Category: Politics

  • The Corporate Sky-box Administration – March 2003

    Interpreting the actions of this administration requires an understand of two conditions:

    1) Bush was elected by big corporation interests and the country is being run for their benefit.

    2) Bush has no interest other than politics and his decisions, when not a response to his corporate sponsors, are always political.

    Bush showed a bit of independent activism in his first eight months, then came the war. The only outside interest shown since 9/11 was when the Enron revelations threatened his sponsoring corporate chieftains. Enron demonstrated how the management of many publicly held companies had become corrupted by an orgy of bonuses and options. Corporate heads needed to cut short the resulting reform movement. They awakened Bush from his war fixation and distaste for new proposals. He announced support for, first a limited restriction on the ability to cash in shares received in 401K plans, and, second, against a plan to penalize management that makes off with huge option awards only to see their stock crash. Bush’s efforts are an attempt to limit reform to something his mentors can swallow, although they have already reneged on the company stock holding time limitation. The Enron situation has the potential to correct the accounting problem and the excessive option awards that led to the cheating. Bush is trying to short circuit reform by putting soft proposals on the table.

    Next came tariffs on steel. This issue has been around for a long time. No president, not even Reagan, did anything because the dumping charges are empty. The war allowed the steel industry to place itself in the position of a needed national interest. The modern portion of our steel industry, so-called mini-mills using largely scrap, have been expanding year after year, and the efficient ones are profitable. Tariffs are terrible economic policy and worse for international relations. The whole structure of world trade, the foundation of a world of understanding interaction, has been undermined. Why did he do it? The only possible answer, other than responding to corporate sponsors, is politics – a hope of buying union votes. The champion of free trade suddenly turned to tariffs, at another loss of credibility and deepening distrust abroad.

    The decision was typically pragmatic relative to his corporate sponsors. It was blatantly protectionist, and a setback for both free trade and foreign relations, but it met the urging of his backers. The movement to foreign factories, or just buying from foreign sources, has been further encouraged. Steel users are far more important to our economy than the industry itself, but they failed to mount a strong counterattack. The key issue, though, appears to be politics, the hope of picking up votes in steel making states.

    We could see more tariffs, as Bush has revealed his willingness to sell out free market principles for votesf. Foreign competitive pressures are growing in many American industries, and Bush responds to the requests of his corporate buddies. Normally a president trying to lead an international war would avoid moves that harm allies and cast us in the worst possible light (remember the ABM treaty, unnecessarily given up for an anti-missile research program that was going to be worked on regardless).

    Other than intervening to help his sponsors, since 9/11 Bush has been interested only in sounding off with tough guy bully talk, building the worst foreign relations in American history, if a strangely based popularity in his own country. His talent for cheerleadering, first seen at Andover, is being applied on a national scale. In the meantime, he has nothing to offer, no recession fighting plan, no domestic anti-terrorist program, no oil dependency program, no nothing, just as would be expected of a far righter who thinks government, other than defense, is bad. A normal president would have seen recession fighting as his job, but Bush used it only for political advantage. He is so detached from anything other than his little war that he seems to be wound up daily by his handler, Karen Hughes, and sent out like a toy soldier to make ha daily speech, saying nothing except how brave we are, what cowards everyone else is, and what a great leader he is. At first it was the same speech, now he has about three variations. This man started running for reelection the day after inauguration and the pace picked up once he had an issue as a guide. Anyone getting in the way is termed unpatriotic.

    Bush became a popular hero because of the war, but the image is built on a strange foundation. His transformation from a smirking, shallow man interested only in helping his rich friends and big corporations into a great wartime leader is based on his single minded purpose in defeating terrorism. Now his lack of knowledge and interest in affairs of state, his child-like attitudes toward difficulties, his very simplicity, comes in handy. Bush seems resolute and engaged because of his extraordinarily narrow attention span. The focus on getting the evil doers is cast as great leadership, the empty braggadocio as inspiring. The almost daily round of flag waving speeches goes smoothly because he has the three variations down pat. The goofy-friendly manner is most unpresidential, but seems to make him liked. Reagan was a bit that way and got away with his cowboy act, but on him it seemed sincere, and he expressed himself in an intelligent witty manner. Bush overdoes the cornpone and nothing intelligent ever leaves his lips. The war made Bush seem more knowledgeable, but whenever caught in an unprepared situation, he comes across as dumb as ever. His lack of curiosity and thoughtfulness is covered up by flag waving. His handlers won’t let him near an open press conference because extemporaneously his still comes across as uninformed and bumbling. It isn’t the messed up grammar, it is what he says. What appears to be purposeful is a narrow minded inability to think about consequences. Though he is currently viewed as unbeatablke for re-election, the American people can’t continue to fall for this act, they are not that dumb.

    It is important to remember that his popularity is based on the war, but this was never was a real war. How can the most powerful nation on earth fight a war against maybe 10,000 semi-beggars spread out over thousands of miles. Afghanistan did give us the sole concentration and the leader, but we bungled the job (while the generals and the administration have been strutting about their great victory). We popped off a lot of toys, but the only accomplishment was to driver the hidden enemy more underground and probably increase his numbers. in the worldThe phony war is not going nearly as well as we are told. Everyone but the generals knew bin Laden and most of his followers would get out through Pakistan and might have been cut off (apparently we overestimated them and failed to consider they would move on to fight another day). The U.S. has never shown much flanking ability (good in Iraq and Inchon, otherwise almost always straight frontal assault).

    From a post Afghanistan point of view, the impossibility of invading other countries is becoming clearer. Now Bush is stuck with a phony over-propagandized war and no place to go. The weird combination of bombast, bombs, and stupidity leaves us not trusted by the rest of the world. Foreigners see Bush as a combination bully-idiot-kid with a lot of scary toys to play with.

