An unmistakable intersection between business and politics exists in the United States. Beyond the conspicuous crossover found in interest groups, lobbyist organizations, and corporate donations—a staple of modern-day political campaigns to both parties—our nation’s leaders also epitomize this intersection. While the route from business to politics is fairly transparent, the path from politics to business often escapes us. However, understanding this two-way link enables us to better grasp the inner workings of a political system governed by the individuals we elect.
The Bridge: Business to Politics
A clear bridge connects the business world to the Oval Office. Jimmy Carter managed his family’s peanut farm operations before navigating his way to the Capitol. Before taking office, George H. W. Bush had made his fortune as an oil tycoon. George W. Bush first earned status as a reputable businessman by investing in the Texas Rangers before he ascended to the Texas governorship and presidency. GOP frontrunners, Donald Trump and Carly Fiorina, having never held public office, seem to be doing the same. In 2012, Mitt Romney even ran on his private sector experience instead of highlighting his experience as governor of Massachusetts.
There are strong components that build this bridge: monetary power that many former business executives possess to finance presidential campaigns as well as the novelty of not being career politicians. Self-financed campaigns frequent the political careers of executives-turned-politicians. Donald Trump has self-funded 94 percent of his campaign. Steve Forbes, a publishing executive and Republican contender in the 1996 and 2000 elections, donated $114 million to his own campaign. Ross Perot, also a businessman, spent $65 million of his own money running as an independent in the election of 1992. Undeniably, candidates with corporate experience court favor with the American electorate, at least within the GOP constituency.
Nevertheless, many Americans are averse to the idea of individuals with business backgrounds ascending to the presidency, forcing this path from business to politics into the public eye. Romney’s comment about the 47 percent sums up the negative stigma candidates with business backgrounds find damaging. Many voters find these individuals to represent the wealthiest one percent of Americans, the very antithesis to the plight of the average citizen. For citizens who wish to reconcile contemporary American democracy with the ideas of the Jeffersonian democracy, former CEOs and banking executives only undermine the conception of government that seeks to oust the “elite” and prevent the rise of aristocratic government.
Nonetheless, the bridge is built, and candidates with resumes that read business-to-politics often break through to the center of the political scene. However, in focusing in on these candidates and their campaigns toward the executive office, we often lose sight of the fact that the bridge works both ways.
On The Other Side: From Politics to Business
A host of officeholders retire from the U.S. government and subsequently obtain employment from lobbyists, and more recently corporate executive boards. It is a noteworthy phenomenon that is discussed, but not always emphasized to the extent that the business-to-politics route is.
A recent Washington Post article describes research that outlines the telling career changes made by outgoing governors and members of Congress. According to their research, “More than 45 percent of senators who have left office since 1992 have served on the board of a publicly traded firm.” The researchers further analyzed data to show that corporate executive boards heavily favor former senators and governors, even if they barely won races. The research thus suggests that a transition from public office to a role in the corporate world proves to be a natural, trending one.
Former government officials bring expertise, especially if they’ve worked on congressional committees that pertain to the industry at hand; such was the case for retired Senator Mike Johanns. These individuals are thus attractive candidates. They serve as Washington insiders who have the ability to wield influence and who have connections with policymakers.
The Ethics Reform Act of 1989 and associated lobbying regulations serve as the government’s version of a non-compete clause. These rules limit the immediacy with which former staff and officeholders can operate in Washington’s adjacent spheres of influence. However, they do not restrict a former officeholder’s ability to obtain a position on a company’s board.
For instance, former Senate majority leader, George Mitchell went on to fulfill executive roles at Walt Disney Company, Xerox Corporation, Unilever, Staples, Inc., Starwood Hotels and Resorts, and other corporations. More recently, Eric Cantor, the former House majority leader gained passage into the corporate world after a surprising defeat in 2014. Currently on the board of directors at an investment firm, Moelis & Co., Cantor stands to make over $3 million in his first year.
A Two-Way Street
The bridge between the world of politics and business is present and thriving. The path from business to politics gathers significantly more attention, but a shift in the opposite direction often goes unnoticed. The key here is that we recognize this path is indeed two-way. While in office, politicians frequent the media as a result of public statements, voting decisions, and legislative agendas. But as soon as they leave public office, we tend to forget about their continued impact on policy and politics. By realizing the existence of this two-way bridge, we can begin to understand the way in which public figures influence government as we know it. And so, while this intersection of business and politics might not always directly impact the American citizenry, the leaders of our nation who often epitomize this intersection certainly do.
Image Credits: Wikimedia/Pui Shan Chan