News & Views from 465 California Street

Governor eBay

Clint Reilly

Here we go again. Meg Whitman, the latest in a long line of corporate chieftains promising to “run government like a business,” has formally announced her candidacy for California governor.

The conceit of America’s business elite is striking. Even after our entire financial system was nearly scuttled last year through the incompetence and greed of so many “brilliant” executives, they continue to peddle the myth that they are better qualified to run the country than anyone else.

Their attitude stems from the worn out “government/bad, private sector/good” argument. By this logic, we are supposed to believe that a billionaire CEO will run California better than a career civil servant or another qualified candidate.

Ronald Reagan crystallized the argument in his inaugural address, attacking government as America’s biggest problem. But Nobel Prize-winning economist Paul Krugman recently turned that mantra on its head, gently reminding us that during last year’s financial meltdown, business was the problem and government was the solution.

In the halls of power, business lobbyists love to contrast the mythological competence of corporate executives to the abject ignorance of elected politicians. They tout the private sector’s efficiency over the public sector’s profligate wastefulness. But the credibility of these clichés has been sorely eroded by the near-death experience of our free enterprise system.

Has Whitman unwittingly issued a promise that Sacramento will become even more dysfunctional than during the darkest days of the most recent budget meltdown?

Will her brochure claim the Lehman Brothers bankruptcy as a benchmark for the financial acumen she intends to bring to Sacramento?
Will her primetime TV spots call upon voters to remember the imminent collapse of the world’s biggest insurance company – AIG – before the federal government stepped in to rescue it?

Does the billionaire former CEO intend to send mailings reminding voters about corporate America’s multi-million dollar pay packages, which became universal symbols of greed and selfishness?

Or will Whitman’s speeches explain that last year’s trillion-dollar government bailout of big business is simply a model for what the private sector can do to breathe new life into a nearly bankrupt state government?

Come on Meg! Get real.

The widespread corruption and financial malfeasance that brought about last year’s crisis has sullied the collective reputation of corporate America. The “private sector knows best” adage simply no longer holds true.

But there is a more egregious fallacy at work in Whitman’s candidacy, the idea that corporate management and political leadership are the same thing.

Great leaders don’t wear green eye shades; they hire the people who do. And while watching the bottom line is an important skill, negotiating with the multiple factions in the public sector is far different than sending an executive edict to a corporate division head.

Corporations and the military have command structures and a strict hierarchy of authority. Democracy does not. Change depends on a leader’s ability to inspire, cajole and intimidate in an arena where almost no one is dependent on the leader for their livelihood and where a leader has no direct authority over an interest group or even a citizen.

In a democracy, the leader works for the people. In a corporation, the people work for the leader.

These are the attributes of successful political leadership:

First, leaders must have the charisma to marshal public opinion around an agenda. Second, they must be willing to confront the opposition without condemning their motives. Third, they must tirelessly court allies. Fourth, they must have insight into the motivations and constraints of opposition factions and their leaders. Fifth, they must be willing to fashion reasonable compromises in order to bring about incremental reform of a complex system.

Finally, a leader must be an active participant in the democracy. That means voting. Whitman’s failure to vote in elections throughout most of her adult life is bewildering, if not disqualifying.

There are more than 35 million citizens in California. Let’s abandon the preposterous pretense that managing eBay – an auction website – requires the same skills as leading a state larger than most nations in the world.

Comments (21)

  • Amen.,0,4711751.story

    Craig Newmark should make a run for Governor.

    Posted by: Don Nguyen | September 29th, 2009 at 7:46 am

  • I have been meaning to write to you for some time to compliment you on your weekly column, which we read in the Contra Costa County Times. Frankly, I was surprised to find when we moved here from Sacramento in January of 2008 from Sacramento that you are an excellent writer—-concise, interesting and with the history in politics to provide a very readable in-depth analysis of how you see it. All of these are so sadly lacking these days of the wasting away of newspapers.

    Posted by: Bud | September 29th, 2009 at 4:28 pm

  • I commend you for standing up and speaking against the conservatives
    who are calling the Democratic Party as the party of “Big Government.” This
    country needs big government and I found this out early in my business
    career. As a Jaycee in Pittsburgh, Pennsylvania, in the late 50s, I
    installed seat belts in cars because the auto manufacturers wouldn’t do it
    because the price of the product had to be increased. Safety took a back
    seat to the price of the car. Same goes for air bags. As Public Affairs
    Manager for Allstate Insurance Companies in Sacramento and Menlo Park, I
    worked hard to convince the public that air bags saves lives. Did the car
    manufacturers install air bags on its own volition? Nope. Again, it took
    federal legislation to enact passive restraints in cars. This action by the
    federal government has saved tens of thousands of lives.