    Bush has to keep going because of the initial failure and the promise of a long war, but mainly because of politics. Despite the propaganda from the White House and the Pentagon, fighting a phantom enemy will inevitably degenerate into ineffective flailing. Since he needs to keep the war going at all costs for political purposes, it has been expanded to a war against “weapons of mass destruction”. Iraq is the target, for lack of a terrorist one, but the rest of the world recognizes that Iraq has little relationship to terrorism and they are offended at aggressively invading any sovereign nation. They have seen this before, from the Romans, to Napoleon, to Hitler. As a result, Bush has failed to land Turkey as his mercenary ally and staging base. Apparently the right wing saw Turkey as buyable in exchange for Iraq’s oil fields, but Iraq means Kurds and the Turks already have a serious internal problem with their own Kurds. They disappointed Bush in saying no. Europe has turned him down. It looks as if we have to put in our own troops, but there is no chance of the kind of strong coalition of 1990-91. Then we were repelling the aggressor, now we are the aggressor. Europe has long memories of aggressors. Neighboring countries have refused to serve as staging areas. Renewed fighting in Afghanistan is a great break, as would be another terrorist attack (for him politically). Politically he has to go for Iraq as the only alternative in maintaining his popularity, and enough foreign nations will be dragged along to cover up, at least in this country, the resulting bitterness against us. But the move against Iraq would probably harm the war against terrorism by being distracting and building hatred against us.

    Among the many dumb decisions resulting from these policies is the proposed increased in the defense budget. Bush used the “war” to try and foist off a major increase in defense expenditures. The circumstances of this war make it clear that heavy weapons are a thing of the past. The only conclusion I can draw is that the warmongers want to take in China, probably because they are a growing economic threat. But the lack of need for the new heavy equipment is going to make for a hard fight in congress. You don’t need big weapons to fight a small guerrilla war.

    Bush has missed his period of great popularity to get through needed programs, of which internal defense against terrorism and a long term oil program are merely the most obvious. The reason is that he totally lacks genuine leadership, he ever avoids it because he has no understanding of the problems and holds the right wing position that governmental action is always negative. Bush showed once again that he has no interest in the general good, but will respond to special corporate interests.

    Certainly Bush has political talent, probably because that is his only interest, but his utter lack of engagement in national policy has led to a failure to use his popularity. The he internal defense program against terrorism is wallowing in ridiculous militia carrying unloaded rifles in airports and color coding. There is no program of any sort, like cleaning up the mess in the immigration agency, or tightening borders, or planning for another Oklahoma City like bombing (a more likely next step rather rather a jetliner bomb). 9/11 made clear that we must eliminate dependence on Moslem oil. Bush could get Alaska approved for his oil buddies, but it has to be part of a long term program to eliminate middle east oil through alternative means. Instead, Bush pushes the oil company line and pretends that Alaska would make us self-sufficient. Since the oil buddies do not want a plan for seriously cutting oil usage, we are unlikely to hear anything from Bush, though the need is so obvious perhaps even he will get the message.

    Thoughtless policy and an ineffective war have to be covered up. The means are flag waving, propaganda, and a blanket of non-information. This is the most secretive administration in history. What have they got to hide? Why is so little being discussed about the cause of Moslem hatred and how to meet it? Instead, Bush strikes out like a spoiled kid and makes the problem worse. We are sending terrorists under cover, but the resentments that brought on terrorism are growing deeper and more widespread. You can’t bomb this kind of fervor away, it must be dealt with intelligently.

    We are fighting a guerrilla war and guerrilla wars are always embarrassing for the ruler-invader. Guerrilla wars are about harassing the bully boy. The Bushies can’t see that it is this is the kind of war. Smash ’em with overwhelming power has always failed in guerrilla wars. We must deal with the underlying problems, for our present policy will only create more guerrillas. The battles go to the invader, the war goes to the home team. We played the invader with overwhelming force once before, and lost that one. We won’t lose this one on the battlefield, but we are likely to lose by increasing hatred the point where terrorism becomes a greater threat. Bush can get all the support he needs against terrorism, but when it comes to invading countries just because we don’t like then ,it is another matter. There is little evidence he understands the distinction. The war on terrorism isn’t a big weapon war. It takes intelligence and working with the home country. The threats and stupid diplomatic moves harm the effort.

    The manifestation of the corporate culture in the administration is a don’t give a damn attitude about anyone else. Arrogance was always Bush’s worst problem. You can see this same quality in Ashcroft and Rumsfeld. The right is pillaging Powell because he talks reason and is not sufficiently macho. The results are bad tax policy and hopeless foreign policy. Bush is ruled by hard line right wingers who are dogmatic in doing things their way and to hell with the cost. His skill is in appearing to be a non-dogmatic good guy, but the actions say otherwise.

  • An American Aristocracy? – March 2003

    In trying to figure out why George W. Bush bothers me so, I may have found the answer in the book, Founding Brothers. Adams and Jefferson had years of correspondence after retirement and in discussing the differences between the U.S. and Europe they got into an argument over aristocracy. Both believed that superior people must provide leadership, but Adams leaned toward the idea that ability was inherited and Jefferson thought the cream would rise to the top in a free society regardless of inheritance. Of course, Jefferson’s view is the heart of democracy and it made this country, but in their day the ability of a common man to rise from nothing had not yet been demonstrated.

    The Virginians, especially Washington, Jefferson and Madison, were of the landed aristocracy, if not so much by inheritance as by force of personality and rich wives. Washington appears to have taken on imperial airs as president, but his deeply felt sense of justice and common sense made him a true democrat. Ironic that the Boston (Adams) view is pro-aristocracy, but it makes sense: Adams was the only founding father with a son, who later became president. Both Adams’ were among the least successful presidents (both were one termers).

    My discomfort with Bush arises out of experiences in school with those I call “WASP elites”. Some elites were smart and had a lot on the ball, but their attitude of entitlement made them ill-equipped to govern in a democracy. My partiality does not eliminate everyone. Jim Baker, a Princeton classmate, was definitely a WASP elite, Texas version. Baker, though, is different. I don’t know how he got into running campaigns, but as I recall he first emerged running Ford’s reelection, then Bush’s run in 1980. Both were defeats, Bush’s leaving his supporters with an empty feeling. He acquired the designation “wimp” out of that campaign. Despite these failures, Baker so impressed his rivals that he was invited to run Reagan’s campaign. Then as part of a triumvirate in the White House chief of staff position, he rose to the sole post, even though the other two were Reagan cronies. He then maneuvered himself out of the White House into Secretary of the Treasury in the second term, ran Bush’s successful campaign, then got State. Bush’s wife blames the second term loss on him for not taking charge of the campaign from the beginning, indirectly a huge compliment to Baker. Then Baker masterminded the stealing of the 2000 election for his old friend’s son. This is a wildly successful man whose proven ability easily overrides my objection to WASP elites.

