September 19, 2008
POLITICS: A Word About Accountability and Leadership
A lot of conservatives are up in arms about John McCain's call for the firing of Chris Cox as SEC Chairman due to the collapse of numerous Wall Street firms on his watch. There is a more than fair argument against McCain's position: that Cox is a smart, capable conservative and expert in the area who hasn't really done anything wrong, or at least hadn't until the recent move against short sellers (I don't buy that Cox is above criticism, but I don't think this mess is in any way his fault). But there is also a case to be made for the emerging McCain leadership style. As McCain explained today:
Dwight David Eisenhower, when he was commander and he was in charge of the largest military operation in history, the invasion of Normandy. He went to his quarters the night before the invasion and wrote out two letters. One of them sent a letter of congratulation, a messgae of congratulations to the brave Americans who landed in Normandy and made the most successful invasion and partly brought about the beginning of the end of World War II. The other letter he wrote out was his resignation from the United States army, taking full responsibility for the failure of that invasion.
My friends that kind of accountability and responsibility is missing in Washington today and that's why I believe the chairman of the SEC should resign.
That's McCain's view in a nutshell: you produce results, or you step aside, regardless of how well you performed your duties. You own your watch. It's a decidedly military outlook, as befits a man who spent so many years in the Navy. It's perhaps an odd way for McCain to approach leadership - in his book Faith of My Fathers, McCain movingly recounts the bitterness he inherited over how his grandfather was scapegoated unfairly by Admiral Halsey for a mistake Halsey himself made in steering the fleet too close to a storm, mistreatment that McCain ascribes as a possible cause for the elder Admiral McCain's fatal heart attack on his return from the war.
I don't, personally, think that this unforgiving, only-results-matter management style is the best possible way to run an organization in terms of motivating people, and neither is it really a good or fair way to treat subordinates, but it's one well-established leadership style, and it's been successful for plenty of people in business, the military, politics and sports. Certainly it's a sharp contrast to President Bush; while Bush has sacked a lot of people (including Harvey Pitt, his first SEC Chairman who was also just in the wrong place at the wrong time), he's nonetheless frequently found himself in trouble for leaving loyal but incompetent subordinates in place too long after they became obvious political liabilities. McCain is sending a message: the likes of Mike Brown, Alberto Gonzales and Scott McClellan will not be left in their jobs in his White House. Loyalty will give way to accountability.
On a purely political level, in the real world of politics, there's a case to be made about being unsentimental about letting people go when they represent a serious political liability. I wouldn't blame Bush in the least, for example, if he sacked Cox regardless of the merits of his job performance. Political leaders fight for a cause, and that cause is bigger than any one man. A politician who errs on the side of scapegoating people who through no fault of their own preside over disasters is going to do better in the long run than one who fights till the last dog dies for friends he can no longer afford. It's an ugly business but it must be played to win in the real world.
This is a management style that suits McCain, an old man who is likely to serve only one term and already has an impressive collection of enemies. It's a style that's also well-suited to McCain's running mate, Gov. Sarah Palin. One of the recurring themes in Palin's various jobs is that she fires a lot of people - people who don't agree with her policy goals, people who don't follow her orders, people who oppose her in public, people who are too close to corrupt interests or political foes. This is, again, a good way to make enemies who compile vendettas against you - it was her firing of an agency head who was publicly insubordinate that led to the 'Tasergate' investigation headed by a representative of the Obama campaign - but removing the people who are not 100% with you is the one best way to impose your will on an organization, a task that's famously difficult in large public bureaucracies. That was how Rudy Giuliani ran New York, and why he delivered results as an agent of change. A McCain-Palin Administration may not be the friendliest workplace, but the one thing it won't do is let the grass grown under its feet as far as holding subordinates accountable.
"This is a management style that suits McCain, an old man who is likely to serve only one term"
Well, that's a ringing endorsement for someone to take the most stressful job in this sector of the galaxy.
In my next life, I want to return as a republican. That way I too can become a hypocrite, and keep saying government is bad, until I need it to step in.
Daryl, I don't know any Republicans who don't hate the bailouts. And nobody would be justifying them at all if it was just a matter of letting businesses fail, which is necessary for the free market/capitalist system to function. The only justification for government intervention is to prevent daisy-chain events where one sudden failure knocks down most or all of the system. That's a problem that's unique to the nature of financial institutions.
Anyway, there's still a difference between Republicans and Democrats. It's the difference between calling the fire department when your house is burning and having a bunch of firemen living in your kitchen.
