives, there is no reason to be surprised or disappointed that Mr. Trump is not appointing liberals to his cabinet. This conservative is very impressed with most all of his picks, so far.

As Scott Adams, and others, have pointed out, Trump is signaling a new CEO is in town. That was the purpose of the whole Carrier escapade along with his public discussion with Ford and the others. These are fine, for now, and they are valuable in signaling his different focus (strengthening our economy and the middle class in particular) from Pres. Obama’s. However, I don’t want many more of these as it is a bad thing when Presidents or the government interfere in the free enterprise system, regardless of their party.

As CEOUSA, I’m not the least surprised he is skipping the daily intelligence briefings. #1, he is not yet President, so he cannot act on them. #2, he wants to get a top-notch team in place to handle these matters going forward and that is where he is devoting his severely limited time.

Are some of these people wealthy? Yes. So? If you voted for Hillary Clinton, you have no standing to complain about wealth. Mrs. Clinton is wealthy via book deals and, most of all, via their ‘foundation.’ She did say something very gracious and wise in her concession speech: “Mr. Trump “deserves and open mind and a chance to lead.” Let’s get him sworn in before anyone freaks out too much.

Yes, President Obama spent eight years weaponizing the government and President Trump could take these weapons (IRS, for example) and turn them on his enemies. I do not believe he will do so. I’m hoping he will respect, and strengthen, the rule of law (something Mr. Obama clearly did not).

My age has some value. Thirty-six years ago at this time, over and over and over I heard, “That actor [Ronald Reagan] will get us into a nuclear war!!” Silly movies like, “The Day After”[a nuclear war] were produced. Reagan not only didn’t get us into a war, the Soviet “evil empire” collapsed without the U.S. firing a shot thanks to Reagan, Thatcher and Pope Paul II (with an assist from Charlie Wilson). Besides, the media tells us every Republican = Hitler.

So, I’m very optimistic. The stock market (people voting with their money) is also very optimistic.

Facebook Friend Michael Smith notices a similar parallel:

“The new law of evolution in corporate America seems to be survival of the unfittest. Well, in my book you either do it right or you get eliminated. In the lastseven deals that I’ve been involved with, there were 2.5 million stockholders who have made a pretax profit of 12 billion dollars. Thank you.

I am not a destroyer of companies. I am a liberator of them!”

— Gordon Gekko, Wall Street (1987)

I finally figured out of what Trump’s cabinet picks remind me. There has been an eerie familiarity about them as the headcount builds and today it hit me and it’s not from the “Art of the Deal”. It’s actually something straight out of the Gordo Gekko 80’s and the stories of companies like TWA, ACF Industries and from MGM to Motorola, Texaco to Nabisco…it is the hostile takeover.

Trump’s rise and opening salvos have a lot in common with the actions of someone he has often spoken of – Carl Icahn. Icahn’s modus operandi is the hostile takeover – a hostile takeover is accomplished by going directly to the company’s shareholders and/or fighting to replace management to get the acquisition approved. In 2013 and 2014, Icahn launched takeover campaigns at 16 different companies and they all began with him taking significant positions in them.

As described by Investopedia, “a hostile takeover can be accomplished through either a tender offer or a proxy fight. The key characteristic of a hostile takeover is that the target company’s management does not want the deal to go through. Sometimes a company’s management will defend against unwanted hostile takeovers by using several controversial strategies, such as the poison pill, the crown-jewel defense, a golden parachute or the Pac-Man defense.”

Trump went right to the shareholders (the voters) with a tender offer (he offered gains through an improved economy) and he vowed to oust the old management, slice and dice headcount, cut costs and to spin off unprofitable and inefficient operations.

I may well have been wrong all along. In the past I have believed that government could not be run as a business because government had different motives and objectives. While businesses are about conservation of limited resources and maximizing returns on those resources, governments are about depleting resources toward social (often immeasurable) goals…but that was before a President stocked his cabinet with people who have significant business and real world experience.

When I have selected teams to help turn businesses around, I have often looked for people with strong values first, impeccable skill sets second and industry experience last. I have found if I get the first two right, significant industry experience is of less importance and often a hindrance because those people often bring a “this is the way we have always done it” attitude with them. One thing is for certain, Trump’s cabinet will certainly be a disruptive force in the way government has been run. For the most part, these are people with real world experiences.

One thing important to remember is that the folks in elected office never subject themselves to the vicissitudes they vest on the general populace. They always exempt themselves from the laws they pass. From Rex Tillerson as the head of Exxon (started with Exxon in 1975 as a production engineer) to Trump’s apparent pick at Interior, Representative Ryan Zinke of Montana, a SEAL Team 6 member who achieved the rank of Lieutenant Commander, these are folks who have had dirt under their fingernails, not the Harvard Law School/Kennedy School of Government grads who have only known white collars and government jobs. These are also people who have had government done to them rather than making a career in government doing it to other people. Even as the governor of an oil producing state, Rick Perry has had to fight the very agency he has been tapped to lead.

I have no idea if they will be successful but I do know that these folks are the very definition of the change agents you need in a takeover/turnaround team. Their focus is creating value for the shareholder. I heard Juan Williams state on The Five today that in his opinion, these picks were only interested in making money, that they weren’t concerned about helping people throughout the strata of American society. The minute I heard this, I knew why the progressive left is freaking out. They don’t have a defense for this kind of disruption and as the management, they have been bypassed as Trump went directly to the shareholders with is tender offer. Juan wants to continue the failed 50 year handout model but that ship has sailed.

I think the new management believes the same as Ronald Reagan believed when he said, “The best social program is a productive job for anyone who’s willing to work.” More government handouts won’t change things, a growing economy and the individual opportunities for success it brings will.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s