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    So, what is the difference with Dubya? It starts, appropriately, with father. He earned the wimp label, despite flying off aircraft carriers, phi beta kappa, success in business, and an amazingly varied career of important appointments. When he got the leadership of the country he came across as a nice guy, but weak. His great triumph, the Iraq War, turned to nothing by an unwillingness to follow through and throw out the most oppressive dictator in the world outside Africa. I still recall discovering with amazement during my St. Paul’s reunion in 1993 that a majority of my class had voted for Clinton (more class members went to Yale than any other college, as well). They had a kinship with Bush and he didn’t come across as a winner, so they voted against him.

    Now we get sonny boy, unlike his father a man of no accomplishment (if you can say that of someone winning the biggest prize in the world) and who indeed appears dumb. Partly it is father. If father didn’t have it, why should son, who seems a man of much less ability and certainly much less experience. Son is a better politician and a forceful schmoozer, but can you make a presidency on those talents?

    After reading the book, my feeling developed around the Jefferson/Adams exchange over aristocracy. The trouble with Europe and the rest of the world, the reason we ended up on top, is that we don’t have aristocrats and are led by men who rise on the basis of merit. There is no inherited station in this country. Yes, there is inherited wealth and Rockefellers and Kennedys did become successful political leaders, but they are the exception and the Kennedys would not be considered aristocrats. Money undoubtedly did it for them and money does talk in this country, but these families produced outstanding individuals. Aristocrats in the old world originally earned position through ability, but after generations passed and the successors retained position without ability, aristocrats dragged down those countries.

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    In Dubya I think we have an aristocrat who didn’t in any way earn his position. He got there purely and simply because of his father. Papa had a senator father, who was apparently a very forceful figure, but Bush Sr. did make it on his own. His route to the presidency was a strange one: almost 20 years of appointed positions of stature (first envoy to China, UN envoy, head of the CIA, vice president), in none of which he made much of an impression. If his resume is strange in the variety of appointed positions, it is still remarkable. Dubya, on the other hand, would probably have been a total loss without father: no Yale, no Harvard Business School, no Texas Rangers, no governorship, no presidency. He is just another good time Charlie, probably a broker in the Houston office of a Wall Street firm. And that, I think, is what bothers me about W. We don’t want sons of aristocrats as our presidents. It is a sign of a weakening nation.

    On the subject of aristocracy, Adams names five pillars: beauty, wealth, birth, genius, and virtues. To me W qualifies only on birth. These qualities may provide a clue to the visceral hatred of Clinton. The president by his very position becomes an aristocrat. In Clinton’s case, he wins on beauty and genius, perhaps the two qualities most likely to provoke jealousy. He failed on wealth, birth and virtue, which led to an almost pathological hatred among those who consider themselves aristocrats. They could not accept such a man as one of them. Since he was an impostor, they felt justified in sleezy maneuvers to bring him down.

    The sense of entitlement among American aristocrats may actually have won the election for Dubya. The anti-Clinton ardor among the elite got them to thinking that any means were legitimate to win. This sentiment slipped over to Gore, whose great shortcoming as a potential aristocrat is an absence of beauty (even Tipper got fat, taking away some of his cover). I could never have imagined anyone attempting to win an election restricting the vote, as the Republicans did. I also could not have imagined that the Supreme Court would intervene decisively where they did not belong and endorse the act of restricting the vote. Baker, on the other hand, understood that enough justices felt they belonged to the aristocratic elite and shared the anti-Clinton/Goreism. Thus, he had the vision to push on to the Supreme Court despite being summarily rejected in Florida and the regional federal courts.

    Visiting this subject raises the question of whether we may be developing a wealthy positional aristocracy. Dubya himself is the best example. One of the foundations of an American aristocracy is elimination of the inheritance tax, something the new president is passionate about (noteworthy for a man who is not passionate about much). Recently, I heard a far-righter say, “I challenge anyone to find a justification for the inheritance tax.” The justification is to reduce the possibility of creating a moneyed aristocracy in this country. The proliferation of $100 million and up individuals may pose a problem in the future, for a 55% tax on a billion still leaves $450 million.

    Many of the very rich I have known share my feeling. The foremost example is Warren Buffett, who points out the critical role the estate tax plays in promoting economic growth by helping create a society where success is based on merit rather than inheritance. He is fearful that leaders will be created by money rather than competition. “Without the estate tax you in effect will have an aristocracy of wealth, which means you pass down the ability to command the resources of the nation based on heredity rather than merit”.

    One of the most interesting developments of Bush’s stand on eliminating the inheritance tax is the banding together of a group of wealthy people to speak out against the proposal. This is a matter that both expresses Bush’s aristocratic viewpoint and his political incompetence at the policy level. He sees what is beneficial to him as good for everyone, when his interests are far apart from what helps the man on the street. He just does not get it when it comes to his personal prerogatives and in the end that is likely to bring him down.

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  • Adolph Bush – February 2003

    “Anesthesia, no matter how well administered, eventually wears off”- Frank Rich, N.Y. Times

    I have had an eerie feeling about George Bush from the beginning. He seemed a spoiled brat of no accomplishment who must be a poor president. That his vision did not extend below his own social level has been confirmed by his only domestic program, a determined effort to lower taxes, a policy that largely benefits the rich. Although he has done a remarkable job gaining political popularity, he has not dealt with the troubled economy and his policy of international aggression has earned us hatred all over the world.

    Despite the record, he is popular. How? Two factors are responsible: 1) he has developed into a brilliant politician and 2) he has skillfully played upon the emotions aroused by 9/11. Let us look at the record to see if the popularity is deserved.

    As background, Bush has little interest in government policy, and as a result the administrative side is left to others. At the same time, he is keenly interested in keeping attention focused on himself, so that other cabinet members do not get any notice. The result is that no one knows what is going on in this administration. That is important because obscurity has allowed the right to carry out anti-government programs unobserved. Some of what they are doing will end up as positive, but it is suspicious because of being done on the sly. Meanwhile, the game of politics is what entrances Bush, he merely adopts an issue here and there for its political impact.

