At my interview with former U.N. Ambassador Bolton, initially considered for Secretary of State and now National Security Advisor for President-elect Donald Trump’s cabinet, I asked him to share insights into geopolitics, labor unions, media, United Nations, and the boardroom.
President George W. Bush appointed John R. Bolton the 25th U.S. Ambassador to the United Nations in 2005. Now a fellow at the American Enterprise Institute, where he focuses on foreign policy, Bolton also serves as a director of EMS Technology and Diamond Offshore Drilling. The experienced litigator was described by The Washington Post as skilled in the art of “bare-knuckle diplomacy and skepticism.”
You are an Ivy League trained lawyer and geopolitical thought leader. What part of your background was most important to your career success?
The Boltons were a blue-collar family, and our virtue was modesty. My father was a firefighter and my mother was a housewife. I was the first person in my family to go to college. Those would have to be among my proudest credentials.
You are a natural contrarian. Even during your Yale years, you were pro-Vietnam War.
I read Karl Marx’sCommunist Manifesto, and the effect was to push me into the conservative camp, more accurately libertarian, and I became involved in the Barry Goldwater campaign in 1964 as a result. [note: former U.S Secretary of State Hillary Clinton also campaigned for Goldwater.] This course led me to my beliefs, contrarian as they were then, when I arrived at Yale.
How well informed is the Washington media circuit?
If you like to arrive at a conclusion about complex matters using facts and logic, there is going to be frustration in working with the media in Washington. As a group, Capitol Hill reporters look at everything through a political lens. For instance, when they saw something as portentous as the outcome of the Supreme Court’s Obamacare decision, they largely ignored the huge implication for our Constitution, and mainly focused on a very superficial political analysis of the decision. And I think that’s very unfortunate.
Speaking of the confluence of politics and business, what do you make of the Keystone pipeline issue?
Given a genuine opportunity to understand the real facts behind Keystone, most voters would be in favor. In the last century, the Progressive movement recognized that the world was becoming more complex, but their remedy was to look to government for answers. In fact, it’s the exact opposite. When we rely entirely on government to establish the actual facts of the matter, the result is often what certain constituents desire whether or not they are to the benefit or detriment of society at large.
Which party has the better rhetorical arugment?
Simply put, fairness, equality and justice resonate today, even more than abstract questions of liberty and individual freedom and responsibility. Some of this is a reflection of economic circumstances, while some of it could be chalked up to the aging American demographic. If one party frames issues in a way that plays to these desires, I think that almost invariably makes a stronger political statement. And that’s why I think this election was consequential.
The world is forever in crisis. Is the United Nations the most effective means of dealing with global policy issues?
I could say many great things about the United Nations. There are less-known aspects that are very important and very helpful internationally, but they tend to be the obscure, specialized agencies of the U.N. system — the universal postal union, the international maritime organization and other organizations that are largely behind the scenes. There are some others that I think are helpful in a humanitarian sense — the High Commissioner for Refugees and the World Food Program. But some of the political decision-making bodies, such as the Security Council and the Human Rights Council, for instance, are just hopelessly ineffective because of their politicization. It’s nearly impossible to accomplish anything through those bodies.
What is the major flaw in the way Americans handle geopolitics?
There is a well-known but unfortunate temptation — whether it’s for the State Department or even in American multinational business dealings — that when working with international counterparts you look at the guy on the other side of the table and say, “Well, I’m a rational, reasonable person and I think that guy is too,” when in fact he might be just the opposite. It’s a fallacy we call “mirror imaging,” and frankly we are guilty of this time and time again.
Turning our attention to regulation are you concerned about overreach?
Regulation creep is something that is taking over business behavior, and it’s certainly become worse with Dodd-Frank under the Obama administration, but I think it extends back to Sarbanes- Oxley. It’s very hard these days for small and midsize companies to be public or to go public. Then you’ve got the EPA just about out of control in the recent dust-up in which a regional director was videotaped saying, “We should do what the Romans did and crucify the oil companies.” What the Obama administration and others fail to realize is not just the effect of each regulation but the cumulative crushing burden.
What about the influence of politics?
The most isolationist constituency in America today is the labor unions. They’re the ones most against free trade. They’re the ones most in favor of tilting regulatory and tax structures to create disincentives for American companies to engage in international business. They have enormous political clout — you can see it in case after case that is brought before the National Labor Relations Board.
What should business be doing to improve its reputation?
In the political process, the landscape is already littered with a bias that business is a big conspiracy of a few wealthy individuals against the great majority. So I think it’s important that companies are equally prepared to participate in the political process.
Many activists decry executive compensation. Do you agree?
Compensation committees of boards have perhaps the most difficult job of all because they’ve got to weigh so many competing factors. They’ve got to make sure that their compensation is sufficient to reward the CEO and the other top officers and make sure they’re not poached by a competitor. But explaining those factors in a very direct and quantitative way in terms of the company’s performance can be difficult. I have watched compensation committees repeatedly struggle to make these decisions, yet they are portrayed often by activists as back-scratching colleagues who are not paying attention to shareholders. In my experience, that’s the furthest thing from the truth.
Does business have to be more balanced in how it looks at risk?
Risk and return are two sides of the same coin, and if boards are adequately overseeing management, they’re worried about their risks, and they’re worried about missed opportunities, too. When companies fail badly, you can say that a board has not carried through on its responsibilities, but by the same token there are companies that are over cautious, with the consequence they can get left behind, and that’s the nature of capitalism.