One of the most telltale signs that a company is about to blow up is when its CEO gets indignant at anyone who dares question his detail-free assertions that the numbers will work.
Alarmingly often, these CEOs are trying to cover up ugly or inconvenient details by intimidating analysts with a show of blanket confidence.
“I’ve delivered before,” these CEOs often seem to say, “so I’ll deliver again.” In other words, “stop asking me to explain myself, you puny little peon, and just take my word for it.”
CEOs who have nothing to hide, in contrast, are generally happy to explain in great detail where their confidence comes from. They won’t waste gobs of time trying to win over perma-sceptics, but they’ll certainly understand that it’s an analyst’s job to be sceptical, and they’ll share as much detail as they can.
In the second presidential debate, moderator Candy Crowley suggested that Romney’s budget numbers might not add up. His indignant response reminded me of the typical belligerent CEO whose company is headed for a fall.
Given the heroic things that Romney is claiming his budget will do — cut taxes, close loopholes, not increase the deficit, spur growth, increase military spending — it can’t be surprising to him that most Americans are sceptical.
So, what is it that gives Romney confidence that his numbers add up?
Why won’t he share some of those numbers with the public?
If Romney were a public-company CEO, the conclusion a lot of sophisticated investors would come to is, “Romney won’t share the numbers, because he knows they don’t add up.”
The clip is below. Here’s the transcript:
Candy Crowley: “…If somehow the numbers don’t add up, would you be willing to look again at a 20% (tax cut)”
Mitt Romney: “Well of course they add up. I was someone who ran businesses for 25 years and balanced the budget. I ran the Olympics and balanced the budget. I ran the state of Massachusetts as a governor … and balanced the budget all four years.”
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