    As for domestic accomplishment, he pushed for and got a mild version of an education program, but the changes have never been funded and it is now forgotten. It was compassionate impressionism, and the right does not like government programs of any kind. The main Bush program, the one he ran on, was a tax cut. Remember, give the people back their money. If the economy had kept going, Bush would not have gotten much, but fortunately for his tax program, he immediately ran into a recession. Now tax cuts could be economic stimulus, and suddenly were wise. We ended up with a new tax law far different from his proposal, but Bush got credit for it anyway, although it was a bipartisan effort at economic stimulus. The early benefits went mostly to the lower brackets, the upper bracket cuts were delayed, and the entire plan was set to expire in ten years because wiser heads were aware that financial pressures will mount after 2010 because of a major increase in retirement.

    Bush was not satisfied and almost at once began pushing for acceleration of the delays in the high brackets. When the Democrats made an effort for further tax moves because the economy remained weak, Bush pushed harder for acceleration and also for making the law permanent, not a sensible cause with any tax law, especially with deficits exploding. To defend the high bracket cuts that became increasingly questionable with the need to boost the economy, the president pulled a twist that has become his standard mode of operation, tagging any effort at changing the tax law as a tax increase. The notion that curtailing the reductions that had not yet taken place was a tax increase is ridiculous, but it seemed to create the desired impression. Not only did he use the need for more stimulus in this way, he introduced yet a further high bracket focused request to make dividends tax free. You could hardly get less stimulus for the dollars lost, yet typically Bush pushed it as a stimulus program.

    Bush’s lack of interest in a truly stimulative tax program derives from an overriding belief that no one should be taxed at more than 25%. If that leaves the government short, then cut government. This is standard right wing dictum, but abrogates present management of the government and the economy. This fiscal irresponsibility comes out of Bush’s lack of interest in economics. He simply ignores economists, as reflected in the departure of his entire economic team because no one was paying any attention to them and they were insufficiently cooperative in bending their economic beliefs to his political needs. Being on the Bush team means blindly following whatever he wants. He has never proposed a program for specifically dealing with the weak economy, as Clinton or Gore would have, a problem because we seem to be facing a new and more intractable situation.

    The style of baiting with high sounding motives and switching to a hidden intent first appeared in the tax area, and has become Bush’s keynote, repeated over and over. For instance, the call for a prescription drug benefit started as a disguised attempt to curtail overall medicare benefits, while appearing to be the compassionate supporter of the aged. Something has to be done about soaring medicare costs, but rather than attacking the problem frontally amid careful study, we get a program aimed at tricking people into getting out of medicare and medicaid through a drug benefit (drugs may be expensive, but they are a minor factor in rising medical costs). The hydrogen power research project is fine, but it is an attempt to cover up despoiling the environment. Bush initiatives are almost always based on putting a favorable light on something the American people would not approve if addressed directly. Tax benefits of his programs always appear as averages, where huge benefits at the top average out reasonably well, but the median taxpayer often gets nothing. He uses statistics in the most dishonest manner, something all presidents are guilty of, but never to such an extent.

    Another example of domestic deviousness, escaped through the distraction of 9/11, is the business scandals. The Enron blow up could have been disastrous, for big business created the Bush candidacy, and Enron was his foremost corporate supporter. It had gotten several people into the administration, including a cabinet member, and its fingers were all over the proposed energy program. Suddenly, the very corporate leaders responsible for Bush’s rise were revealed as greedy cheats using their position at public corporations to line their own pockets. Bush’s problem was compounded by his man at the SEC having sworn to eliminate the reforms of his predecessor (standard practice for anti-regulation Bush). One gaff after another led to SEC chief Pitt being canned, but again Bush pulled a slick one, naming an old Wall Street hand to head the SEC, where he will be in position to protect the interests of the major brokerage companies. Again, Bush displayed that his loyalties always lie with corporations and the rich, he never has any interest in the common good.

    During the Enron and accounting fuss, Bush stuck loyally by his business constituency and would not hear of reform, until the Worldcom bust created such outrage that something had to be done. Only then did he sign the Sarbanes law increasing the powers of the SEC and adding supervision to the accounting industry.

    After signing the bill and rendering his usual tough guy speech about locking up the crooks (his backers!!), the president went right back to fostering his business supporters. He sought to undermine the new law by under-funding, to defang the new accounting oversight board by appointing a bumbling old man with little knowledge of accounting, and to protect the besieged brokerage industry by appointing a Wall Street stooge as new head of the SEC. Bush’s most repeated act of governance has been sabotaging regulation to the advantage of his corporate and Wall Street supporters. They put up the money and he dishes out the rewards (it’s called loyalty, a trait he admires above all others).

    With 9/11 arriving almost simultaneously with Enron, Bush had lucked out again. He is fortunate in having a soft press. The right wing press would have crucified a Democratic president under these circumstances. The Democrats don’t have that kind of opportunistic partisan support, and the legitimate press seems to have a guilty conscience because of unfair treatment of Clinton over White Water. Another difference seems to be that Clinton drew an automatic distrust that went with an over-smart over-sexed poor boy from the sticks, whereas Bush has an establishment propriety that creates a clean impression. One of his most remarkable feats is maintaining an aura of cleanliness despite support for corporations that would normally be considered suspicious.

    Bush escaped unscathed from this contemptible record not merely because of 9/11, but also due to a knack for being perceived as a man of the people. That is no mean feat for an upper crust Ivy League aristocrat whose vision does not go beyond his own tax bracket. How did Bush get away with this favorable impression?

    There are a several parts. First, he has no personal interest in right wing, or any other, policy, ideology is not his thing. He is a politician who wants to get elected, and that is the only thing on his mind. Gingrich loudly positioned himself behind the right wing program, opening himself up for counterattack. Bush is silent. He leaves the dirty work to Cheney and those actually running the government, who operate quietly, covered by the headline grabbing Bush ranting on taxes and terrorism, Osama and Saddam. What little involvement Bush has is in backwater issues like education and stem cells. When questioned on domestic matters, he changes the subject by answering in terms of tax cuts or fighting terrorism. He can turn almost any question into getting Saddam, or earlier Osama. In control of the forum, he simply does not answer questions that might be embarrassing. In a recent conference on the economy with a group of financiers and economists, they got nothing, everything led to Iraq. Press sessions are used for propaganda about tax cuts and war on terrorism. He takes full advantage that anything he says is news, no matter how innocuous or repetitive. The 3/6 press briefing was a total loss from the point of view of actually answering the questions, and when anyone tried to follow up, he moved on. Using this formula, he no longer seems the idiot before the press because he never allows himself to be trapped in anything of substance that might make him appear awkward. But I want to pose a question – how can you trust a man who won’t answer simply questions?

