Editor's Notes

Whitman thinks that her experience in private business will make her a good governor



I have been watching and listening to the Meg Whitman for Governor ads, and they all seem to have the same basic message, one we've heard many times before from rich former executives wanting to get into politics. Whitman thinks that her experience in private business will make her a good governor, that she can run the state the same way she ran eBay.

Her policy proposals are horrible (just check out what she wants to do to the schools and how she plans to cut the state workforce by 40,000 people, a brilliant move in a recession). But beyond that, there's a serious disconnect here.

See, California isn't a business. And private-sector training, private-sector models, and private-sector management don't translate very well.

At eBay, Whitman's goal was to make money for shareholders. The idea was to expand markets, grow market share, increase revenue, and keep expenses low enough that at the end of the year, there's a nice profit left over. Not to go all Marxist or anything, but you had to pay every employee a bit less than actual value of their work; that's how investors make money.

California is — at best — a nonprofit, and even that model doesn't directly apply. Forget the political skills it takes to work with the Legislature and thousands of interest groups and stakeholders. Just consider the basic economics.

The state doesn't exist to make money, but to provide public services. Fiscal prudence may be necessary to keep things afloat, but it's not the point. As the late, great David Brower used to say, any environmental group that isn't busting its budget, isn't doing enough work. Revenue doesn't exist to pay dividends, or even big salaries. In a well-run state, just about every dollar that comes in gets spent. And many of the outcomes — the results that CEOs are always looking for — can't be easily quantified, certainly not in the short term. (Spend an extra $20 billion on public education and you'll definitely get better schools — but you might not get better test scores, certainly not for the first few years.)

There's a reason that CEOs don't tend to do well in politics. It's a different game.