By Kenneth G. Pringle

As President-elect Donald Trump draws on a business dream team of seven billionaires including the world's richest man, Tesla CEO Elon Musk, he is following a long tradition.

Since George Washington, U.S. presidents of all political stripes have trusted leaders from Wall Street and Main Street to put the nation's books in order, juice the economy or bring corporate efficiency to a lumbering bureaucracy.

"[M]ore men trained in agriculture, more technical men, more men who know business and the practices of commerce and trade" were needed, Warren G. Harding said in 1920 after being elected to lead a nation reeling from war, epidemic and recession.

Harding chose his own industrial dream team, including banker Andrew Mellon and engineer Herbert Hoover. They presided over the Roaring Twenties, the Crash of 1929, the Great Depression, the Teapot Dome Scandal -- a decade of nation-shaking highs and lows.

Their uneven performance underscores both the good and bad of putting private-sector figures in public-sector roles. It has been this way since the beginning.

"Men of this class, whether the favorites of a king or of a people, have in too many instances abused the confidence they possessed," Alexander Hamilton wrote in 1787 in the Federalist Papers, "sacrific[ing] the national tranquility to personal advantage or personal gratification."

Two years after Hamilton warned of businessmen in government, he became one. As Washington's treasury secretary, he brought shipping and financing experience -- he had founded Bank of New York in 1784 -- and envisioned the U.S. as a commercial powerhouse.

Hamilton pooled the states' obligations into the national debt, binding America together by its wallet. He raised tariffs to shield industry, sent government cutters to protect shipping, and advocated subsidies for "infant industries." It was labeled the American System.

"Today, we are indisputably the heirs to Hamilton's America," biographer Ron Chernow writes in Alexander Hamilton.

Abraham Lincoln, faced with a staggering Civil War debt in his second term, also tapped a banker, Hugh McCulloch, for treasury secretary.

"We must look to you, Mr. Secretary, for the money to pay off the soldiers," Lincoln told McCulloch on April 14, 1865, before attending with Mrs. Lincoln a performance at Ford's Theater.

McCulloch did as asked. Returning to the Treasury to finish Chester A. Arthur's term (1881-85), he found a president dismayed by the growth of corporate power.

"This is a government of the people, by the people, and for the people no longer," Arthur wrote in 1888. "It is a government of corporations, by corporations, and for corporations. How is this?"

This was America's Gilded Age, when John D. Rockefeller and other "robber barons" amassed enormous financial and political power. It was reflected in William McKinley's cabinet, with three businessmen among the eight.

One, Russell A. Alger, supposedly a distant relation of writer Horatio Alger, was himself a rags-to-riches lumber baron. His stint as secretary of war (1897-99) ended when the military was so ill-prepared for the Spanish-American War that "Algerism" became a byword for incompetence. McKinley fired him.

Mellon, Harding's pick for Treasury, personally ran an industrial empire with interconnected interests in banking, oil, steel, railroads and more. With Alcoa, he controlled the aluminum market.

Serving 11 years (1921-32) under three presidents, Mellon during the '20s was routinely cited as "the best treasurer since Hamilton." After October 1929, his easy-money policies were blamed for inflating the financial bubble, and his tight-money response for deepening the depression.

Mellon owned industrial stocks all this time, facing numerous conflict-of-interest allegations, and in 1932 articles of impeachment were brought against him. Rep. Wright Patman, D-Texas, accused him "of serving two masters -- himself and the U.S." -- and Hoover, then president, quickly shuffled Mellon off to the U.K. as ambassador.

The Teapot Dome scandal was a brazen kickback scheme in which Interior secretary Albert Fall -- part of Harding's " Ohio Gang" of cronies -- leased federal oil fields on sweetheart deals to buddies. Fall took the fall, the only person convicted, but two other cabinet members lost their jobs.

Hoover was untainted by scandal. But he was blamed for both crash and depression, and his 1928 landslide presidential victory was followed by a bigger 1932 loss.

Franklin D. Roosevelt, who defeated Hoover, could be hostile to capitalists. But he employed corporate know-how during World War II.

To run the War Production Board, he picked efficiency expert Donald Nelson of Sears Roebuck, the nation's largest retailer. And, to sell the country on rationing, he chose an advertising man, Chester B. Bowles. FDR won the war and the PR war.

John F. Kennedy, too, sought to bring corporate efficiency to the military with Secretary of Defense Robert McNamara, one of Ford Motor's " Whiz Kids." McNamara introduced policy analysis into government, but he is most remembered for Vietnam, aka " McNamara's War,"

To be sure, most businesspeople appointed to public-service roles have performed conscientiously, some with distinction. As with generals and politicians, their record is mixed.

And Harding's logic is hard to argue with.

"We must," he said in 1920, "establish a closer understanding between American government and American business so that one may serve the other and the other obey and seek co-operation,"

The question is, which obeys which.

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January 07, 2025 09:12 ET (14:12 GMT)

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