    The Bush presidency has marked a new phenomenon on the American political scene, management of the daily news to create a favorable impression of what is happening and what they are doing, taking advantage of the average voter’s gullibility. Right wing opinion molders are skilled Wall Street traders taking advantage of the public’s emotions. Their remarkably success has extended to taking over whole TV networks, and continually planting their people on talk shows as experts, or using their business influence to get far right programming, as in a show by a panel of the Wall Street Journal editorial staff. The ordinary listener is unaware that it would be hard to get more to the right than this gang.

    Next in the Bush act is the Texas cornpone drawl. Bush, the eastern establishment Yalie, has succeeded in pulling off a kind of slow, barroom-casual, slurred country speech with a gospel evangelical tone that makes him seem exactly what he is not. His acting has improved immensely, supported by a schedule that in a typical week includes four carefully scripted appearances outside the capital. Like no other president, he is always on the stump. No president has ever made so many speeches, or had so many speech writers. This is his role, and he is good at it (lately the cornpone drawl has been curtailed to appear statesmanlike). Others run the government, he makes speeches and smoozes. This is covered up by the press reporting everything as a Bush initiative when he usually has nothing to do with it, while cabinet members and staff have disappeared from public view. The minions are coached to praise his participation and judgment. The effort to built up the boss is orchestrated on a scale never before seen in American politics. Speeches are not directed at a specific topic, but at personal image building.

    A keynote to the Bush presidency is his extraordinary self-centerness. Here is an example, drawn from a puff job book by one of his speech writers. The speech writer writes what he considers a good speech on some subject, and Bush, who spends a great deal of effort editing, had marked up the speech so badly that the speech writer asks, what does all this mean. The answer, “you don’t get it, the speech is about me”, not whatever the subject was supposed to be. That’s Bush, detached from events, but absolutely determined to hog whatever credit is available and ceaselessly working on his image. Let’s face it, that’s weird, weak, and most unfortunate for a president of the USA. It is a vital job, not merely a stage for enhancing image.

    The most remarkable example of the emptiness of Bush’s domestic policy, and a foremost example of his political cleverness, is home defense. Following 9/11 you had to be blind not to see the need for a program of home defense. Bush did nothing, encouraged by the right wing abhorrence of any government program other than defense. The only exception was a massively overdone airport security program to salve the public and give an impression of activity. From a practical point of view, the airport set up is ridiculous, but it was good showmanship.

    Inaction on home defense brought the Democrats to attempting home security legislation, only to pull back because Bush was opposed (we don’t want another government agency). The Democrats blew a heaven sent opportunity, failing to recognize that the Republicans and Bush could never have vetoed such a bill. When hearings about the shortcomings in intelligence and lack of action elsewhere captured the news, Bush, with an ever keen political ear, quickly slapped together a proposal for a massive new agency.

    At this point Bush’s politically devious mind reached the point of brilliance. He proposed that the new agency not abide by civil service standards, a maneuver that put the Democrats in a bind because of their labor constituency (since a major reduction in civil service jobs was involved, the old personnel system will continue). Bush was then in position to assert that the Democrats were sabotaging home defense! You gotta love a guy able to pull off a dirty trick like that, real genius. As the election approached, he emphasized the imperative need to act immediately (when Bush finds a new political cause, it must always be done immediately), and the Democrats were holding things up. This affair was hilarious if you have no concern about truth and proper management of the government. With no program of his own and little interest in government, he feels free to work all the political angles, but you have to ask yourself if Bush recognizes the seriousness of his responsibilities, or is someone having fun playing games.

    The home security department is likely to be a mess, because Bush’s interest does not extend beyond political expediency, confirmed by the unwillingness to fund new initiatives (admittedly hard with an exploding deficit). The massive, slapped together department is the wrong way to go about a serious task. It is almost as if the new department was sabotaged in its creation because the right does not believe in government programs. Eventually, another terrorist attack will be a great political event for Bush, and he can build capital throwing money at whatever area is hit, but the concept is prevention.

    Why would we, a democratic nation, be attracted to a man with no compassion for the public good, who supports survival of the fittest laissez faire capitalism that led to the rise of socialism and Communism two hundred years ago. The answer is that he is expert at covering up his true direction, achieved through clever political maneuvering and distracting the public with fears of terrorism and warlike revenge. Social programs will be smothered in a rising federal deficit, exactly the purpose of right wing reactionaries in control of policy. The opportunity to do something about a rotten financial system is already going by the boards, just as these people want. Moderate Republicans, who might have restrained the extremism, have knuckled under, impressed by the right’s winning ways.

    The right wing program is impossible to understand until you realize that destroying programs they regard as socialistic is their goal. It is as if our form of liberal democracy, marked by the union of capitalism and governmental regulation in the interest of fairness, had not proven itself. These people want to go back to the jungle, to policies that failed long ago. They recognize that the law of the jungle will not sell in a democracy, so it has to be hidden behind warlike bluster, tax cuts that sabotage social programs, and dishonest numbers. The tax cuts were not intended to give back “your” money, but to destroy a surplus that permitted emotionally hated government spending (anyone looking at the numbers knew the surplus was a temporary bull market phenomenon). Huge deficits are of no concern because they foster the anti-government program. No one knows the consequences of soaring deficits. This president is recklessly playing with our future in support of right wing ideology that is not favored by the large majority of people.

    Unanimity gives the right wing a force far beyond its numbers, but a one directional government lacking debate inevitably becomes undemocratic. Employing expertly drawn myths of politically clever people like Bush, they are fooling voters. The sad part is that some right wing programs are fine, I think particularly of tort reform, a serious effort to trim costly bureaucracy and excess in government programs, and overhauling the tax system, but Bush shows no interest in these because they lack political impact.

    Reagan believed in the right wing philosophy, but he was a fair person and did not attempt to stuff it down our throats. As a result, not much happened. Cutting social programs is nickel and dime stuff that could help, but takes years of serious effort. Defense offers the only potential for substantial cuts. But the right remains determined and they have learned to work behind the scenes and cover up their actions. These people are both clever and ruthless, they know how to use power once they get it. The right needed a politically astute cover up artist, and they found one. Bush himself seems to believe in little other than that no one ought to pay taxes of more than 25% of income, but that position plays into the right’s hand, and he is happy to lend his support for political assistance. It is testimony to Bush’s absence of vision that a man so devoted to politics, an apparently devoit Christian, with no real interest in right wing causes, could allow himself to be maneuvered in these directions. In fact, Bush is our best hope of preventing right wing extremism. Being intensely political, he shows some appreciation that right wing positions could cost him a second term.

