Book Review: Tevi Troy’s ‘The Power And The Money’
Jeff Bezos’s purchase of the Washington Post in 2013 may not have been his best business acquisition, but it still arguably rates among his best acquisitions. Precisely due to Amazon’s stupendous growth borne of a remarkable business that much of the world can’t live without, the purchase of Washington, D.C.’s most important newspaper signaled a degree of protection from the antitrust ankle-biters in Washington.
Was protection from the DOJ what informed the acquisition? There’s no way of knowing. Motives aside, the political class tends to attack the businesses most beloved by consumers. Since they do, and since Amazon is nothing if not beloved, Bezos’s buy was very wise; one that probably more than a few other brilliant business minds wished they’d completed themselves.
All of the above and more came to mind while reading presidential historian Tevi Troy’s new book, The Power and the Money: The Epic Clashes Between Commanders In Chief and Titans of Industry. More than once in the book, Troy cites a meeting between Facebook founder Mark Zuckerberg and Zuckerberg’s idol, Microsoft co-founder Bill Gates. Gates told a still green-to-Washington’s ways Zuckerberg to “Get an office there, now.”
Gates learned his admonition to Zuckerberg the hard way via the Clinton Department of Justice (DOJ). Even though the consumer welfare standard is said to inform modern antitrust theory such that Microsoft shouldn’t have had the DOJ on its back (Troy notes that as late as 2002, Microsoft could claim 94% of the internet browser market thanks to Internet Explorer) as is, consumer passion for Microsoft’s products was paradoxically (but not surprisingly) what had Microsoft in hot water with the federal government in the first place. Antitrust types hate the innovators with a passion, and the DOJ’s Joel Klein wanted Microsoft to cease bundling Internet Explorer with its software. Which was like telling 1960s antitrust target General Motors to leave the engines out of its cars. Gates was obviously none too pleased. Troy cites a question asked in aggravation by Gates about whether or not Microsoft would be “allowed to continue to innovate in products, and in Windows itself.”
So, while the DOJ never succeeded in actually breaking Microsoft up, it did succeed in distracting the giant all the while playing a role in driving Gates away from his creation. Not surprisingly, Microsoft largely flat-lined in the valuation sense (it was in 2015 that the company’s shares finally awoke from a thirteen-year slumber) after Gates retired as CEO in 2000, evidence that the DOJ’s attacks were anti-consumer and anti-shareholder alike. Which is, or at least should be, a statement of the obvious. Antitrust is so backwards, and so defeating for all concerned, consumers most of all.
The main thing is that Gates learned about the dangers of not having a Washington, D.C. presence, only to pass his wisdom on to Zuckerberg. The speculation here is that something similar was conveyed to Bezos.
Troy’s book is a very interesting look at business giants past and present, and their relations with Washington, presidents in particular. There are surely holes in the story (JFK’s most famous battle was with Big Steel, but it never makes it in other than with a quote that alludes to the battle, nor does United States vs. General Motors), but there’s much interesting information to be had in The Power and the Money, and glorious quotes that will make it into my own opinion pieces for a very long time.
In Troy’s case, he’s properly not reveling in the clashes between business and government as much as he’s acknowledging that they’re a fact of life. In Troy’s words, “if a large company wants to survive and thrive, it must have a strategy for dealing with an increasingly powerful and interventionist federal government.” So true, and so sad, but to gnash one’s teeth about the need for a Washington presence is like yelling at the scoreboard. Where there’s wealth there will be politicians trying to get the wealth, or demagogue the wealth in order to get it, which means businesses must have a Washington strategy.
Troy indicates that a Washington strategy has modern qualities whereby the modern CEO faces “a concomitant increase in the need to engage with Washington’s cultural, financial, and political realities,” but as his book indicates, the need has always been there. Going back to the era of John D. Rockefeller, Troy makes the crucial point that Rockefeller’s genius work in making kerosene (lighting) and gasoline common goods “unwittingly enabled the unifying technologies that made him a national villain.” A “national villain” is hard to countenance (how many Americans actually read Ida Tarbell et al?), but what made him a target for Washington (and governments in general) was his success. Meeting and leading the needs of consumers the sad path to Washington trouble.
In the case of Rockefeller’s Standard Oil, it wasn’t just Washington that was the problem. Albany loomed large too since Theodore Roosevelt was governor of New York. Troy indicates that Standard executives worked diligently to get Roosevelt on William McKinley’s ticket as VP in order to bury a difficult politician. Except that McKinley’s subsequent assassination meant the problem they’d pushed out of New York was suddenly President of the United States. Don’t worry, things got worse.
