Obama’s Cabinet Lacks Private Sector Experience
Here’s something that will make you feel more confident about how the economy’s being managed at the top. Michael Cembalest, chief investment officer for JPMorgan Private Bank, wrote a commentary that appeared on the Forbes website last week. Cembalest researched the business experience of President Obama’s Cabinet and discovered the following:
In meetings last week, I was asked what the U.S. is likely to do about jobs. While the pace of hiring has slowed, the “probability of finding a job” and the Conference Board’s Help Wanted Index are by a large margin at their lowest levels in 60 years. There’s talk of tax credits for hiring new workers, increased public sector employment bills, hundreds of billions in new stimulus, etc.
In a quest to see what frame of reference the administration might have on this issue, I looked back at the history of the Presidential Cabinet. Starting with the creation of the Secretary of Commerce back in 1900, I compiled the prior private-sector experience of all 432 cabinet members, focusing on those positions one would expect to participate in this discussion: Secretaries of State; Commerce; Treasury; Agriculture; Interior; Labor; Transportation; Energy; and Housing & Urban Development (a).
Many of these individuals started a company or ran one, with first-hand experience in hiring and firing, domestic and international competition, red tape, recessions, wars and technological change. Their industries included agribusiness, chemicals, finance, construction, communications, energy, insurance, mining, publishing, pharmaceuticals, railroads and steel; a cross-section of the American experience. [I even gave partial credit to attorneys focused on private-sector issues, although one could argue this is a completely different kettle of fish]. One thing is clear: The current administration, compared with past Democratic and Republican ones, marks a departure from the traditional reliance on a balance of public- and private-sector experiences.
Source: American Enterprise Institute
In other words, the Obama Cabinet doesn’t have much private sector experience.
Cembalest anticipated that some might say this is a good thing. He wrote:
It’s not a surprise that these days, private-sector engagement strikes some as pointless. The prevailing sentiment is best expressed by one of Secretary Geithner’s own deputies: “Why would we consult the very executives who got us into this mess?” and Congressman Barney Frank: “The private sector got us into this mess. The government has to get us out of it.”
Yet, he pointed out:
However, the public sector is likely to be only a small part of the jobs solution. As shown above, post-WWII public-sector employment ranged from 15% to 19% at the peak of 1970s deficit spending, and back to 17% again. The private sector is the dominant engine of job growth and needs to be the centerpiece of a “solution,” to the extent there is one.
Some time ago I saw one of those de-motivational posters with a picture of Barack Obama on it along with a message that said, “On the job training: Not advisable at this pay grade.”
Someone might argue that case here.
Source:
“Obama’s Business Blind Spot”
Michael Cembalest
Forbes, November 24, 2009
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