So Harvey Pitt decided not to tell other members of the Securities and Exchange
Commission a small detail about the man he had chosen to head a crucial new accounting
oversight board, after turning his back on a far more qualified candidate. William
Webster, reports Stephen Labaton of The Times, headed the audit committee at U.S.
Technologies. Now that company is being sued by investors who claim that management
defrauded them of millions.
And what did Mr. Webster's committee do after an outside auditor raised concerns
about the company's financial controls? That's right: It fired the auditor.
Mr. Pitt's response when this story broke beats anything a satirist could
have imagined. "Pitt seeks probe of himself," read one headline. Honest: Mr. Pitt's
own agency will investigate how he chose Mr. Webster.
Meanwhile, what was Mr. Webster thinking? Nobody thinks he's corrupt; but
having failed so spectacularly to police executives at a single, small company,
how could he imagine himself qualified to enforce honest accounting for all of
Yet it's no accident that Mr. Pitt picked the wrong man. Mr. Webster was chosen
over better candidates precisely because accounting industry lobbyists — a group
that clearly still includes Mr. Pitt — believed he would be ineffectual.
Let's call it the Pitt Principle. The famous Peter Principle said that managers
fail because they rise to their level of incompetence. The Pitt Principle tells
us that sometimes incompetence is exactly what the people in charge want.
In this particular case, ordinary investors demanded a crackdown on corporate
malfeasance — and Mr. Pitt pretended to comply. But this administration is run
by and for people who have profited handsomely from their insider connections.
(Remember Harken and Halliburton? And why
won't the administration come clean about that energy task force?) So he picked
someone with an impressive but irrelevant background, whom he could count on not
to get the job done.
This principle explains a lot. For example, the Treasury secretary's job is
to pursue sound fiscal and economic policies. So if you don't want that job done,
you appoint a prominent manufacturing executive with little understanding either
of federal budgets or of macroeconomics. He'll be just the man to preside over
a lightning-fast transition from record budget surpluses to huge deficits. He'll
even cheerily declare that "the latest indicators look good" just days before
consumer confidence plunges to a nine-year low.
The attorney general's job is to uphold the Constitution and enforce the rule
of law. So if you don't want that job done, you pick a former senator who doesn't
have much respect either for the law or for the Constitution — particularly silly
stuff about due process, separation of church and state, and all that. He'll be
just the man to respond to a national crisis by imprisoning more than 1,000 people
without charges, while catching not a single person who has committed an act of
terrorism — not even the anthrax mailer.
The same principle can be applied at lower levels. Intelligence and defense
experts should realistically assess threats to national security, and the consequences
of U.S. military action. So if you don't want that job done, you place it in the
hands of prominent neoconservative intellectuals, with no real-world experience.
They can be counted on to perceive terrorist links where the C.I.A. says they
don't exist, and to offer blithe assurances about fighting a war in a densely
populated urban area when the military itself is very nervous.
But the most important application of the Pitt Principle comes at the top.
The president's job is to unify the nation, and lead it through difficult times.
If you don't want that job done, you appoint an affable fellow from a famous family
who has led a charmed business and political life thanks to his insider advantage.
He'll be the kind of guy who sees nothing wrong in seeking partisan advantage
from a national crisis, even going so far as to declare that members of the other
party don't care about the nation's security.
That way, a great surge of national unity and good feeling can be converted,
in little more than a year, into a growing sense of dismay, with more and more
Americans saying that the country is going in the wrong direction.
Copyright The New York Times Company