eBay Republican Meg Whitman bids to save California.
May 25, 2009, Vol. 14, No. 34 • By FRED BARNES
Whitman is chronically pleasant. She's garrulous but not given to small talk (at least in my three conversations with her). She once described herself to Patricia Sellers of Fortune as "frumpy, but she delivers." Indeed she has delivered. When eBay's website crashed in 1999, was out of commission for 22 hours, and later suffered periodic outages, Whitman spent weeks at eBay 24/7, sleeping on a cot. "I was scared," she says. She feared eBay would collapse. She wound up hiring a new technology chief at better than twice her own salary. At her insistence, eBay users were offered refunds for listing fees.
The egalitarian culture at eBay grew out of the company's extraordinarily democratic, libertarian, and populist business model. It's a laissez-faire model that's wildly out of favor today in Washington. The eBay idea: Create a minimally regulated market and let the users decide what's for sale. Business permits aren't required, nor do users pay local or federal taxes. "We inspired people to start businesses," Whitman says. "Your next door neighbor has an equal chance of success as a big corporation. We made a small number of rules, we enforced those rules, and we got the heck out of the way. We kept taxes low--which were our fees--so that people could keep more of their money and grow their businesses on eBay. We didn't try to tell the market where it was going to go." One result is that 1.3 million people now make some or all of their living on eBay.
Whitman's oft-repeated example of the eBay model at work is what she calls "the car story." In 1997, Whitman was informed that 300 used automobiles were listed for sale on the website. She was completely surprised. Cars on eBay? This was unexpected, but she and her team quickly decided to open a separate section on eBay for cars. Today eBay is the largest retailer of cars in the world.
Political writers in California have been unimpressed by Whitman's entry into electoral politics. They've watched successful CEOs collapse in past statewide races. The veteran reporters at the popular Calbuzz website, Jerry Roberts and Phil Trounstine, mock her as "eMeg" and "her Megness." Whitman came off poorly in February in an interview by Michael Finnegan of the Los Angeles Times. He asked why her voter registration until 2007 was "declined to state," though she called herself "a lifelong Republican." She said she felt the CEO of eBay should appear politically neutral. She registered as a Republican to vote in the presidential primary in 2008 for Mitt Romney, her former boss and longtime friend.
Despite press skepticism, Whitman looks like the frontrunner for the Republican nomination for governor. Evidence of this comes from her chief opponent, California insurance commissioner Steve Poizner, the lone Republican currently serving in statewide elective office apart from Governor Arnold Schwarzenegger. Poizner has begun criticizing Whitman for decisions she made at eBay and for skipping a debate on the referendums in the May 19 special election. She ignores him. California is a Democratic state, yet the Republican primary a year from now matters. In 2010, Republicans will have held the governorship for 23 of the past 28 years, 84 of the past 109.
When Whitman spoke at a fundraiser for House Republican whip Eric Cantor in Richmond, Virginia, in February, she played up her experience at eBay. She turned down an offer of a limousine to take her from Washington to Richmond, by the way, and drove herself there in a rented car. "I was president and CEO of eBay for 10 years," she said. "And eBay reinforced two important Republican concepts with which I had been raised."
The first: Americans are "motivated by economic opportunity to achieve great things." By creating e-commerce, eBay "became the home of so many inspired individuals, Americans with the courage and passion to create businesses and jobs. I ran eBay with those folks in mind. We purposely kept regulation on eBay to a minimum so that small business could innovate."
The second: "Less government is simply better." Her career before eBay "had not involved me too closely with taxation, government bureaucracy, or regulation," she said. "But after years of watching government try to tax and regulate the success of eBay sellers, I left eBay with a strong belief that government's role in our lives should be limited. . . . Government can only help create the conditions for prosperity. Prosperity itself is up to each of us."