The voracious reader in Roosevelt took to Tarbell’s series of hit pieces on Rockefeller, so much so that Troy reports he “even sent her a fan letter.” Roosevelt’s not infrequently wrongheaded passions led to a Bureau of Corporations bill that would look into “monopolistic corporate practices.” He was on the warpath, at which point Standard aimed to quiet him with a $100,000 campaign donation for his own presidential bid. In response, Roosevelt sent a letter refusing the money. Except that the money had already been spent. A problem? Not so fast. Roosevelt was a politician, and as a politician he correctly deduced that “the letter will look well on the record” regardless of what had been done by his campaign with someone else’s money. Politics is so dishonest, so ugly. But to lament what is natural is to yell once again at the scoreboard.
In the end, the individual whom Standard Oil had banished to the invisible position of Vice President became quite the thorn for the oil company. Troy quotes Standard executive Henry C. Frick acidly commenting about Roosevelt that “We bought the son of a bitch, but he wouldn’t stay bought.”
Moving to Henry Ford, he wisely and correctly viewed war as “murder, desolation and destruction.” And contra economists who believe near monolithically that war is economically stimulative (a more incorrect and horrifying belief would be hard to find), Ford saw this truth up close.
It’s not just that governments only have the means to conduct wars insofar as they have taxable access to production (something lost on nearly all economists on the matter of war, but also with regard to government spending in general), it’s that they must commandeer crucial industrial assets in order to come up with the armaments meant to kill, maim, and otherwise destroy wealth. In Ford’s case, and during WWI in particular, Troy quotes Ford as saying that “From April 1917 until November 1918, our factory worked practically exclusively for our government.”
Moving to the 1930s and FDR’s misguided, and logically failed war against economic sluggishness, Ford makes an appearance yet again owing to his disdain for FDR’s “complicated and impractical” National Industrial Recovery Act. The latter included what Troy describes as “a code of conduct for the auto industry, compliance with which would earn recipients a ‘blue eagle’ symbol.” That, dear reader, is true fascism, as was Woodrow Wilson’s commandeering of Ford’s production capacity in 1917 and 1918. Which is hopefully a reminder that in 2024 fascism like inflation, is a catch-all pejorative that its users don’t really understand the meaning of.
Once World War II came around, the pacifist in Ford found his business dragged into what he disdained yet again. Troy notes that Ford’s Willow Run facility employed 35,000 people producing 9,000 B-24 Liberators, yet Ford remained Ford. Troy writes that the automaker “increasingly wanted what government and presidents were no longer willing to give: to be left alone.” Amen to that.
Arguably the most famous struggle between business and government took place during Richard Nixon’s presidency. Nixon and his people weren’t hot to fit in with the rather social (Katherine Graham) owner of the Washington Post. When H.R. Haldeman was asked to come to a lunch at the prominent newspaper, he replied with “We don’t accept lunches at the Washington Post.” Did the hostility between Administration and newspaper come back to haunt Nixon? It’s not unreasonable to speculate yes, but there lies an occasional problem with Troy’s book in general, or perhaps a feature of it. No president, businessman or business is approached in what some would refer to as “deep dive” fashion. It’s quick, one or two page bites of really interesting history. But since the dives aren’t deep, it’s more up to the reader to speculate, or pick and choose the subjects worth knowing more about.
All of which speaks to a disservice perhaps done to Troy by the individual who titled his book. Consider the subtitle: The Epic Clashes Between Commanders In Chief and Titans of Industry. As entertaining as the The Power and the Money is, it’s not what its subtitle suggests it is. As opposed to a book full of thick chapters about “epic struggles” between business and government, most of the book is once again short, fun and highly interesting anecdotes about businessmen and their political dealings. Which recommends the book on its own. The problem for this reviewer, at least at first, was the expectation of titanic battles that decidedly do not describe the book.
All that having been said, that it’s not what the subtitle suggests does not recommend against The Power and the Money. There’s so much that’s interesting and useful within.
When Bill Clinton claimed he’d shot an 80 after a round of golf with Jack Nicklaus, Nicklaus quipped “eighty with fifty floating mulligans.” Ok, Clinton may not have been an honest golfer, or an even an honest person (which politician is?), but Troy quotes film industry giant Lew Wasserman as saying that “if you get me going on the subject of Bill Clinton, I’ll sound like a love-struck teenager.” In other words, Clinton was great at what matters a great deal in politics: politics.
