In the midst of the talks in Washington to obviate the
so-called fiscal “cliff” with a bipartisan deal, the Wall Street Journal
reported that David Cote, the CEO of Honeywell, a $48 billion “industrial
giant,” was at the time “the business executive most in the middle of the
fiscal-cliff debate.” The Senate Finance Committee Chairman Max Baucus (D.,
Mont.) said, "People on both sides of the aisle are sending messages
through Dave. He's become an active participant.” For a sitting CEO to have
ensconced himself so deeply among the power-players in Washington did not come
controversy-free. Even though his company had a vested interest that a deal be
reached, the matter of his involvement raises larger implications, positive as
well as negative.
"I'm being accused
of all kinds of nefarious motives just because I'm a CEO," Cote claimed.
He also conceded his cause diverts a lot of time from his job but says he tries
to make it up from his personal time. In any case, "the best for my
shareholders is a robust economy," he explained, "which can't happen
if the country is gridlocked over debt." True enough—a rising tide
benefits all boats. However, as the Wall Street Journal points out, “Cote's
efforts could benefit his business. Absent a cliff deal, deep cuts in federal
spending on defense and many other programs will kick in. Success in averting
them could help Honeywell, an aerospace and defense contractor that draws 10%
of its $38 billion in annual sales from the government.” This point could not
have been lost on the CEO. Honeywell’s stockholders were not volunteering their
CEO in a sort of civic duty or good “corporate citizenship.”
Moreover, that the CEO of a major defense contractor was
spending so much of his time as a go-between
in Washington so a deal that would obviate automatic cuts including defense spending might have a
better chance of being reached by Republican and Democratic leaders points to
the depth of interest by the
military-industrial complex in the task. I would not be surprised to learn that
various government officials, including the Federal Reserve chairman, Ben
Bernanke, were not themselves “carrying the water” for the government-dependent
sector in stirring up doomsday predictions lest a deal not be reached in time
to avoid “falling off the cliff.” Besides influencing the debate itself through
ads and other, less transparent means, the sector with the most to lose was “bucking
up” to keep the defense contracts coming. From this standpoint, it is
surprising that Washington’s political elite had not fallen into line and come
up with a deal by November.
“We’re not confident that our guys can govern anymore,” Cote
observed as he was carrying messages between Republican Congressional leaders
and the White House. While this observation could be oriented to
the lack of responsiveness to the “sway” of the military-industrial complex in
the halls of power, he said his role as political-deal-facilitator has been a
"revelation” on how dysfunctional Washington had become simply in terms of
being able to get along. "I meet people on both sides I like and find
reasonable,” he said, “but they aren't working together." This is
particularly significant, given the
interest of the complex that a deal be reached. Might it be that
ideological differences on government (or even immaturity) can actually bristle
at, or even resist the power of money in Washington?
For instance, has ideology in the Republican Party on the role of government in the economy gone
against the interests of Wall Street or corporate America, or is the ideology effectively a reflection of the whatever
that base determines is its rightful interest? I suspect that there was no way
that Republican leaders were going to let a deal slip by, even given the
appearances to the contrary in the meantime as the leaders sought to get better
terms by waiting until the last possible moment to seal a deal. However, were
such a resolution “in the cards” given the underlying “marching orders,” why
would Honeywell’s CEO have been spending so much time “carrying the water” in
Washington?
That there might have actually even been a chance that the military-industrial
complex could be subject to budget cuts is amazing, considering the power of
money in the United States. Put another way, why would a man whose total direct
compensation in 2011 was $25 million and whose retirement package assets were
at $78 million feel the need to carry anyone’s
water—especially given that his “Fix the Debt” non-profit had raised $43 by
mid-December 2012 and could unleash television ads against “dysfunctional”
elected officials who had not “gotten the message.” Something is really up when
a real insider feels compelled to get
so explicitly and personally involved—even given Honeywell’s financial interest
that a deal be reached.
In short, there are wider implications for David Cote’s
involvement amid the political class in Washington. His own, his company’s, and
his sector’s financial interests notwithstanding, that a person of his stature
would roll up his sleeves and get to work in “dysfunctional” Washington suggests
that he is exactly the sort of person to who the American Founders would have
called on to serve his country out of
a sense of civic duty. Even as Obama was being urged to put Cote in his cabinet
as Treasury or Commerce secretary, the CEO was saying, "I can't wait to
get out of here and back to my day job." This sentiment, rather than a
desire to run for office, should be “just the ticket” needed for admission to a
fixed term of “duty” in Washington—then freedom. This is what citizenship means—realistically
in the context of even vested interests. Even as Cote doubtless had his in
mind, he was also going beyond the pale as a CEO actively working to craft a
deal in at the highest level of the U.S. Government.
To be sure, David Cote could have been a rare snapshot of the military-industrial complex getting "its people" back into line in a Washington "unhinged" from its real principals. However, it could also be that the man deserves a lot of credit for stepping up
to the plate in a ballpark not typically frequented by CEOs not only to protect his company, but also to tackle the systemic imbalance evinced in a public federal debt of over $16 trillion at the time. If so, the President would have been well advised to use him well—rather than too much—out of
respect for the man’s public service. A restoration of the civic duty of citizenship can indeed be distinguished from the threat of plutocracy to a republic.
Source:
Monica Langley, “Honeywell CEO in the Middleof Fiscal Cliff Standoff,” The Wall
Street Journal, December 13, 2012.
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