Sunday, April 8, 2007


Most government leaders are lawyers by background, including Elizabeth May, leader of the Green Party. People have argued that in most countries, it is normal for lawyers to be leaders and for business people to advise the lawyers on business/economic matters. Yes, this is the norm. This is because for the past 100-200 years, it was natural and it was the best fit for lawyers to run government because countries needed people who can enact laws. However, it was also the norm 100-200 years ago for economies to be extremely simple. Towns did not trade with other towns, let alone other countries. It was also the norm for 95% of the population to be farmers, and for women to stay at home. Things change...all the time. Many ways of doing things have become obsolete in the past 10 years, let alone 100. We now have global economies. Economies have become extremely complex, so much so that even most Business grads are not masters of the economy or business until after many years of work experience. Having Lawyers manage the economy is analogous to having Engineers manage law firms with Lawyers advising the Engineer.

There are two disciplines of intelligence: Qualitative and Quantitative. Subjects such as literature, languages, sociology, law, etc., are Qualitative. Subjects such as math, science, economics, etc., are Quantitative. There are some people who are intelligent in both disciplines. However, many who are intelligent qualitatively are not quantitatively, and vice-versa. We have all known students who can write endless essays but cannot divide two numbers, and students who can calculate logarithms or program computers but cannot write a short story. To get into Law School, you must write the LSAT (Law School Aptitude Test), which consists of mainly qualitative questions. To get into Medical School, you must write the MCAT (Medical College Aptitude Test), which consists of mainly quantitative questions. To get into some MBA Schools, you must write the GMAT (Graduate Management Aptitude Test), which consists of 40% quantitative questions and 60% qualitative questions.

Lawyers are very intelligent people, but we have an uneven balance of Qualitative leaders. Consequently, our Quantitative matters are grossly mismanaged, such as Budgets, Deficits, Debts and Fiscal Policy.

When voters are polled, voters usually say that the most important issue to them is money, or something related to money: "jobs", "economy", "cost of living", "taxes", "inflation", etc., not law. Money is more important to voters than abortion, education and even healthcare. Money is dependent on a healthy economy, which is dependent on well managed businesses. Therefore, we need business-people or economists to manage the country, not lawyers. Some argue that the lawyers will have economic advisors. We do not understand the logic in this. If the economy is the most important thing to manage in the country, because of money, then why have people who don't understand the economy to manage the country? If you need surgery, would you have a lawyer cut you open while some doctors are standing on the side advising the lawyer?

People have argued that we need generalists as leaders, and that these generalists need to know how to pick the right specialists. CEOs, Chairmen, Entrepreneurs and successful business leaders are generalists as well. They know how to pick the right specialists: CFO, CIO, COO, CMO, VP of Operations, VP of Production, VP of Human Resources, VP of Legal, etc. What executive experience do lawyers have? What experience do lawyers have in picking VPs?

Some CEOs have managed 400,000+ employees. How many employees have lawyers managed before becoming a Senator, MP or leader of the country?

Also, Business Leaders understand the issue that is most important to voters, better than lawyers. They can get specialists to advise them on Legal issues, Healthcare, Education, Welfare, Military, etc. Not only do CEO's have experience in picking specialists, they have experience in getting new customers/partners and increasing revenue, profit and employees (JOB CREATION).

In any business, whether you are selling lemonade or complex consulting, the two most important functions are:

  • making the product or service
  • selling the product or service (some argue that this is the most important)

Every other function is considered Support, such as Legal, Human Resources, IT, Finance, Operations, etc. In most large businesses (which are micro-economies), the leaders are not lawyers. Lawyers perform a support function. They draft and review contracts. The leaders are business-people who know how to generate revenue, profit and wealth for the business (micro-economy).

In large companies, the CEOs usually come from Sales or Marketing, not Legal or Human Resources. (Even so, CEO's still pick a CMO or VP of Sales.) If the country wants economic leaders/managers, why have lawyers do this job when they should be part of a support function?

Take the CEO of GE as an example. He has dozens of advisors: Vice Chairmen, CFO, SVP, CMO, General Counsel (Legal), Human Resources, Healthcare, Business Development, CIO (Information Technology), VPs, Directors, etc., etc. GE is in about 100 different industries/businesses and in 100 countries around the world. The CEO manages 327,000 employees. He (and his management team) would've worked in or travelled to dozens of countries.

How much executive experience do most lawyer-politicians have prior to becoming leaders of the country? How many advisors have they had? How many employees have they managed? How much foreign experience did they have? How many countries have they worked in or even travelled to?

