With Donald Trump, the nation is about to embark on a bold experiment in government management. To guide the economy, he has selected billionaire dealmakers and folks with marketing expertise and shunned seasoned policy experts.
To lead his tax reform, international trade and infrastructure and deregulation efforts he has selected Steven Mnuchin at Treasury, Wilbur Ross at Commerce and Carl Icahn as a special White House adviser. All have amassed fortunes as opportunistic investors but have scant experience inside government or managing delicate interactions with congress.
At the White House, they will be supported by Mr. Trump’s campaign marketing gurus and another Wall Street financier — Steve Bannon, Kellyanne Conway and Gary Cohn — as chief strategist, counselor to the president and director of the National Economic Council.
Many conservatives and Republicans — these days those cannot be assumed one in the same — have harbored the view that Washington is not just corrupt but run by a bunch of bumbling dolts and if business people were put in charge, they could miraculously transform the place for the better.
Now we will test the hypothesis that private sector experience is generally transferrable to government and from one radically different kind of activity to another — for example, Mr. Ross’ experience with steel and textile mills to making international economic policy and rebuilding the nation’s failing infrastructure.
This requires a bold leap of faith and unusual disregard for history, because experience elsewhere indicates that private sector management skills don’t necessarily transfer well across industries or into the public sector.
For example, Toshiba was once a wonderful consumer electronics company. However, based in Japan and facing growing competitors in Korea and China, it purchased Pittsburgh-based Westinghouse to revive profitability. It decided it could apply principles of mass production and standardized components and operating systems to build and manage nuclear reactors less expensively for governments and public utilities around the world.
Now it is learning that each power plant presents unique geological and cultural challenges requiring customization in design and human resources management that cannot be accomplished as easily as changing language and time zone settings on a computer. Delays and cost overruns in the United States and elsewhere have spun out of control and could sink the company.
The University of Missouri hired successful computer businessman Tim Wolfe to squeeze out the waste and deliver higher education at a cost taxpayers could afford. Unfortunately, universities are not businesses but rather complex communities akin to modern cities with delicate political arrangements among faculties, students, alumni and other constituent groups and like the rest of the country, suffering from identity politics.
Republicans are promising to spend huge sums on new roads, rails and the like — much of it according to Mr. Ross and White House economist Peter Navarro can be financed by the private sector. However, the record of private investment and management of public infrastructure is hardly encouraging.
Toll roads are generally unpopular with motorists and often don’t generate expected traffic, and private operators have filed for bankruptcy in Indiana and Texas. Private equity takeovers of waterworks in New Jersey, California and other places have resulted in huge rate hikes and of emergency services and fire departments have resulted in dangerously shoddy, underfunded services and bankruptcies.
President Obama and Democrats in congress are behaving as if Mr. Trump’s election was an aberration and that they can ride out four years until returning to power by setting up road blocks to the implementation of his policies.
Republicans like to see the Trump program as another Reagan revolution — lower taxes, deregulation and privatization. However, his notion that the government is in need of a wholly different approach to management may be more remindful of Jimmy Carter, also a successful businessman, who campaigned as an outsider and promised to clean up the mess in Washington. To his dismay he found both Congress and the bureaucracy too difficult to manage and was out in four years.
More than sour grapes, Democrats may be right, and 2020 could be a good time to be the successful Democratic governor of a large state with high ambitions — enter Andrew Cuomo.