Commentary: Jared Kushner and the fallacy that top businessmen make good political leaders

Commentary: Jared Kushner and the fallacy that top businessmen make good political leaders

The businessman imagines he is a generalist but the truth is, he is a specialist, says one observer at the Financial Times.

WASHINGTON: When Warren Harding was 19, in 1884, he bought a small Ohio newspaper, probably for US$450. By the time he ran for president in 1920, it had made him rich. 

Harding campaigned as an entrepreneur, promising “less government in business and more business in government”. He is often described as the worst US president until now.

The “businessman fallacy” - the notion that a rich businessman (never a woman) can run government better than a mere politician - is Donald Trump’s basic promise. That’s why the combustion of his son-in-law, fellow real-estate heir and senior adviser Jared Kushner, whose business dealings in the White House scream conflict of interest, is so telling. 


Kushner incarnates the businessman fallacy. 

It is a lot simpler to run a company than a country. It’s not even the difference between checkers and chess. It’s the difference between checkers and playing simultaneous chess on infinite boards.

Especially in the US, a company has one aim: Making profits, usually in one sector. The simplest companies -  privately owned family businesses like Kushner’s and Trump’s - don’t need to worry about shareholders. The boss decides. 

He doesn’t waste time listing his foreign contacts on bureaucratic forms. If an employee gets in the way - like James Comey, head of the FBI, obsessing over imaginary Russians - you sack him: Pow! No boring checks and balances in New York real estate.

By contrast, governments deal with “wicked problems” that can’t be solved (or even fully understood) but only managed, including social injustice, hostile powers or climate change. 

The “solutionism” of Silicon Valley rarely works in politics.

Running the government is a little like running a large publicly quoted conglomerate, or the US military. But in fact, the presidency itself is unique, so the candidate’s character and intelligence matter more than his experience.


The businessman-turned-politician is often blinded by hubris. This usually stems from the “money delusion”: The idea that life is a race to make money, and that rich people (“winners”) therefore possess special wisdom.

Many businessmen imagine they pulled themselves up by the bootstraps in a free market, something that more people could do if only there was “less government in business”. This self-image usually omits context. 

The fact, say, that the businessman’s father built the company (before being jailed on a ridiculous technicality) or that government enforced his contracts and schooled his employees. A corrective to the businessman’s fallacy is to consider what happens to businessmen in Congo - they die young of cholera.

Kyle Pope, who edited Kushner’s newspaper The New York Observer, recalls the boss’s “disdain” for journalists: “It was almost like, ‘If you earn US$30,000, US$40,000 a year ... you must be a total loser,’” he said in a Vanity Fair podcast. 

Kushner seems equally disdainful of loser bureaucrats working in grubby government offices (remember that Trump called the White House a “dump”). When you’re handling China, why listen to so-called China specialists who haven’t even fixed the China problem?

Rich Americans tend to feel contempt for politicians because they have learnt to treat them as lowly service providers who will sit up and beg for donations. 

Kushner’s father, a Democratic donor, once even had Benjamin Netanyahu to stay at his house in New Jersey. (The future Israeli leader got Jared’s room; the boy moved to the basement.)

The businessman imagines he is a generalist. He made money (at least his dad did), so he can apply his skills to any political problem. 

The truth is, he’s a specialist. He knows New York real estate, but not Iraq.

Anyone running a long-standing family company almost inevitably enters government with conflicts of interest. From age five, he has imbibed dinner-table conversations about the company’s wellbeing. All family relationships are structured around it. 

The family business is who they are, says Mike Driver, a successful British entrepreneur who now helps other entrepreneurs sell their businesses. 

How could you ever expect that person to not act in the best interests of that business?

This dates back even before Silvio Berlusconi. When Harding was president, the managing editor of his Ohio paper contacted him with problems, asking, “Do you have any connections to help us?”

The family business also structures relationships beyond the family. Driver says: 

For people who live that kind of life, everyone you meet can do something for you. They probably don’t even think it’s wrong. It’s just the nature of their relationships.

If a fellow rich businessman whom you meet on government business can help you with a pesky US$1.2 billion mortgage due on 666 Fifth Avenue next year, that’s serendipity.

Many businessmen believe politicians get to blunder with impunity, while in business (often described as “real life”) only the best survive. This belief has outlived Trump’s six corporate bankruptcies (even his casinos went bust), and Kushner’s purchase of 666 for a record price at the market peak in 2007.

Kushner looks doomed, and Trump probably won’t become president for life. But America’s next businessmen-saviours are lining up in Silicon Valley.

© 2018 The Financial Times Ltd. All rights reserved. Please do not copy and paste FT articles and redistribute by email or post to the web.

Source: Financial Times/sl