WASHINGTON — With the struggling economy now issue No. 1 in presidential campaigns, former Massachusetts Gov. Mitt Romney points to his chief executive officer background to argue that he's best qualified to become the nation's chief executive.
He'd bring the most business experience to the White House since mining magnate Herbert Hoover was elected 80 years ago. But in his single term as president, Hoover ushered in the Great Depression.
That underscores that business acumen doesn't necessarily translate into political success. In fact, the road to the White House is littered with the broken dreams of businessmen who mistook success in money for destiny's call to Washington.
The son of a former CEO of American Motors Corp., Romney is steeped in business. He graduated near the top of his class at the Harvard School of Business and co-founded Bain Capital in 1985, turning a start-up venture capital firm into a behemoth that today boasts $65 billion in assets under management.
Venture capitalists are risk takers, often investing their own money in companies that have big ideas but need capital to get going. The risks are immediate, but the payoff for venture capitalists is often years down the road. Romney and his company were instrumental in helping Staples Inc., now a leading global office-supply company, get started.
Romney's time at Bain gives him a measure of credibility when he claims long-term vision and the ability to spot opportunity where others don't.
"Bain was one of the earliest of these firms. . . . There wasn't a road map to how you would create a firm like this, how you would create value with investments like this," said Randal Quarles, a former treasury undersecretary and a managing director of the Carlyle Group, a leading private-equity investor. "You have to really understand the workings of the economy to know where value can be created and where it can't. It's not merely an academic analysis."
Romney's experience at Bain, getting into the details of company finances and operations, gave him a thorough understanding of the challenges that corporate America faces.
"One thing that's true is that you have to be a generally good professional to succeed in that business," said Michael Weisbach, a finance professor and expert on leveraged buyouts at the University of Illinois-Urbana. "You need to be able to work with people, evaluate businesses and make hard decisions about that. It's a much more generalist's job than, say, working at Goldman Sachs."
Bain's main business quickly grew from venture capital into the more controversial field of leveraged buyouts. Such companies — dubbed "corporate raiders" by critics — go deeply into debt to purchase underperforming businesses. They help turn around the struggling companies and sell them for handsome profits.
Some leveraged-buyout firms have earned reputations for stripping and flipping, getting rid of workers and assets and quickly reselling companies for steep profits. The rap on them is that they're not focused enough on community development or job creation, only on delivering returns to investors.
Corporate raiding came back to haunt Romney in 1994, when he ran against Democratic Sen. Edward Kennedy in Massachusetts. Bain Capital had purchased American Pad & Paper, which then bought and shuttered a competitor in Indiana to lock up its market share. The acquisition meant job losses, and angry workers came to Massachusetts to vent. The attention they received from the news media helped derail Romney's Senate bid.
As Bain grew in size and stature, Romney gained experience at running a large business. This proved helpful when he became the CEO of the 2002 Winter Olympics in Utah, helping to save the games by rescuing them from financial scandal. On the back of that success, Romney won the governorship of Massachusetts that year.
While he's succeeded as a business executive, it's not clear that that necessarily would make him a good president.
"There is more to politics than corporate process," said Steve Forbes, the billionaire publisher of Forbes magazine who twice ran for the Republican presidential nomination. "But what it should do is give you an intense appreciation of what it takes to make a business function."
Romney's knowledge of tax policy and the complex world of finance, Forbes and Quarles said, makes him unusually well qualified to address problems on Wall Street and in credit markets.
However, business skills seldom have translated into effective presidencies.
"These (effective presidencies) are certainly not cookie-cutter things," warned Fred I. Greenstein, a professor emeritus in politics at Princeton University.
Previous experience is relevant, he said, "but it may point to different directions, and you can't just project from a job title or category."
Peanut farmer Jimmy Carter made millions in agribusiness, for example, but as president he micro-managed issues so closely that it virtually paralyzed his presidency, said Greenstein, the author of the 2004 book "The Presidential Difference: Leadership Style From FDR to George W. Bush."
Bush, who like Romney earned a Harvard master's in business administration, delegates so much that he views himself as more a decider than a manager.
Successful presidencies, Greenstein said, often depend on political skills such as those touted by Democratic Illinois Sen. Barack Obama or Romney's chief Republican rival, Arizona Sen. John McCain. Both have forged reputations as successful political leaders by reaching across the partisan aisle to find common ground on issues of mutual interest.
Management guru Jack Welch, the former CEO of General Electric, cites six business leadership traits for an effective president: authenticity, communicating a vision, hiring good people, resilience, sensing shifts and the ability to execute.
When sizing up a candidate, he says in the current issue of Business Week, voters should pay close attention to leadership.
"Its characteristics, in the corporate world and the political arena, are universal — and unmistakable," Welch wrote.