Can politics be fixed?

Chief Executive, The, July, 2004

WITH THE POLITICAL SEASON upon us, the temptation in coming months will be to argue that one political party or one candidate for president has the right answers for CEOs and the business world. Before the madness begins, it might be appropriate to step back and ask, "How should CEOs engage with the political world?"

The fact of the matter is that most CEOs have regarded Washington as a place to argue for special favors or to block unfavorable regulation. The political sector has been degraded and corrupted. It has not attracted the best and the brightest. It has not benefited from the technological and managerial revolutions that have transformed the private sector. The same can be said for education, which is essentially controlled by government. If government and education were seen as corporate enterprises, it would be obvious that they are poorly run.

This reality was acceptable to business leaders for many years. But increasingly, American CEOs are realizing that the whole cost structure of doing business in this market is getting out of control. The educational sector also isn't producing the skill sets that companies need, or at least not enough of them.

So it's easy to complain about the avalanche of lawsuits and exploding health care costs, overregulation and high tax rates. But the root cause is that the political system is out of touch with business and economic realities.

It seems what is missing is genuine leadership. Not just leadership that benefits one particular constituency or constituencies, whether it is the oil industry or the trial lawyers. Right now, Washington is the scene of a feeding frenzy of interest groups fighting for the spoils. Instead, CEOs need political leaders who understand business as the foundation of wealth and understand the principles of free trade and competition.

So as you contemplate the election, it's inevitable that you have to allocate dollars to the two parties. But over the longer term, the goal should be to engage with political leaders on the basis of ideas and principles, not petty favor. CEOs should work to elect people who have real leadership abilities. CEOs should have more personal relationships with political leaders and give them more exposure into how business works. And CEOs should use their own bully pulpits to begin correcting a system that is putting America's economic success story at risk.