GE's CEO has an MBA and came from Sales and Marketing. He knows how to grow a business (micro-economy), create wealth and CREATE JOBS. It's unthinkable to put a lawyer in charge of GE. How many jobs have lawyers created before becoming leaders of the country? What micro-economy have they grown?

It's equally unthinkable to make a lawyer be CEO of almost any other company in the world, other than law firms. And, the legal industry is tiny compared to hundreds of other industries, such as Telecommunications, Banking, Technology, Transportation, Manufacturing, Media, etc.

GE CEOMost Lawyer-Politicians
before becoming Leader
of the party or country
Proven that he can leadYesNo
Proven that he can be a generalistYesNo
Executive Experience15-20 years0
# of employees managed327,000? handful?
# of advisorsdozens0
Proven that he knows how to pick the right advisorsYesNo
Proven that he knows how to pick the right adviceYesNo
Proven Qualitative IntelligenceYes (GMAT)Yes (LSAT)
Proven Quantitative IntelligenceYes (GMAT)No
Educated in growing a micro-economyYes (MBA)No
Proven that he can grow a micro-economyYesNo
Proven that he can create jobsYesNo
Proven that he can create wealthYesNo
Proven that he can do all of the above without borrowing and driving the entity into debtYesWill have to pay for his promises by borrowing from future generations
Proof that he doesn't listen to the right adviceNoNo lawyer-politician has listened to US top accountant about the huge debt problem: 60 Minutes episode

Economists on TV, including Nobel Prize winner Krugman, have criticized vehemently about McCain's and Obama's promises (tax breaks, increased spending and debt) and how they are unsustainable. Do you think they are going to listen to this economic advice? Of course not. They don't understand or care about the ramifications of debt. If you ran a company like GE, you can never have a negative net worth. Most economic advisors have told lawyer-politicians to cure the debt problem. Most lawyer-politicians do not listen. Watch the 60 Minutes episode. The US Comptroller is the top accountant, is quantitative and screaming about the debt. No lawyer-politician is listening. Why they are not listening is a good question. We can guess that they are not listening because lawyers are not quantitative, or because they know that it is easier to win elections by buying votes than to be fiscally responsible. Ross Perot, a business leader, listened, but he never got elected, partly because he was an independent.

Which of the following is better?

"Obama… met… with a group of economic experts that included several from President Bill Clinton's administration in the 1990s." "As he talked to reporters he was flanked by Robert Rubin and Larry Summers, former treasury secretaries under President Bill Clinton. Obama also met with former Federal Reserve Chairman Paul Volcker and Laura Tyson, former chairwoman of Clinton's Council of Economic Advisers."

"ex-CEO of GE… met… with a group of economic experts that included several from President Bill Clinton's administration in the 1990s." "As he talked to reporters he was flanked by Robert Rubin and Larry Summers, former treasury secretaries under President Bill Clinton. Obama also met with former Federal Reserve Chairman Paul Volcker and Laura Tyson, former chairwoman of Clinton's Council of Economic Advisers."

GE's CEO is not the best leader if voters' top priority is Environment, Welfare, War, etc. He is a better choice if their top priority is the Economy.

However, the challenge is getting people like GE's CEO to run for public office. He makes $19 Million per year. President of US makes $250,000. GE's CEO doesn't have to deal with reporters scrutinizing his daughters and personal life. He doesn't have to impose on his family and parade them on stage. He doesn't have to have his school photos shown on CNN. He doesn't have to explain why he smoked drugs in school. He doesn't have to be ridiculed by the opposition and comedy shows. He doesn't create any enemies as every politician would. He doesn't have to have a public life. He can have privacy and live luxuriously.

On October 29th, 2008, Bill Clinton tried to explain why Obama was silent during the financial meltdown. He said that Obama phoned about 6 people including Bill and Hilary to understand what was happening in the financial markets, before he came up with a plan. He said "Obama can understand."

Translation: Obama does not understand economics and finance. You cannot understand economics and finance from 6 phone calls. It takes years to understand and decades to master. People with degrees in Economics don't fully understand. Nevertheless, Ron Paul, Mitt Romney and thousands of others wouldn't need to phone 6 people to get tutorials on Economics 101. At least McCain has admitted that he doesn't understand Economics. Obama (and Clinton) should also admit that he does not understand. Obama won lots of votes with his energetic speeches about scrapping Free Trade with Canada. Unfortunately, speech-giving skills is more important than knowing how to manage an economy. This is related to the problem with democracy.


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