Which MBA?

Feb 17th 2012, 16:10 by J.L.H.D | ATLANTA

THE President is deeply suspicious of business: one longtime friend observes that he “did not consider successful businessmen as the best brains or the most enjoyable company ... and ... did not like to have them around in the evening”. He attacked his predecessor for being too friendly to established business interests, risking America’s economic performance in the process. Later, forced into a confrontation with his opponents, he failed to appreciate that the negotiator across the table was determined not to give in and that compromise would be impossible. 

While this might fit Barack Obama, it actually applies to John F. Kennedy facing down U.S. Steel in the spring of 1962, as recently recounted by James Hoopes, a business historian at Babson College. (His most recent book examines the interplay of government and corporations since the 1930s.) Kennedy feared inflation; Roger Blough, then the president of U.S. Steel, wanted to implement a price increase of $6 per ton to make up for previous wage gains. Thus when the United Steelworkers union's contract expired, Kennedy personally intervened to conduct negotiations.

In effect, Blough got the government to do his labour negotiating for him. United Steelworkers agreed to a smaller pay rise, at Kennedy’s urging, but Blough waited until negotiations were over and then announced the price increase. Kennedy’s furious reaction included setting the FBI in pursuit of a potential antitrust violation. Eventually U.S. Steel, amid much bad publicity, withdrew the price increase.

A rousing victory for Kennedy, then? No, Mr Hoopes says: the president had done all he could do, and made no objection when steel prices started creeping up again. He had picked a fruitless fight, and put himself at a further disadvantage by failing to understand his opponent. Kennedy argued that U.S. Steel should refrain from further profit for the good of the nation; Blough firmly believed that as U.S. Steel prospered, so would America.

Memory is a tricky thing. A half-century on, the Kennedy administration is remembered through the gauze of “Camelot,” but at the time executives were comparing him, unfavourably, with his Russian counterparts. As little as many business leaders might think of Mr Obama and his policies, at least the FBI is not involved.