Kevin Horrigan in his Sunday column in the St. Louis Post-Dispatch brought up a study (pdf) by a couple of academics that question the practice of “peer benchmarking” CEO salaries in order to keep them from moving on to more lucrative jobs. The idea is that companies have to pay more in order to keep talented CEOs in place. The two researchers, Charles M. Elson and Craig K. Ferrere, question the wisdom of that practice:

…  Scholars have long recognized a distinction between firm-specific and general skills. It is quite apparent that successful CEOs leverage not only their intrinsic talents but also, and more importantly, a vast accumulation of firm-specific knowledge developed over a multi-year career. Whether it is deep knowledge of an organization’s personnel or the processes specific to a particular operation, this skill set is learned carefully over a long tenure with a company and not easily capable of quick replication at other firms. In fact, when “superstar” executives change companies, the result is usually disappointing.

Horrigan was interested in the issue of CEO compensation, particularly as it involves Robert R. Archibald, the embattled director of the Missouri Historical Museum. It strikes me, though, that the point is just as apt when applied to businessmen who claim that their business success will allow them to shine as government leaders.

My thoughts went immediately to two GOP candidates for high elective office who want us to believe that they are qualified for those positions because of their past business careers: Missouri gubernatorial candidate Dave Spence, and ex-financial mogul and current presidential candidate, Mitt Romney. However, the Elson and Ferrere study suggests that there is nothing in the background of a successful financier and a plastics manufacturer that would necessarily translate to success in government.

Certainly history suggests that businessmen in government are rarely effective leaders. According to journalist Daniel Akst who consulted with Historian Barbara Perry about the relationship between the success of twentieth century presidents and their earlier careers:

It’s important to know whether a president has worked in business. It’s important because having worked in business is associated with being a lousy president, at least in the modern era.

Recollect that while Mitt Romney was successful in the highly specialized financial realm, he was also by many measures a failure as governor of Massachusetts. The performance of the Massachusetts economy under Romney wasn’t that great to say the least – there’s a reason few in the state support his presidential bid. Although Romney has tried to claim that the fault lay with the Democratic legislature, the current Democratic governor, Patrick Duval together with a largely Democratic legislature has been able to  rescue the state from the Bush recession twice as fact as other states. Massachusetts currently ranks in the top 10 states in job growth. So much for Romney’s vaunted claims to understand what makes an economy successful.

Nor, by the measures that Elson and Ferrere suggest, should we assume that Mr. Spence’s success in a very specialized plastics business would translate into the skill set that would allow him to take the reins of a complex state government. As for his more generalized management skills, we have only to examine his to-date feckless, largely self-financed campaign, to get an idea of his ability to run entities that are not organized around a specific body of manufacturing knowledge.

None of this is surprising, of course. Think of successful businessman and colossally failed president Herbert Hoover. Or, to take a more recent example, think back to the hilarious spectacle of real estate tycoon Donald Trump contemplating a run for President and it’s easy to conclude that instead of a savy manager, successful businessmen transplanted to government are apt to prove either inept as in Hoover’s case, or total clowns, as would surely be the case were Trump to ever win office.  

I don’t know if you’ve noticed, but Missouri GOP gubernatorial candidate Dave Spence and Mitt Romney, who is sorta, kinda, occasionally, the leading GOP presidential candidate, have lots in common:

1. Spence is rich and Romney is rich (though to be fair, Romney isn’t just rich, he’s super-rich).

2. Given the newfound media concern about the growing financial chasm between the 99% and the 1%, both want to downplay that fact. Spence and his surrogates (i.e., Peter Kinder) emphasize the self-made millionaire angle. Ditto Romney –  when he isn’t choking on his silver spoon. Who could forget Mitt’s stories about his days as an unemployed millionaire. Or the Mitt who’s qualified to feel our pain because he’s lived in the “real streets of America,” which he apparently confuses with the private streets in a spate of exclusive, gated communities.

3. Both Romney and Spence have what we euphemistically refer to as a problem with the truth:

— Romney has a particularly rich record in this regard. So much so that Steve Benen began keeping track of Mitt’s fibs on a weekly basis at the Washington Monthly; you can find some of those compilations here, here and here. Benen has continued collecting Mitt’s whoppers in his new job at The Maddow Blog, where he posts them each Friday (read the last two weeks’ worth here and here).

— Although he has been in the public eye for a much shorter time, Spence is no piker when it comes to concocting convenient narratives. We all know the story of his home economics degree by now, and we also know that, contrary to what he tried to imply, he meant to deceive and he’d been doing so for some time. If that isn’t enough, Spence’s effort to evade responsibility for the TARP misadventures of Reliance Bank while he sat on the Board of Directors – from which he profited handsomely – smells just about as fishy.

4. Both men like to brag that they have demonstrated that they have what it takes to govern because they were successful businessmen. Remember the last CEO who was elected president? A genial go-getter named Herbert Hoover who managed to dig the great depression even deeper with his conservative business management ideas.

As far as that goes, we’ve already seen that, in Romney’s case, running a for-profit didn’t translate that well into running a state. There are, believe it or not, differences between government and the world of finance. During his stint as Governor of Massachusetts, which was flattened by the 2001 recession, the state ranked 47th in job creation.

Whether or not Spence would do better is, of course, moot, but the ideas he’s putting out there on the topic of jobs don’t suggest that he’ll bring anything to the table that you couldn’t find by tapping any run-of-the-mill GOP hack.

So there you have it. Big-time presidential Tweedledum and (relatively) small-time gubernatorial Tweedledee.* A couple of millionaires who, now that they have time to kill after feathering their nest in the world of finance, want to feather their caps in the public sphere.

*Slightly edited for clarity.