Yahoo Finance Every Democrat should work for McKinsey, like Pete Buttigieg
Oh, the horror. Democratic presidential contender Pete Buttigieg worked for consulting firm McKinsey for three years before entering politics in 2011. McKinsey helps large organizations run their operations more efficiently. In his three years at the firm, Buttigieg worked on projects for outfits such as Blue Cross Blue Shield of Michigan, Best Buy, The US Postal Service, and Canadian grocery chain Loblaws.
What? You’re not outraged yet? Well, wait, there’s more. Two years after Buttigieg worked on the Blue Cross account, Blue Cross announced layoffs because it was losing money. Layoffs! Don’t you see? Buttigieg and the evil consulting firm persuaded Blue Cross to fire workers and ruin their lives, because that’s the only way to survive in the rapacious world of budgets, payrolls and operating costs. The New York Times editorial board scolded Buttigieg. Rachel Maddow is displeased.
Maybe this would be less controversial if Buttigieg worked for a different consulting firm, such as Deloitte or AT Kearney. The elite McKinsey has endured a reputational hit lately due to its work helping the Trump administration streamline aggressive processing of migrants at the southwest border. McKinsey has also worked for oppressive regimes in China, Turkey, South Africa and Russia. “They enable these regimes,” one U.S. diplomat told the New York Times.
Buttigieg didn’t work on those accounts, however. He studied Canadian grocery pricing and organizational overlap and found it boring, one reason he ran for mayor of South Bend, Ind., in 2011—and won. As mayor and now a presidential candidate, Buttigieg seems to have a better grasp of what the private sector does well, and what government can do better, than many of the other candidates. Maybe McKinsey helped him figure that out.
Buttigieg doesn’t favor government control of everybody’s health care, the way Bernie Sanders, Elizabeth Warren and some other Democrats do. And Private-Sector Pete is closer to the general electorate’s view than his more liberal competitors.
Sen. Kamala Harris, a government employee for most of her career, began her presidential campaign by endorsing the Sanders Medicare plan and saying the country should eliminate private insurance. Harris later backed away from that, struggling with mixed messaging until she dropped out of the race in early December. Elizabeth Warren, an academic for most of her career, also retreated from Medicare for all, as the costly plan drew more scrutiny and opposition. A little more private-sector experience might have helped these two candidates better understand the 150 million Americans employed there who rely on private insurance.
Warren and Sanders both favor heavy government involvement in energy and transportation markets, to help cut fossil-fuel use and address global warming. Buttigieg backs a more market-based approach, including a carbon tax that would raise the cost of fossil-fuel production and force industry to figure out what to do about it. Many leading economists agree with Buttigieg, because they know how powerful the profit motive is when there’s money to be made solving problems (or money lost ignoring them). Government programs tend to be far less efficient.
The biggest bang for your taxpayer dollar
Speaking of efficiency, the next president is going to have to figure out how to rein in $1 trillion annual federal deficits without slashing services or benefits, lest taxpayers revolt. Warren and Sanders favor trillions of dollars in new taxes for bigger government, even though the moderate voters who will determine the next election don’t. What centrist voters want is the smallest government able to do the job, with the lowest level of taxes needed to fund that government—the most bang for their taxpayer dollar.
Consulting firms such as McKinsey excel at efficiency. They don’t always pursue it for the right reasons, since they don’t get to determine the priorities of their paying clients. In some cases, without a doubt, companies want McKinsey to help them maximize profit or reach other goals, without regard for employees.
But it’s foolish to vilify efficiency because some organizations use it to the wrong end. If any organization needs to be more efficient, it’s the U.S. government, which will run short of funding for Medicare in 2026 and Social Security in 2034. Rising health care costs are swamping the whole country, requiring breakthrough solutions. The climate crisis might end up even more challenging, requiring moon-shot innovation.
It’s good news when Americans are willing to bring knowledge gained in the private sector to governing and apply capitalistic tools to societal problems only government can address. We need more political candidates who understand the tools of ruthless efficiency, not fewer. Maybe McKinsey could start offering internships to people planning to run for office.
Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. Confidential tip line: rickjnewman@yahoo.com. Encrypted communication available. Click here to get Rick’s stories by email.
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