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David Gergen: How Can Business Stand Tall Again?

by on
in The Wrong Question

Better Question: Why do politicians and academics think they know business?

David Gergen is a very accomplished individual serving four of our presidents very successfully.  He is now a professor and political analyst for CNN. Very accomplished indeed, but a review of his resume does not show a time when he has ever lost sleep over making payroll.  He has never had to consider the impact of government regulation on his business, never brought a product to market or worried about a discrimination suit from a fired employee. david_gergen03

In his May 11th Viewpoint in Fortune magazine he offers advice for American Business leaders. He references other scholars, professors and authors in his article. He concludes with the bold statement that “Our worst business leaders did indeed play a role in creating this mess.”

I’m not sure why he gets a voice on this issue, but absent from his brief history of the past several years is Barney Frank’s roll in forcing banks and lending companies to provide loans to lower income people with suspect credit history. Also skipped was the impact of the unchecked Trial Lawyers Association ability to bring frivolous legal action against Corporate America or the growing regulation on small business owners or the annually growing and confusing tax code.

Mr Gergen has made a significant contribution with his political career, assuming that automatically extends to the business world is a classic mistake business owners have suffered for years.

Does this bother you as much as it does me?

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{ 1 comment… read it below or add one }

Richard May 16, 2009 at 7:08 am

Yes, the critique you raise of media commentators with no business experience is right on target, but it also applies to local politicians who think they know more about business than people who have spent most of their lives actually running them.

My question is why is there such a disconnect? I think in part it is that so few successful businessmen ever get involved in politics or spend much time trying to educate and influence government decisions at the local level. Why is this? Those decisions certainly can have a major positive, or negative, impact on your business and the economy, as we have seen. The problem is, if you are running a business, you had better be focussed on making that next sale, keeping your operations and running smoothly and your personnel motivated and productive, staying ahead of the competition, not to mention the time and focus that goes into new product development and innovation, etc. Who has the time to even think about politics or government? And when it comes to running for office, the best way I know to inject some real business know-how to local government, who can afford the drastic pay cut? Public officials’ salaries are way too low to attract top talent, something any HR executive would understand immediately and correct to fit the market. The only successful business owners I can think of who would even think of doing this are those who have already reached a certain level of success, perhaps as he or she approaches retirement or sells their business and money is no longer a concern. That is the only time they can afford to even think about running for office.

The result, while almost 90% of our local workforce is employed by private sector businesses, fewer than 10% of our state and local politicians have any business background at all. Why do we expect them to make sound decisions that impact our economy when most of them have no understanding of it at all?

Most of the elected officials I know would not know one side of a balance sheet from the other, despite having responsibility over millions (or billions) of taxpayer funds. So unless business owners want to continue seeing profoundly counter-productive, anti-business, and ineffective government decisions, they had better figure out a way to more effectively communicate and share their perspectives with their local elected leaders. And it wouldn’t hurt if more market-savvy business leaders (who could afford to) would step up and run for office, so our political leadership could get more in touch with the real world of work in which the vast majority of their constiuents live. I worry that the disconnect right now is getting worse, and we all lose from the poor decisions that result.

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