Okay. I give in. I’ll write about the President, and I’ll try to bring it back around to personal finance because that’s the purpose of this blog. So much weird stuff has happened since Inauguration Day that it takes a special effort to not mention the President. So, let’s get this out of the way. Now that there’s a week of evidence accumulated I think I understand where a lot of misunderstandings are coming from. This President is acting like a lot of other Presidents; not political ones, but Presidents of companies. Seen from that perspective, The President of the United States is still acting eccentric, but within the vast realm of corporate officers that run the non-governmental side of the country. He’s not acting like a politician because he’s not a politician. He’s someone who has almost accidentally found himself promoted to a yet another higher position, and probably thinks he’s not done yet. I think our country is now being run by a “bungie boss.”
Refresh your memory of dysfunctional companies. It is easy to find anecdotes of people who are promoted for reasons that have nothing to do with the job or their performance. The right connections, being in the right place at the right time, a dose of strong definitive statements, and someone can rise from the bottom to the top of a company. Gain some momentum, make a strong impression, initiate bold maneuvers, then move up before the flaws are exposed. Get out before the bad news hits and the next person catches the blame. It isn’t a universal model, but it is familiar enough to make it into Dilbert, also the Peter Principle.
Previous Presidents of the United States have accomplished impressive feats. Except for a few, they’ve all risen through political ranks. Several achieved the position because of successful military careers, which makes some sense considering the position is also Commander in Chief. Combat generals also have a tendency to want to avoid war. Regardless, their collected ranks created traditions and conventions that worked towards diplomacy and compromise, at least until recently. They were never completely diplomatic or prone to compromise, but the systems around them buffered undiplomatic and uncompromising positions.
Presidents of companies can be promoted for the opposite reasons. They may make names for themselves for boldness, for challenging convention, for taking dramatic actions, and for being confident in their positions – even to the point of delusion. Because such managers and leaders exist, it is important to evaluate a company’s management team when researching a company.
When I worked at Boeing, it was amazing and sad to see quiet, well-liked, efficient, honest, and very capable people be over-looked for opportunities because they were too diplomatic. They were too likely to share credit, admit faults, truly accept responsibility, and not complain. Too frequently, someone cunning enough would market themselves well, associate themselves with accomplishments, vie for a position, attain it, and repeat. While that may seem like a strategy limited to the levels of management within a company, it isn’t. Rise high enough and the next move may be to a better job in a different company. Do it fast enough and your mistakes don’t have your name on them and can’t catch up to you. Someone stuck with the mess can point at such great risers, but people will dismiss the criticism because there’s a perception that someone who’s risen so far so fast obviously does things right, even when that’s the opposite of what they did.
To me, the President of the United States of America is acting like the President of USA, Incorporated. He thinks we work for him, without realizing that in his new position he works for us. And most Americans are not acting like a bunch of employees. It’s almost as if it is our country.
The tactic of move up and out before finishing the job has political models as well. An ex-governor of Alaska did something similar. Get the job. Make a few bold moves. Leave before the term is up. Get promotions and opportunities based on stories rather than reality.
I worry about our country. People with delusions don’t act rationally. The greater the disconnect between their delusion and reality, the more extreme their reaction. No one on the planet can be act more dramatically and cataclysmically than a leader of a major nuclear power. So, yes, I worry about that, and many other things.
I’ve spent some time thinking about those presidents, managers, and high-powered people I’ve experienced in the corporate world as an employee or as an investor. In none of those cases was I able to change what they did or what they thought. Their identity is built on supreme confidence. If they admit a flaw, admit to being human, the challenge to their internal identity can be painful for them. Impressive defenses clang into place. Denial of their flaws and accusations of flaws in others is a common response.
Revelations happen. That’s a hope I hold for any lofty person who has been lofted too high too fast. It is, however, wonderful to witness when they receive that marvelous gift of a fresh perspective.
The two tactics that come to mind are simple enough. Patience is the easier to employ. It isn’t easy, just easier. When I saw a bungie boss pop up in an organization chart above me, I knew that it was temporary. A year was usually too soon for them to leave. They had to stay around long enough to get something started and get themselves associated with the title. Three years was too long for them to stay. In that time, bad ideas could become very bad, very obvious, and damage their internal and external identity. The other tactic is to feed their self-image to convince them that they are ready to move on. It is sad, but it can be effective.
I wasn’t surprised that citizens of the United States would vote for someone practiced in bombast. Bombast persists because it is effective. Many sales people rely on it, and pay their bills because of it. I was surprised that such a person would be elected to the Presidency. That’s our new reality.
There will be personal finance implications: interest rates, GDP growth, asset bubbles, income and wealth inequality, diminished benefits to the poor while the rich receive their own version of welfare, etc. It will be a long list. I also expect an extraordinary level of dysfunction as a person tries to run a government as if it was a company. As I said, citizens aren’t employees. The president of a country reports to the citizens. Employees report to a president. Proclamations work in one case, not in the other. When employees protest, officials can find an excuse to fire them and hire others. When citizens protest sufficiently well, they can fire the officials.
If my scenario comes to fruition, the current President of the United States could launch initiatives, declare victory in about a year and a half, move into an amazingly profitable string of commercial ventures, and leave the country to our Vice President, the person who would become President Pence. One thing at a time.