    Posted by: joe G. | September 29th, 2009 at 4:29 pm

  • Good article.

    You got it right on many points.

    I used to have many business dealings with eBay, and, I often found employees and people within eBay quite fearful of Ms Whitman’s power and
    misuse of it in mean and hateful ways.

    But, the most shocking statistic for the woman was that she did not vote in any election over 28 years; as both a candidate for numerous offices and a long-time poll-worker, and a political party member since the late 60s, I am shocked and saddened by this fact, but, it fits her demonstrated arrogance both in business and her personal life. A sad commentary that she would feel all this is translatable into occupying the Governor’s mansion.

    Another fact that seems to be overlooked; Meg Whitman’s success in business (eBay) was created for her by her then-boyfriend, who created an online auction bidding software system that allowed her to sell her Pez candy dispenser collection. This was her entre into business; someone else launched her into a gifted and gilded world and her arrogance took over!

    California doesn’t need another EGO from EBAY to run it further into the ground! We already doing pretty well right now destroying the once Golden State.we all need to pray for its successful return and comeback!


    Jim B

    Posted by: Jim B. | September 29th, 2009 at 4:31 pm

  • Three cheers for your column Governor eBay. You help us maintain our sanity in the midst of the chaos of California politics.

    I was astounded by Meg Whitman’s claim she would save billions of dollars by making cuts in the state budget but we would have to wait until after she was elected to learn what she would eliminate.

    The candidates for governor must spell out in detail how they propose to pull the state back from the edge. Anything less than that is the height of irresponsibility and arrogance.

    Posted by: F. Fenton | September 29th, 2009 at 4:31 pm

  • You tell ‘em Clint! Thanks for your IJ column

    Posted by: Sal | September 29th, 2009 at 4:32 pm

  • Great article today; one of your best.

    Posted by: T. Alvarado | September 29th, 2009 at 4:32 pm

  • Clint,

    Your observations make sense regarding a (not the) government role in society.

    It’s reasonable to believe that it cannot be run like a business for some of the reasons you mentioned. As an independent, I think Whitman is not the best choice depending, of course, on who the democrat candidate is. We certainly don’t want loony Brown again.

    As a Big Government man, I understand why you cover up the underlying causes of the current recession—well documented in the WSJ—which were the Community Reinvestment Act passed by Congress. This act directed banks to “get everyone in a home” regardless of the traditional loan requirements. Congress then repealed the Glass-Steagal Act which restricted banks to spread lending; banks then went into the securitizing of mortgages. Corruption at Freddie and Fanny led to leveraging these mortgages up to 50 to 1 without doing due diligence. Barney Frank then assured the world that Freddie and Fanny were in sound financial condition. Then the SEC repealed the up-tick rule and short lending went out of control.

    One could conclude from all of this that government causes the problem then offers the solution……ouch!
    Hank R

    Posted by: Hank R. | September 29th, 2009 at 4:34 pm

  • Great article, Thanks Clint!

    Posted by: Chris C. | September 29th, 2009 at 4:34 pm

  • Excellent column in today’s Mercury News. Keep it up!

    Sincerely, Carolyn F

    Posted by: Carolyn F. | September 29th, 2009 at 4:34 pm

  • Dear Clint:

    Apparently you are of the belief that private sector experience and achievement are less important in running for office than experience as a bureaucrat. By that line of reasoning private sector entrepreneurs should be excluded from public office and we should be content to be governed by the likes of Jerry Brown, Gray Davis, Gavin Newsom, etc..

    I worked for the IRS for some 13 years and must conclude that average employee performance I saw fell well short of mediocrity. A fair number of IRS workers had the potential for mediocrity if they only tried or were supervised by competent management. Union work rules and general attitude protected the indolent, the indifferent and the incompetent. I don’t need to be lectured about the nobility of our esteemed public servants.

    Peter Drucker in one of his books stated – “The best we can expect from government is competent mediocrity.” The performance of government in California and indeed across the nation is abysmal. Where or where was congressional oversight of financial institutions the past 50 years? I have to believe Barney Frank, Chris Dodd, et al, were incompetent in overseeing financial institutions all this while and many succumbed to the incoherent mutterings of one Alan Greenspan.

