Petulant Trump Shows Why Businessmen Make Poor Politicians

Yesterday, Donald Trump reached a new low, even for him. He complained about the press coverage of his charitable activities on behalf of veterans. “The press should be ashamed at themselves, and on behalf of the vets, the press should be ashamed of themselves. They are calling me and they are furious,” Mr. Trump said. “Instead of being like, ‘Thank you very much, Mr. Trump,’ or ‘Trump did a good job,’ everyone said: ‘Who got it? Who got it? Who got it?'” Mr. Trump said. “And you make me look very bad. I have never received such bad publicity for doing a good job.” In truth, the question of who got charitable contributions does matter; like businesses, some charities are more efficient than others. Mr. Trump’s tantrum illustrates the problem businessmen have in becoming politicians. They don’t like being held accountable.

There is no such thing as democracy in business. Each and every corporation is a top-down dictatorship. The top man (usually it’s a man) decides what happens, and everyone else either falls in line or gets to find a new place of employment. There is no such thing as the loyal opposition. In public companies, there are some governmental requirements about disclosure and holding annual shareholder meetings, but those have been forced on businesses.

While the shareholders, in theory, have the power to hire and fire members of the board and senior management, that actually happens in the rarest of cases. More often than not, a shareholder becomes disillusioned, disappointed or otherwise disgusted with management, and he sells his shares. The opposition effectively goes into exile.

In private firms, this is even more extreme. Privately held corporations needn’t disclose anything. They can make whatever rules about corporate governance they want so long as the rules don’t actually violate laws concerning fraud, taxation and so on.

The one thing businesspeople hate most is the annual audit. Outsiders armed with the rules of accounting and a knowledge of the regulations come in and look over all the financial information. They ask questions and demand information. They act just like the press in that regard. And business people don’t like it.

Mr. Trump owns and operates the Trump Organization, a privately held firm in which he and his family are the owner-operators. Anyone outside the circle of Donald Sr., Donald Jr., Ivanka and Eric Trump has no say in what happens. Their disclosures to the public are carefully staged media events. The tax returns are not open for inspection, the holdings of the firm are the same, its debt profile unavailable. In short, no one questions The Donald.

Now, some reporters asked questions that were perfectly reasonable. Mr. Trump claimed to have raised $6 million for veterans charities. An editor will want to know: which charities, how much each got, was it exactly $6 million, who donated how much and other simple facts. This is what journalists do. If a reader went through an entire article about this and if those questions were not even posed, let alone answered, it would be a lousy article because if failed to inform.

Mr. Trump, and other CEOs, make business decisions all the time, and some are good while others bad. The good ones they want in press releases, and the bad ones they want to sweep under the rug. That is human nature. No one likes criticism nor to be reminded of shortcomings. Yet that is a vital part of democratic government.

Businessmen and businesswomen flourish in an environment where there are few if any checks and balances on their actions. Politicians face constant scrutiny. It is a very rare individual who can adapt. Mr. Trump is hardly rare; indeed, he’s as common as muck.