Two Candidates Sell Themselves
After the second GOP debate, a familiar, hairpiece-topped face led the newest CNN poll. Behind blustery billionaire Donald Trump, however, Carly Fiorina (the former CEO of Hewlett Packard) managed to climb into second place. Fourteen months from the election, no poll offers more than a quick glance at the feelings of voters. However, those voters seemed quite open to a pair of outsider, businessperson candidates.
Candidates like Trump and Fiorina are nothing new. Ross Perot made billions in the data processing business before running independent campaigns in 1992 and 1996. Former Godfather’s Pizza CEO Herman Cain briefly attracted considerable support in 2012. Many others – like George W. Bush and Mitt Romney – made money in business before entering electoral politics. But until Trump, never had a candidate described his qualifications so simply as “I’m really rich.
He is, as is Fiorina. Their net worths – about $3 billion and $59 million, respectively – place both of them well above the top .1 percent of Americans. Their actual records in business, however, do not paint quite as exceptional a picture.
Four of Trump’s real estate companies had to file for Chapter 11 bankruptcy protection, one of them – Trump Entertainment Resorts, Inc. – three different times. He had to bail them out with his personal wealth at least once. From 1999 to 2005, when Fiorina was CEO of HP, the company’s stock plummeted 55 percent. The day that she was forced to resign, stock went up almost seven percent. As one analyst said at the time, “the Street had lost all faith in her, and the market’s hope is that anyone will be better.”
The mismanaged or possibly illegally managed businesses of both candidates took a real human toll. Trump was sued by the Justice Department for alleged racial discrimination in renting and was even investigated for possible bribery and racketeering in business dealings with the mafia in New York and Atlantic City. Under Fiorina, HP laid off 30,000 Americans.
To be fair to Fiorina, she had to overcome considerably more obstacles in her career as an outsider in the business world who eventually became the first woman CEO of a Fortune 20 company. Trump, meanwhile, was given a foothold into the real estate business by his multimillionaire father. In fact, had Trump simply invested all of his approximately $100 million in 1978 in an index fund of the S&P 500 and reinvested the dividends over the last 37 years, he would be worth roughly twice as much as he is today.
Of course, their actual records matters less in an election than the way those records are portrayed. According to Fiorina, in “difficult times… [she] doubled the size of the company … quadrupled its topline growth rate … quadrupled its cash flow… [and] tripled its rate of innovation.” Translation: HP briefly doubled its size when Fiorina oversaw a merger with the computer company Compaq, ultimately an unsuccessful one for HP; the growth rate quadrupled if seen through a few cherry picked earnings quarters while declining overall from seven percent to three percent when Fiorina was CEO; and the “rate of innovation” – measured in total patents – tripled, although the growth in number of patents per day did not come close to that. As for Trump’s portrayal of his record: he is a winner.
In a general sense, both he and Fiorina are indeed winners. They both have experience making lots of money as CEOs of large companies. But even if they didn’t have subpar records actually running those companies, how much would their business records actually be worth? Being the leader of the free world is utterly different from being the leader of The Trump Organization. A CEO is accountable to shareholders, who all have the same goal of maximizing profits. The president is accountable (at least in theory) to 319 million people, many of whom have vastly different goals, values and priorities. When a CEO screws up, people may lose their jobs. When a president screws up, people may lose their lives. Maybe most importantly, a CEO’s powers come much closer to mirroring those of a dictator, while an American president must navigate a system deliberately set up to encourage gradualism in policy.
Donald Trump and Carly Fiorina’s support may dissipate well before election day as voters opt for someone with experience in the political system. But at least for a time, they are leading the pack, running on business records that don’t stand up to scrutiny and wouldn’t have much bearing on their success as president anyway.