After persistent bashing of banks and bankers by Barack Obama, the lifelong Democrat in Jamie Dimon started to push back. As he said directly to Obama, “President Lincoln could have denigrated all southerners. He didn’t.” Troy adds that by 2012, the frustrated with Obama and Democrats Dimon described himself as “barely a Democrat.”
By the time Donald Trump was in office, Dimon was increasingly willing to work with and inform both sides. He did this despite expressions of frustration from his own employees. Dimon’s expressed view was that “I would try to help any president of the United States because I’m a patriot.” Apple’s Tim Cook comported himself somewhat similarly. Unhappy as his employees were with Trump, it’s apparent Cook recognized that he had shareholders to please too. He would make himself available to Trump as a result. In Trump’s words, “Tim Cook calls Donald Trump directly.”
To all this, the alleged purists will stomp their feet about cronyism and other negatives. Oh well, would it that government were so small and non-interventionists that business types never spent any time in Washington. It would be great, if so. But also not realistic. Say it over and over again, so long as there’s wealth there will be politicians trying to demagogue it. As a consequence, Washington is part of business life.
Troy, to his credit once again, laments the above truth. Same here. At the same time, to lament is not to yell at the scoreboard. Troy doesn’t yell.
Just the same time, there’s a case for optimism within Troy’s own lament. Notable about this is that in the book’s Introduction, Troy writes of how “The whole tangle of rules and regulations can benefit corporations, which can afford to pay” their way around major compliance-related expenses that “flummox small and upcoming businesses.” It’s true, it’s often said by right and left (Gabriel Koko, quoted by Troy) that regulations are designed by businesses to keep the smaller ones down, but reality invariably intrudes in a happy way. And it does for obvious reasons: the dominant businesses of tomorrow are almost invariably a surprise, and precisely because they’re a surprise they’re too small and too irrelevant for federal, state or local governments to regulate.
Looking back to 2000, GE was the world’s most valuable company, Enron was the world’s smartest company, Tyco was the next GE, AOL and Yahoo were the most dominant faces of the internet, etc. In that same year Facebook didn’t yet exist (Mark Zuckerberg was in high school), Amazon was Amazon.org since it couldn’t operate profitably, Apple was struggling out of near bankruptcy, Nvidia was constantly flirting with bankruptcy, etc. Which is just a way of saying that while Troy is correct about the intent of big business to suffocate smaller competition with rules crafted in Washington, the happy news is that the giants have shown time after time that they can’t see the future.
All of which brings us to one final notable critique of the author. About it, it may not even be a critique of the author. Instead, it’s a critique or lament on the matter of where book publishing is going.
While more books than ever are published today, it’s no reach to suggest that there are fewer editors than ever. And it shows. Troy’s book has more than a few editing errors. On p. 26, and in a passage about Ohio senator Joseph Foraker, Troy suddenly mentions “Garfield adviser Amos Townsend.” It’s easy to assume he was talking about an adviser to President James A. Garfield, but it’s just a guess. On the next page we read that “Rockefeller saw him [William Howard Taft] as more palatable than Bryant.” The assumption here is that Troy meant Bryan for William Jennings Bryan, but still. On p. 46, it’s Britton “Brit” Haddon in one paragraph, then Hadden in the next paragraph and thereafter. On p. 139 “[Jack] Valenti knew about Reagan’s long-standing, albeit interrupted, friendship with Reagan.”
There’s a few more errors like the above in the book, and they signal a problem that’s not going away. Or maybe this is where AI will step in? In my case, and the publisher won’t be named here, with one of my own books the editor sent back “readbacks” of each chapter. I very specifically sent back crucial additions, subtractions, clarifications, along with requests to add passages and footnotes deleted by the editor. These were in my mind crucial to the book, so much so that I checked with the publisher and editor numerous times subsequently about whether the changes had been made. Each time I was assured they had been, only for the physical books to arrive months later. None of the changes had been made. It was devastating.
The bet here is that Troy saw the errors that I saw, and requested fixes pre-publication. They weren’t made, and it’s unfortunate.
At the same time, what’s unfortunate about editing and the subtitle doesn’t recommend against Troy’s book. It’s very interesting, entertaining, and will be used as a reference by this reviewer for a very long time.
