Does Business Acumen Help Presidents Succeed?

business person with newspaper




Presidential hopeful Mitt Romney said in 2012 that a candidate for president should spend at least three years working in business before becoming president of the United States, quoting a small business owner who thought that this requirement should be enshrined in the U.S. Constitution.


Interesting proposal. (Ironically, it would have disqualified his own running mate, Paul Ryan.) The idea, an old one, is that great capitalists would replicate their business success for the entire nation. That “no senator ever had to make a payroll” is a common jab at politicians by business people. Business people, not government, create jobs, it’s argued.

What does the record say?

2015 poll of historians ranks Abraham Lincoln at the top, along with George Washington, Thomas Jefferson and Franklin Roosevelt.


The worst? James Buchanan, Warren Harding, Andrew Johnson,  and Franklin Pierce. These are generally consensus picks, regardless of political persuasion.


Some successful presidents were military commanders, war heroes catapulted into politics. Lincoln was a lawyer before becoming our most revered president.


The surprise is that successful businessmen actually rank near the bottom of our presidential scales. Also surprising, are the great presidents who never came close to running a business. Lincoln failed at business twice and spent years paying off his debts, as did Thomas Jefferson.


Franklin Roosevelt was a born a country squire who deployed money but didn’t make any. And two modern presidents who are consistently ranked in the top 10, Ronald Reagan and John F. Kennedy, lacked business backgrounds.


Success in business, White House headaches


Some highly successful businessmen did make it to the White House:


  • Warren Harding, near the bottom in presidential rankings, borrowed money at age 20, and invested in a newspaper that paid him income for the rest of his life. He made money but couldn’t prevent corruption in his administration. Perhaps owing to late night liquor and poker parties in the White House, he didn’t notice some cabinet members robbing their departments blind. He didn’t finish his term.
  • Herbert Hoover was a one-term president despite being the most successful business man ever to occupy the White House. At one time his mining company employed 175,000 people. He ran the Food Administration during WWI that battled famine in Europe. He was key to opening the St. Lawrence Seaway too.  But when depression hit in 1929, he hesitated to act. He claimed that the economy would come back eventually, without handouts. But people don’t need to eat eventually, they need to eat today. Hoover was denied re-election because he was unable to alleviate mass suffering.
  • Jimmy Carter operated a multi-million dollar peanut farm but several problems of his administration proved insoluble. His business skills didn’t seem to count for much in confronting the radical regime in Iran. Inflation and rising energy prices also defied resolution despite Carter’s business success. Carter’s years are defined by intractable problems.
  • George W. Bush, who holds an MBA, sold his $600,00 investment in the Texas Rangers for $15 million in 1998. That’s quite a windfall. It is still too soon to assess W. Bush’s overall place in the national story but but he did leave office with an unpopular war, financial chaos and sinking employment.


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So which qualities do make a difference?

Ronald Reagan with George HW Bush and Speaker Tip O'Neill

The historical record suggests that inspirational leaders make better presidents than efficiency specialists or money makers. The power of the presidency is the power to persuade. Large and slow moving bureaucracies must be convinced and cajoled, not browbeaten, into doing what the president wants. Enduring presidential achievements come from building consensus and offering vision. The power of the presidency isn’t one of efficiency or the bottom line; it’s about inspiring people to do and be more, and to dedicate themselves to something worthy.


A good president must be able to unify diverse factions of constituents. That takes time and sensitivity. That takes listening and dialogue.


The capacity to uplift others is the best credential for high office. Lincoln was the failed businessman who saved the nation. Jefferson died with a net worth of less than zero but inspired the winds of change all across this earth for centuries with the claim, “All men are created equal.” Franklin Roosevelt guided the nation through its darkest moments.



Can the president grow the economy?

How much a president can actually control the economy is also in question. Economists who’ve explored the connection between economic growth and political party say that other things such as oil shocks have exerted far more influence on growth than have policy choices. Presidents don’t seem to be able to make the pie any bigger; their influence lies in how the pie is divided.


I believe you don’t have to run a business to understand business policies, any more than you must have served in the Marines to assess U.S. withdrawal from Afghanistan.


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