    I believe it is admirable for a successful business person to make huge financial sacrifices and run for office. Leadership is leadership. Remember, government spending and welfare didn’t make America great. Government programs are financed by taking from the private sector. Moving wealth from those who create it to a wasteful government is not the way to strengthen an economy.

    Lay off the Kool Aid.



    Posted by: Richard | September 29th, 2009 at 4:35 pm

  • Love the Meg Whitman piece but thought you missed the most obvious point to the story. The Internet and the retail and or auction proponet has decimated traditional retail without using a level playing field. Way back in it’s infancy, I understand the “no tax” or “no business license” required stance to develop the internet, but EBay is a multi-billion dollar business by it’s own account and has over 85% of it’s transactions done by businesses which are not required to have local business license, pay state, county or district taxes. As a small business owner I am required to track all of my sales and pay the appripriate taxes to each city, county and state and pay accorindly. The mighty EBay has fought this potential tax revenue for cities, counties and state and Meg Whitman has been at the forefront of the argument.

    Posted by: Brian Black | September 29th, 2009 at 8:12 pm

  • I agree completely wiuth your column on Meg Whitman running for governor. It is only her own arrogance that could make her run for a job for whihc she is so poorly suited. With the state having huge obligations and being so far in debt her “no new Taxes” mantra is Republican and ridiculous. that she has not voted maeks it clear what her feelings are about Democracy. Running a company and running California are tow different things. Rather than waste all her moeny, she shoudl just donate it ot eh State to keep park open and help the poor and needy.

    Posted by: Steve Hibshman | September 30th, 2009 at 12:05 am

  • I wholeheartedly agree with your “Governor eBay” column. Meg shouldn’t be running for governor since she hasn’t been voting until recently.

    You said “Great leaders don’t wear green eye shades.” But given the budget that Arnold imposed on California this year (that took more than $1.4 billion from the U.C.s and C.S.U.s; that shifted $1.7 billion formerly paid by the State of California away from K-12 schools-putting these costs on cities and counties that can ill afford them; that took $ 1.2 billion away from state employees-furloughing over 200,000 three days a month who can’t afford this steep a pay cut; that took $361 million away from Health and Human Services (money for the blind, the disabled and the elderly poor); that reduced by $59 million the funding for AIDS prevention, testing, housing, counseling and home-based care; that eliminated $35 million for community clinics-rural, Indian and migrant workers’ health clinics and eliminated $3.9 million for the Black Infant Health Program), I think this state needs more leaders with green eye shades closely monitoring and questioning bogus state budgets.

    You mentioned that change depends on a leader’s ability to inspire, cajole and intimidate. We’ve had enough intimidation. Voters and the fourth estate need to pay better attention to what’s happening in Sacramento. Some will say we need more laws. We have laws that aren’t being enforced. California has a constitutional requirement that the governor’s and legislature’s budget must be balanced. Despite these laws, California has run a structural deficit the last 6 years, which resulted in the train wreck we have this year, where the governor tried to eliminate the entire structural deficit in one (particularly bad) year, without increasing taxes.

    Cutting money spent on public education will hurt the State of California this year and into the future. This is an especially bad time to do this, when so many are out of work. Friends who are teachers have told me that public elementary schools (that are not getting adequate funding right now) have extra students, because parents can’t afford to send their children to private schools. So there are children who don’t have desks, who have to sit on the floor. Even though it’s early in the school year, classes in Marin County have already run out of supplies (paper, etc.). At the U.C.s, professors (already underpaid by national standards) are having their pay cut. At the CSUs, parents who’d already paid their children’s tuition received a second bill (because the governor’s late cuts caused tuition to be increased after the start of the school year), while numerous CSU classes were being cancelled-as costs increased. At Community Colleges, courses are being cut, teachers are being laid off, while there is a huge increase in the number of students attending Community Colleges.

    In conclusion, it seems obvious what results when there aren’t enough people with green eye shades to require that laws and accounting principles be followed instead of the usual annual Sacramento budget shenanigans. Close scrutiny will be especially important during the governor’s lame duck year, when he may engage in penny-dreadful dramas. Watch for this on January 10th, 2010, when he’s supposed to submit a balanced budget, and from June 1st until a budget is passed, when dramatic macho-posturing, aggressive poor-mouthing and mammoth 24-hour legislative sessions may be the rule.

    It would be great if you were to report and comment on this as it happens in 2010, since you have political experience and wisdom and aren’t afraid of
    the governor.