    Meanwhile, we are left with a domestic policy of inaction because the right wing program is to tear down. When all is said and done, we are a democracy and the right will lose. A government that lives off misrepresentation will ultimately fail. In both economic and international affairs, this administration is an utter failure. It can use war to distract the public only so long.

    If Bush’s domestic policy is a blank in the face of rising problems, foreign policy is a disaster. Bush started out on a strange course, doing his utmost to offend other nations by abrogating old treaties for no apparent purpose and backing out of virtually all worldwide cooperative efforts. Again, this is standard right wing dogma, and it has now come back to haunt him over Iraq.

    The overwhelming factor in Bush’s success at home is the war. 9/11 may be the luckiest event in presidential history, and the least lucky for the rest of us. The Bush popularity outside the right wing could not have been sustained without the warrior cover, for the difference between what his administration is doing and what he claims it is doing is just too great. 9/11 came to the rescue. You have to hand it to Bush, he realized the latitude the terrorist attack provided, and its ability to turn him from a bumbling aristocrat into a down home national hero. “War” provides an excuse for politically advantageous propaganda to deceive the public, justified as in the national interest.

    Let us go back and look at his war on terrorism, which has rescued a political career headed for the rocks. While it made Bush, the war on terrorism has not amounted to much. Freeing the oppressed people of Afghanistan was never our purpose, it had to be substituted when we failed to get Osama and most of his followers. When the terrorists holed up in Pakistan, Bush chickened out on chasing them down, as promised, and the war was fading away. Now his loud bombastic threats, so politically successful sat home, so outrageously viewed abroad, looked hollow. Something had to be done. Bush pulled another master switch by turning attention from Osama to his father’s old enemy, Saddam. Rumsfeld had been talking about getting Saddam all along, now was obviously the time. Although there has never been any evidence that Saddam participated in international terrorism, he has potential for becoming dangerous, he was a most oppressive ruler, and he had defied the arms control agreement from the beginning. Going after him was a reasonably logical next step. Iraq also had the advantage of offering a big target, when it looked as if terrorists would present no large objectives suitable for our big arms approach.

    The war on terrorism was hard to make a real war. A “war like no other war” covered up the reality that al Qaeda was nothing more than a few thousand ragtag religious fanatics (even including other terrorist groups, you are not talking about even a small army). We could not fight them with massive forces, it was a more subtle job. Such a “war” is better seen as a patient police action, using a combination of reaction and prevention. Terrorism is a common phenomenon around the world and many countries have learned to live with it, as we are going to have to.

    The Cheney/Rumsfeld warmongers came up with a solution. Using the concept that terrorism can’t survive without state sponsorship, they determined to fight or threaten into submission terrorist sponsoring states, but a base was needed and Afghanistan was not suitable. Iraq was the key: take over Iraq, which we had a reasonable excuse for doing, and use it as a base against the rest of the Arab world. Oil gave Iraq the potential to be a successful economic nation, and we might be able to establish a successful democracy.

    Bush then utterly butchered the Iraq program. He led off with his usual lionlike roar of emotional threats directed not only at Saddam, but at anyone questioning the legitimacy of such a move. Overstatement has continued ever since, leading to a failure to make a plain and simple case that was strong without invective. Having alarmed the rest of the world with his fevered ranting, Bush then made the mistake of yielding to Powell and going to the U.N. As delay met delay, and we became ever more shrill, we looked increasingly unhinged to the rest of the world and turned them against us. As a final indignity, we are threatening those who have a vote in the U.N. on proceeding against Iraq. Now we are backed in a corner where we have to go, and alone, or appear weak. Meanwhile we have the earned the hatred of the rest of the world and stirred up a nuclear hornets nest.

    What should Bush have done once the decision was made that Iraq was the next step in the war? First, the American people, as well as the rest of the world, needed to be convinced this was the right thing to do. Having looked at the facts, I believe this could have been done, but we never made a reasoned case. Bush screamed about evil ones and imaginary terrors Saddam was about to unleash, blowing the argument with juvenile bluster. The performance was so bad that the rest of the world began to wonder if Bush was not a lot more dangerous than Saddam. Many Americans and most foreigners were turned off. Clinton, for instance, or certainly Albright if Clinton was too hard a pill for them to swallow, could have been enlisted in support after all the troubles they had with Saddam, adding great strength to the argument, but the Bush presidency is all about Bush. He could not pass up the opportunity to swagger. The idea of a joint and thoughtful effort where he would have had to share is completely against his personality. Powell should have been send around the world in a diplomatic effort to re-form the coalition, and while it is doubtful he would have succeeded, he probably could have gotten a promise to sit on the sidelines. In the meantime, we should have been building our forces, the only hope of getting Saddam to give up. Powell was a liability in wanting the UN and was simply wrong that Saddam could be scared into leaving without troops breathing down his neck, but Powell should have been told to get on the team (Powell seems to be the only one that can get away with defying Bush, and if he were not black and the only one in the administration foreigners trust, he would be gone). Meanwhile, Bush continued his effort at intimidation, even going before the U.N. and threatening them with talk of irrelevance. The Bush U.N. speech, seen as great here, was a disaster internationally. You don’t build a coalition by insulting potential allies, a high school graduate knows that. If we had moved ahead it would all be over now. Instead the world has lined up against us, we are supported only by those directly threatened by Saddam (the oil countries in the mideast), and a few bought off others and small countries sucking up to us for one reason or another. The people in every one of our so called coalition partners detest what we are doing, while we blithely brag about all our support. U.S. voters buy the sham, the rest of the world is appalled at our dishonesty. When you put the Iraq package together, it is difficult to recall a greater diplomatic fuck up in the history of the world.

    The idea of fighting the war on terrorism through a takeover of Iraq is intriguing, and it might work, but the odds are long. Sitting right in the middle of the Moslem terrorist world allows us to strike, but it also makes us highly vulnerable to terrorism. A military government in the land of the enemy is an ideal set up for guerrilla warfare and terrorism. It is not unlike our situation in Viet Nam, not to mention Somalia and Lebanon. It could work, but there is plenty of reason to bet it won’t. Given the added factor that the cost will be huge and ongoing at a time our deficit is soaring, the wisdom of the move is even more questionable. It is a reckless gamble by the combination of a president who has never shown any willingness to think out problems and a militarist clique that has taken over our foreign policy. The polls say it is good politics, and that makes it right for Bush.

