Letter 2 America for July 1, 2014

Dear America,

Robert McDonald, former CEO of Proctor & Gamble, has been nominated by President Obama to be the next Secretary of Veterans Affairs.  McDonald was CEO at Proctor & Gamble from 2009 to 2013 when he ostensibly retired after only five years on the job, but his replacement by A.G. Lafley, the CEO that McDonald replaced, begs the question of why McDonald "retired." at this time.  There isn't much information on that topic...at least not that I could find, but if I were President Obama, I think I would have wanted to know more about the circumstances of McDonald's departure from the executive leadership of a company that fell about ten places on the Forbes 500 list.  Some analysts have been unimpressed by McDonald's performance during a time when other corporations big and small have benefited disproportionately relative to the benefit derived by the average person from the recent purported recovery from the great financial crisis of 2008, which is when McDonald took over at P&G.  That all sounds like business news rather than political commentary, but it reminds me of the ascent of Bill Daley to the position of White House Chief of Staff, where he lasted just about a year before being quietly replaced ostensibly so that he could do other things, which is often a euphemism for anything but what he was doing at the White House.  The rationale for hiring Daley was that, being the son of the former mayor of Chicago, and the brother of the present one...the Richards...and a former high level executive at Goldman Sachs in the bargain, he had connections that would enable him to work congress over and get it to move more in President Obama's direction.  But that strategy yielded nothing in congress, and it would seem that other staff at The White House were none-too-pleased with him either.  So now, in continuation of that trend to turn to business to solve problems, presumably because current consensus among those with power--in other words the American, money-is-power oligarchy--is that only business men know how to manage despite the mess that business has created in our economy.  Then there was The President's advocacy of Larry Summers--Summers advised President Clinton to sign the repeal of the Glass-Steagall Act and thought that there was too much regulation of the financial sector that brought the world to its economic knees--for the position of Chairman of the Federal Reserve, which is the agency that controls the nation's monetary policy...a contributor to both the financial crisis of the past six years and the dubious nature of the solution (the bank "bailout") to the crisis that we are just now coming out of.  Summers is a financial industry veteran, and as a voice that has whichever president's ear nothing better than a shill for big finance, and now comes another big business would-be sage.  But what is the special gift that McDonald, unlike the other businessmen who were selected by presidents to save us all, brings to the task of rectifying the problems at the VA I wonder.

Maybe we'll hear more about that when the confirmation hearings occur, but this trend toward turning to business leadership...mostly CEO's who have managed to enrich themselves to the point of obscenity by sitting behind big desks and making a few decisions a week...is worrisome, especially since it is being continued in the Obama administration, and that is so for two reasons.  First, I don't recall any cases of "top" corporate executives fixing any social problems, with the possible exception of Michael Bloomberg, who might well have been a good choice to run the Veterans Administration for a year or two.  He did a pretty good job with another large institution, New York City, and he knows about business too, but from the critical side rather than from the narcissistic, self-aggrandizing corporate look-at-my-bio perspective.  But McDonald looks for all the world like a guy who failed when he finally rose to the top of a major corporation after working his way up for twenty or thirty years.  He looks like a poster child for the old Peter Principle: people rise to the level of their incompetence, which looks for all the world like what Bob McDonald did.  That principle stood for the proposition that promotion should not be based on performance in one's current position but rather on one's competency to perform the duties of the new, presumably higher position.  And while McDonald may have been terrific at most, or even all of the lower level positions he filled at P&G, it would seem that he didn't do what his board of directors and shareholders expected of him in the CEO position.  So now, what can be expected of him at the even higher level--the position of Secretary of any department in The President's cabinet is arguably higher than that of any CEO other than The President himself--of Secretary of Veterans Affairs.  I'm afraid that it will be the Peter Principle squared, that is, he is now going to be two levels above his last level of competency.

In the final analysis, the window dressing--McDonald is a West Point graduate who stayed in the Army just long enough to reach the rank of captain from his starting rank of lieutenant...a pretty undistinguished rate of progress...before going to P&G to start his inexorable climb to the top based on who knows what--means nothing, though in McDonald's case it certainly seems like a counter-indicator of success at the level he is going to be functioning on rather than a portent of a stellar future, which brings me to the second reason for my dismay over McDonald's nomination.  I thought I voted for a president...twice...who was not in the thrall of the almighty buck worshipers in this country.  I thought he believed in personal qualities rather than wealth as an indicator of human value.  I thought he had some sense.  In my opinion, the only business mogul worthy of consideration for the VA Secretary-ship is Bloomberg, and other than him, I think that other fields are the places to plumb for a new administrator for the VA.  Try academe.  Try healthcare administration.  Try the army again.  Ask Bill Clinton.  But for goodness sake, stay away from business.  There's nothing in it for the rest of us.

Your friend,

Mike