    Dorothy T

    Posted by: Dorothy T. | September 30th, 2009 at 9:41 am

  • I am not necessarily anti big government but if one thing can be proven it is that big government cannot run anything effectively. See Post Office, Social Security, State Budget in CA, etc…..soon health care……Reagan’s policies did not create the financial meltdown, people not paying their mortgages did! People were given chance to own a home buy the likes of Barney Frank and they screwed up. I didn’t see these people complaining while they were buying cars and flat screen TV’s with equity from their homes! Sometimes you need a strong financial mind to make strong financial decisions. BA from Princeton, MBA from Harvard. Don’t mock her as “running an auction website”. She manages thousands of employees, logistics, corporate culture, etc. Clint you are a goddamn f@#!ing idiot sometimes.

    Posted by: T Brown | September 30th, 2009 at 1:14 pm

  • I thoroughly enjoy your Public Service Message in the Marin IJ each
    Tuesday… I particularly enjoyed “Governor eBay”.

    Posted by: Denis | September 30th, 2009 at 4:27 pm

  • You say that one must be an active participant in the democracy by voting, but what about Obama? Wasn’t he in the Senate for a couple of years and only voted “present”. It’s clear he didn’t want a trail of his opinions on anything. Did you ever comment on that? I bet you didn’t.

    Posted by: Lynda | September 30th, 2009 at 4:27 pm

  • Jim B.,

    Meg Whitman didn’t start nor found Ebay. She came on board when they were a “small” company of 30 employees with huge potential. The founder of eBay was/is Pierre M. Omidyar, who is an Obama supporter. My cousin-in-law, who left Boeing for an eBay position data warehousing position, is a Hillary supporter! :) Mrs. Whitman really put him to work, so he left for Netflix…lol.

    But in all due fairness, Mrs. Whitman’s managerial prowess more specifically, her moves to acquire PayPal was pivotal. That, along with the cultivation of the feedback system and awesome systems automation, and a lengthy moratorium on taxation of internet-based transactions, enabled eBay (and other online resellers/retailers) to grow into an multi-national, global behemoth of a “flea market”. One that is open 24/7/365.

    Just wanted to clarify who the founder of eBay was and where Meg Whitman jumped on board of the gravy locomotive. She was hired by Pierre Omidyar to take his business model to new heights and for that she gets a major shoutout. She made some nifty and agile moves.

    But as far as the Gubernatorial is concerned, that’s a big stretch as the author has clearly and logically argued.

    Posted by: Don Nguyen | September 30th, 2009 at 4:46 pm

  • Although I generally agree with the opinions expressed in your columns, I have to say that the “Governor eBay” article was sheer genius. Your references to the facts that business people think that they are inherently better than government employees and that government in and of itself is a problem were right on!!

    Good luck,
    Carole N

    Posted by: Carole N. | October 1st, 2009 at 1:29 pm

  • Love your columns Clint; I always look forward to the next installment. I too have lived my entire life in California and find myself amazed at each politico that comes along vowing to save California. Big promises, sweeping changes. And everything remains the same.

    I am particularly aghast at Ms. Whitman’s claims for all the reasons you cited. Also, I read a piece in my local paper that she intends to save those billions from the budget by “…eliminating redundant and underperforming agencies and commissions…” This is a promise that Arnold also made, and he may have made some headway in that regard. But it begs the question, which agencies? How do you determine which are underperforming? What is the criteria that you use to determine underperforming? Can we cut the DMV? Some of us think that agency is underperforming. The Coastal Commission, the Parks and Recs Commission?

    Thank you Clint, for fighting for us all.

    Posted by: Pamela Greaves | October 2nd, 2009 at 6:31 am

  • Anyone who has worked for the government (local, state, or federal), knows that government agencies are models of inefficiencies… and anyone arguing against that fact is simply delusional. For the most part, government is not the solution, government is often at the root of our country’s problems. Limited, fiscally responsible, government in accordance with Constitution is what made our country great. The further we move away from those principals, the faster we accelerate our country’s demise.

    Career politicians have infected our political system to the absolute disgust of American citizens. We, the people, are longing for modern day patriots to run for public office… Those who don’t think or act like the career politicians that have betrayed the public trust for far too long now.

    In closing, I know very little of Meg Whitman, but I do know that she is not a career politician, and for that fact alone, she is worth taking a closer look at as a perspective representative of the people.

    Posted by: Joe Pellegrini | January 1st, 2010 at 9:18 pm

Add a Comment


Home   |   Blog   |   Legal   |   Contact