I don't know any Republicans who don't hate the bailouts
With the exception of all the Republicans who support them (Bush, McCain . . . )
* * *
These bailouts are the reason I'm neither a Democrat or a Republican. Because both are ready to stick their fat faces in the federal feeding trough and chow down til they're full (and the American people see their net worth decline through taxes, inflation, perverse incentives to financial institutions to continue swimming in risk-filled waters, etc.)
Believe me, right behind the Fed (which is, in theory, a non-partisan institution), I blame the Dems almost as much as the GOPers for the mess we're in as well as the short-sighted solution(s).
But . . . and this is Daryl's point I think, the Dems haven't been winning elections for the last 30 years (or shifting the base of wealth upward to the very richest) by preaching the mantra of "free markets" and "de-regulation" and "get government out of my bank account" or "small government."
No. The Dem have run on the misguided promise of big government, regulation up the ass, and the very visible hand of the federal government turning every lever of the economy.
And shame on them for doing so, and the American people have punished them for those promises.
But the GOPers, while running on the "small government" line, have also jacked up spending, thrown credit at the private financial sector, run up enormous debts which have to be monetized by the Fed.
So shame on them . . . for their hypocrisy, their dishonesty, and their broken promises.
The "difference between Republicans and Democrats" is that the Dems are weak and stupid, while the Republicans are venal and dishonest.
And after 8 years of venal & dishonest, which has led us into the economic and foreign policy mess we're in, I'm willing to give weak and stupid a chance. If nothing else, eliminating the overwhelming economic costs of the war in Iraq should help ease the financial burden on the government and all of us.
If you really think the party of Chris Dodd and Charlie Rangel and damn near every corrupt urban political machine in this country isn't venal and dishonest, I do not know what to say to you.
And if that's your takeaway from what I wrote, then I don't know what to say either.
Obviously, economic problems favor the party that doesn't hold the White House. But oversight of the financial markets really is more of a legislative than executive task, and I think there are just as many Democratic fingerprints on the corpse as Republican ones.
McCain does share the general GOP preference for deregulation, but he's much more willing to deviate from that than most in his party. He's still probably going to take a hit by association, but I think he can make a somewhat credible appeal to people who want some reform but don't want to throw the baby out with the bathwater.
Jerry, the attitude for such things always starts at the top. Besides, McCain himself blamed the President. How? Well, he took aim square at the head of the SEC, and who appointed him? And whenever Congress does try to do its duty, what does the GOP and supporters do? Blame Congress for stunting business. Examples? How about Sarbanes Oxley. Was Sarbox an overreaction to a group of lying cheating CEOs, CFOs and their non independent auditors? Maybe, but what do you expect?
Imagine if Congress 6 years ago tried to rein in the leveraging of the mortgage business. The Republicans would be shrieking how Washington was doing its level best to stunt business growth. One thing I hope Congress will do in this almost TRILLION dollar bailout: Figure out a way to limit bonuses. Like a 110% tax rate on any salary or bonus, including all options and fringe benefits that exceed a certain percentage of the average salary of the company, or something like that. It would be nice if the Fulds of the world actually doesn't get paid for the lousy job they did.
Daryl - I'm mostly thinking out loud about the problem, and I really don't think I know the answers better than anyone else does. I do think there is probably virtue in weighting CEO pay more heavily towards actual stock that needs to be held long-term, rather than stock options that can be liquefied immediately. I think that would make CEOs take a more positive long-term view. But I'm not sure of the wisdom of actually requiring that.
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Daryl, even if you think Cox has done a bad job, it's hard to fault Bush for appointing him (although, as you note, if you follow McCain's view of accountability that is where it takes you). Few people in politics were more obviously qualified for that job than Cox. He's not Mike Brown.
" A McCain-Palin Administration may not be the friendliest workplace, but the one thing it won't do is let the grass grown under its feet as far as holding subordinates accountable."
Sounds like they want yes men. Name one great leader who only surrounded themselves will people that only agreed with them? That is called a failure of leadership not something to admire.
Crank, show a pair and post something on McCain's plans for the health care industry
1. Great leaders get that way by getting their way. Liberal leaders have every right to sack people who don't agree with their goals and obstruct their implementation. Conservatives deserve the same right.
2. GYODB. I'm not a health care wonk and don't pretend to be. If I see something interesting on the topic I may link to it.
Crank, I wasn't blaming Cox. No he isn't Brown, and all I did was basically state what McCain was shooting at. But speaking of Brown, FEMA looks like they can't be found again.....
"On a purely political level, in the real world of politics, there's a case to be made about being unsentimental about letting people go when they represent a serious political liability."
Yep, it's the nature of the game. Joycelyn Elders is a good example on the democratic side.