A crisis reveals a leader’s values and measures his trustworthiness. Effective leaders remember this truth as they work to create followers, not just from their close-in base (e.g., the executives you brought into the company or, in the case of politics, your base) but also the mass middle. The mass middle enhances and moves the leader’s proposed solutions forward without the kind of push back that stops needed change efforts dead in their tracks.
People only follow leaders they trust. It’s why leaders must be honest about a crisis. Manufactured crises take leaders nowhere, fast.
In meeting with his Lincoln car dealership owners, Ford CEO Alan Mulally announced that the Lincoln brand was dying and half of their dealerships must close. The dealers believed and cheered him. Why?
Prior to the summit meeting, Mulally had sold valuable Ford assets and enacted radical R&D reforms to avoid Ford’s bankruptcy. In other words, the CEO’s prior actions were consistent with his message that Lincoln was in trouble. In that consistency, trust was built. Followers were created.
My home – Madison, Wis. – is epicenter to a national debate about the cost of state government as we face a huge deficit. Trustworthy leadership can pull us together and forward (pun intended – our state’s motto is Forward Wisconsin) to workable solutions. Instead, too many moderates like me are losing trust in our Governor in large measure a result of how political campaigns are financed.
Republican Walker’s actions appear entirely too consistent with the desires of campaign contributors. (So were the previous Democratic Governor’s actions.) Consider this set of facts:
- A bi-partisan Public Service Commission spends a year establishing windmill-sighting laws. Walker proposes a reversal at huge cost to wind energy companies with projects underway. Campaign contributor, Wisconsin Realtors Association, had argued against the PSC ruling.
- Walker refused $800M in Federal train money, precluding new jobs the state desperately needs. Walker argued Wisconsin lacked money to subsidize fares, but his move creates negative cash flow consequences during our budgetary crisis, as Wisconsin is now on the hook for existing rail line maintenance. Walker supported the train, before the state’s road builders funded his campaign.
- The Koch Brothers are known for wanting to break unions. They made major direct and indirect gifts to Walker’s campaign. Walker’s budget bill busts the union for all intents and purposes. In a sad display of victory, their company just opened a lobbying office across from our State Capital.
- The budget bill gives Walker the right to sell state energy assets in no-bid fire sales, including giving-away the assets. What “public good” does that clause create? Guess the donors.
- The “budget” bill also includes language to make the Chief Legal Counsel and Chief Communications Officers of every state agency into Walker’s political appointees. This expansion of power gives political donors newly found power.
Some might argue that campaign money did not motivate Walker’s actions; that he acts on core principles. Correlations between actions and donors, in other words, are without causality. The brain does see what it’s preconditioned to observe, after all.
The doubt these donations raise is precisely why corporate, union indeed any group money in politics is so dangerous and campaign finance reform is desperately needed. The money breeds distrust in government and without trust there is no moving forward. The distrust also leads to huge political swings, as I expect Wisconsin will see in the next election, and with it a swing from one set of policies to another. Pendulum swings do nothing to solve our considerable problems, nor do they help business. Business needs stable policies, not a yoyo policy environment. Despite the real problems of its authoritarian nature, China’s government has demonstrated stable, far-sighted focus in advancing its economy and its results are nothing short of awesome.
Our campaign finance business model also comes with a huge opportunity cost.
- Better uses of the money: What else might companies do with the money they spent lining the pockets of politicians? Last year, it totaled over $3B from 13,000 registered lobbyists, both rising steadily since my 20s (I am now in my 50s), growth that some recent authors argue created the huge gap between the top and bottom of our income distribution, with the middle rapidly disappearing.
- Unfair competition: Large spenders often get regulations that work in their favor. ($46M by AT&T, $33M by Goldman Sachs, etc.)
- Wasteful government spending: Does the $44M public employee unions spent reduce government service innovation?
- Weak economic growth: Imagine public investments that make economic sense (e.g., infrastructure investments) versus political sense. Steady spending by the National Association of Realtors ($39M last year) contributed to America’s over-invested in housing. I could add the prison and military industrial complex to this list.
Remember what the United States stands for – one person, one vote. In the words of Madison’s Marc Eisen, “At this moment in the American experiment, the right of really rich people” (I’d add cash-rich unions) “and their interest groups to spend as much money as they want to bend the political process to their will is considered the essence of Free Speech.”
Our nation’s esteemed founding fathers, who forewarned us about the dangers of power, are rolling in their graves.
Kay Plantes is an MIT-trained economist, business strategy consultant, columnist and author. She served as chief economist for former Wisconsin Republican Gov. Lee Dreyfus. Plantes provides expertise in business model innovation, strategic leadership and smart economic policies. She resides in Madison.