    Another important factor weighs against invading Iraq, the moral one. The Iraq invasion and what will follow is devastating for our position as the great land of peace, principles, and fairness. Strange that a group of evangelically inclined Bible pounders could go off on such a course, but the grouping of militarism, anti-government, and evangelical Christianity characterizes the hard right. What they overlook is the tragic break with our history and the principles that made us great. It not only saddens the rest of the world, but turns them against us. Imagine the U.S., founder and inspiration of the U.N., who worked for 58 years for peace with its help, threatening its very existence to satisfy our thirst for revenge about 9/11. It’s a very sad day for America.

    An even more tragic consequence of Bush’s loud-mouthed menacing is the sudden re-emergence of a nuclear threat. In our college days after the war we envisioned a chaotic world of A-bombs in the hands of irresponsible small nations. It never happened because the world was mostly at peace and responsible countries made an effort to keep A-bombs away from that sort of country. Suddenly it is real because of the threat we pose to the rest of the world. When you parade about threatening everyone, the other side is going to look for protection. The only protection against us is the A-bomb. Why didn’t we go after Pakistan, where al Qaeda retreated? We felt its government would control terrorists, but after all the threats about harboring, others took note that Pakistan had the bomb. The “axis of evil” is probably the dumbest remark ever in a state of the union address. For a dramatic sound bite, he neglected to consider what Iran and North Korea were likely to do after being singled out. I doubt any other president in history would have acted so irresponsibly. Iran had to have accelerated its nuclear program and we have seen the reaction in North Korea. Bush had already threatened the 1994 nuclear control agreement with North Korea, apparently just because he decided he didn’t like its head man, or anything accomplished by Bill Clinton. To compound the idiocy, we refused even to talk to them, though from every indication North Korea appears to be looking for a bribe, something similar, though undoubtedly more costly, than the agreement Clinton worked out. This is arrogant stupidity on a grand scale. Bush may have accomplished the inconceivable, let the nuclear genie out of the bottle. If it was a Democrat, the right wing would be screaming impeachment, but Bush has the public worked up to such a state of blind patriotism that few noticed this incredibly folly.

    If history is a guide, the Bush administration foreign policy is headed for a serious accident. The foundation of that policy is to get our way by war or the threat of war. These people are off in groundbreaking direction (for us) that has historically been tragic for any nation going down that path. The haughty, uncooperative, muscle flexing aggression probably originates with Cheney, and Bush glorifies in the Falstaff role of muscle flexing leader. His fixation on himself is the clue to Bush’s willingness to do something so stupid. The precipitous break with our peaceful honest broker tradition is rapidly making us the most hated nation in the history of the world. How can the world’s most hated nation be other than an inspiration to terrorists?

    The disastrously flawed international policy is part arrogance, and part Bush sounding off for votes at home. Loud-mouthed bully-boy talk by the leader of the world’s most powerful nation could hardly be more counterproductive, but it has succeeded in driving the American people into a kind of get ’em at all costs mood that generates popularity for himself. As a nation we have reached that peculiar state of mind where doing anything thoughtful is shouted down as appeasement.

    Few of us at home, though many overseas, have noted that the Bush approach – playing on the psychology of revenge, threats aimed at raising the temperature of the people, heavy doses of propaganda about questionable successes and impending dangers, and, above all, focusing attention on ogre villains – is a political program developed by none other than Adolph Hitler. Hitler succeeded because of the depressed state of morale in Germany following World War I; Bush is succeeding because of the shock to American’s feeling of safety at home. Bush has surprising personal similarities to Hitler, such as the intense interest in politics and disinterest in the governmental process, an insistence on absolute non-discussive loyalty, and self-important talk of being a great leader (embarrassing for a normal person). The effort is to transform the boasting into an image of tough guy fighting leader in whom we should place unquestioning patriotic trust. Sadly, it is working for Bush, as it did for Adolph. I do not want to make out Bush and Hitler as the same when they are obviously different (Hitler would be insulted to be equated with such an airhead). The point is that the political tactics being employed by the Bush administration are right out of Hitler’s book, and Bush is ideally suited to carrying them out.

    The Bush role is to sell a Hitler-like course to the American people, and it is altogether sad that he has succeeded, while his impetuous rhetoric hastens our loss of esteem. We are going to win the battles, but lose the war, for nations that have behaved this way in the past (the you-know-who lookalike again) have always come to grief. The old saying, power corrupts and absolute power corrupts absolutely, is coming home to roost in America. It may be the saddest time in our history. Already the tough talk is beginning to bring on one crisis after another.

    In all the politicking, Bush has become a man who never tells it straight. He relates non-taxed dividends to job creation and helping small business, though the thread is thin and the major beneficiaries elsewhere. Prevarication is less noticeable in one whose public conversation amounts to silly utterances about evil doers and tax cuts as the answer to all our problems. Politicians are not known for telling the truth, what is troublesome is that Bush has somehow created a trust that allows him to get away with it. Although he changes the facts to suit the occasion, he never changes direction, and the fixation is not seen as narrow-minded, but great leadership.

    The image of leadership is a big thing with Bush, perhaps because he is such an unlikely leader. He is a man of absolutely no accomplishment in life OTHER than the remarkable achievement, all the more remarkable for his lack of prior accomplishment, of getting elected governor of Texas and then of the U.S. No other president has achieved such a miracle on so few credentials. On the leadership issue, he is the only man I have ever seen who constantly praises his own leadership, as if it can be willed by advertising. He brags about it, casting every decision as a great achievement. Bob Woodward’s interviews with Bush in his strange new book, Bush at War, center on self-congratulation to a sickening degree, while also revealing his detachment from events and intense devotion to “communications”, the euphemism for politics. All this self-back patting would be comical if he were not our president. This is a man who takes criticism as disloyalty, like a spoiled child who has to be right. Bush has an amazing talent for creating an impression of strength, yet most of the talk is misrepresentative justification for tax cuts or overstated finger pointing at evil doers (again reminiscent of Hitler). Many of those who listen to the words rather than being carried away by the emotion are appalled, and can’t stand listening to him. I felt the same, so boastful, so obnoxiously pleased with himself, so black and white, so repetitive, so sophomoric, but now I listen, amazed at his gall and the willingness of the American people to fall for the jingoistic braggadocio.

