By Alec Hogg
With all the media noise, it is difficult to keep an open mind on what is happening in the United States right now.  But we must. Because, at almost $18 trillion, the US accounts for one quarter of the world’s $73.5 trillion GDP. Decisions there are amplified elsewhere, especially in open economies like SA.
Best way to cut through clutter is first assess what we know. And it is now obvious US President-elect Donald Trump has no intention of taking on a political mantle. He regards his position as CEO of an America Inc that’s in a desperate state and in dire need of a turnaround strategy.
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This is obvious in the way he is appointing his cabinet. Trump has been conducting personal interviews with a few candidates for each position. First, they must agree the US has been incompetent in agreeing terms of its international engagements. Then he wants to know what they would do about it.
This is how most successful corporate CEOs would approach their key appointments. But it is a radical break with the Washington norm where politics dictates. For instance, Barack Obama and George W Bush conducted only a single interview with the candidate agreed after discussion with party leadership.
Trump believes his immediate challenge is to reverse the US’s poor terms of trade with competitors – which he sees as every other country on earth. He believes the US sent the wrong people to do their negotiating and that they have consistently been bested, especially by the Chinese.
Yesterday, the US President-in-waiting appointed CEO of Exxon Mobil, Rex Tillerson, as his country’s leading diplomat. Media pundits are alarmed that the new Secretary of State is “close” to Russian President Vladimir Putin because of his many visits there and Exxon’s extensive business dealings with that country.
For Trump, that is a strength. He is moving closer to Russia in various ways.
Also, Trump knows that in these volatile times it takes someone special to successfully run the world’s biggest oil company, a $370bn giant twice the size of its nearest competitor. It helps, too, that Tillerson is an honourable being – an Eagle Scout, he chaired value-driven Boy Scouts of America between 2010 and 2012. And he is self-made, independently wealthy, so can’t be bought.
Trump’s new Treasury (Steven Mnuchin) and Commerce (Wilbur Ross) Secretaries are also businessmen with zero experience in politics. This is reminiscent of Ronald Reagan’s surprise but hugely successful appointments made during the early 1980s when he tapped top business executives George Schultz, Donald Regan and Malcolm Baldridge to run critical portfolios.
Reagan’s cabinet’s new ideas overcame Jimmy Carter-instilled stagflation ushering in a period of great prosperity for the US. Trump has read The Gipper’s manual, is also betting on meritocracy – and the power generated by unleashing human potential. Can he repeat the trick. You betcha.