    Our approach to the war on terror is all emotion, lacking in any effort to get at the underlying causes of Moslem hatred. Smash ’em and forget ’em, they are just evil (admittedly, dealing with people whose leaders want to go back to the seventh century is an experience we are not equipped to deal with). Eventually someone is going to research the obvious question – why do they hate us so intensely and what can we do about it (apparently the “communications” staff did ask the question, but on failing to come up with an answer – where in hell did they look – forgot it).

    Bush’s lack of compunction about misrepresentation is not unusual for a politician, but he does it as a matter of routine, and avoids being caught because the public trusts him, though the very actions prove him unworthy of that trust. He and his people have no shame, to them it is winning the great game of politics, and they cover up their true intentions with clever talk that when stripped down is simply lies. Eventually this kind of thing has to backfire. It’s like stealing, you can’t get away with it forever. Voters may be gullible, but they can be fooled only so long. At some point the legitimate press is going to get tired of this stuff and turn on Bush.

    If you think about it, the Bush act is some where between amazing and appalling (the Hitler look alike again). The fact that he has gotten away with childish foot stomping and dirty political tricks encourages more of the same. This course must lead to serious trouble. This is a well brought up, well educated, son of a president, yet his actions in no way resemble those of a gentleman, or someone interested in governing in a fair and judicious manner.

    Bush will fascinate historians like no other president in our history, especially if he gets a second term. It is impossible to imagine a man more opposite from Abraham Lincoln. Lincoln didn’t go to church, but thought constantly about the downtrodden. Bush is a religious freak, but couldn’t care less about the downtrodden. Who is in fact more Christian? We have never had a president who said one thing and did another to the extent of this one, or a president who endlessly boasted and carried on about his marvelous leadership. No doubt we have had many egotistical presidents, but they did not advertise. I doubt any president has been more reliant on instinct (and he’s proud of it!). Imagine relying on instinct when his decisions affect the entire world. Reliance on instinct probably reflects a lack of maturity that leads to fear of careful consideration. A man of conviction would want to participate in policy matters and be willing to discuss his actions. Bush does not evaluate, he reacts emotionally. That results in stirring talk, but dumb decisions.

    The Bush bluster and bullying is characteristic of those with deep seated lack of confidence, a bit like Lyndon Johnson without the brains and experience in government. The penchant for threatening anyone who gets in his way is not a sign of inner strength. One of his more interesting characteristics is a lack of awareness of who he is. If you want to make him mad, refer to his patrician background. Apparently he sees himself as a man of the people, even though his lack of interest in social programs and emphasis on tax cuts for the well off starkly reveal the patrician point of view. It seems impossible that he could not recognize ending taxes on dividends as a huge break for the privileged few, a virulent form of class warfare, to use the term he uses for its opponents. This self-interested way of seeing things is not unusual for a patrician, but it is amazing for someone able to win the presidency in modern times. Steve Forbes is in a similar position, but his arrogant fruitcake demeanor could never win. This suggests that Bush may actually believe some of the baloney he spouts, that it isn’t all politics.

    Bush psychology may be overdone, for he is a devotedly political animal. The bombast reflects not just an absence of character, but is directed at domestic political consumption, making Bush a combination of under-confident blusterer and political Machiavellian. Whatever the case, it is interesting that the wanna-be cheerleader of prep school days now behaves like a swaggering football hero. As I say, he will be a fascinating study for historians.

    How much permanent damage can the Bush crowd do? Unless voters wise up about the bad situation we are now in with the rest of the world, and that domestic programs are aimed at boosting the rich and destroying social programs, he is likely to be reelected. Four more years and the damage could be serious. We will end up in a dark corner internationally, saddled with a crushing deficit and shrunken dollar, regularly struck by terrorists. My own inclination is that by the time of a second term, voters must recognize an undemocratic domestic policy and a shipwrecked foreign policy. The increasingly crowded Democrat candidate field reflects a feeling of looming catastrophe. But Bush is much cleverer than I thought, a true master of misrepresentation. I have been reading a book on Hitler, and it is amazing how his popularity continued to grow by means of rabble-rousing speeches, suppression of free speech, and originally bloodless military victories. Germans ate up his line, just as Americans are Bush’s today. But we are not the traumatized Germans of the 1930s, we will come to our senses.

    While it seems strange that a man from the eastern establishment, with an internationalist father of conventional domestic and economic thinking, should have Bush’s positions, they are simply standard right wing dogma. Despite his background, Bush is a Texan at heart, and we should not be surprised that he holds the same beliefs as Dick Armey, Tom Delay, and Phil Gramm. These positions can be summarized as less government and less taxes on the domestic front and a kind of isolationist aggression internationally. While I see tax cuts as playing to his fat cat friends, with income and taxes so concentrated today in the upper few, any tax reduction must necessarily go largely to the benefit of the high brackets. This very fact, though, suggests that tax cuts are not the answer to today’s troubled economy.

    The problem for Bush personally and for us with him as our leader is that he is a weak man, as revealed in a frivolous past of non accomplishment and the present self-absorbtion, self-congratulation, unwillingness to debate or answer for his actions, and the constant deception. When confronted with a grand plan for action in the war on terror, and having to choose between different directions proposed by Rumsfeld and Powell, his weakness meant that he was bound to make bad decisions. Some combination of doubt and shortage of comprehension or thought inevitably led him astray. I think it likely that the Bush presidency will be one of the saddest in our history. Hopefully, mercifully for both him and us, it will be short.

  • Saddam – Running Cover For Dick? – February 2003

    Free flowing propaganda about the pressing need to get Saddam, in which kernels of truth are built into wild imaginings as to his intent, worries Americans, and frightens the rest of the world. It took me a while and some study, but I am leaning to the idea that kicking out Saddam is the right move, that he really is dangerous, and that Iraq is a reasonable next step in the war on terror. The case is plenty good enough not to have been spoiled with exaggerated rhetoric. The American public could easily have been convinced, and, more significantly, foreign support was there for the asking, by making a straightforward case, as father Bush did in 1990, instead of sounding off like spoiled brats and bashing anyone offering resistance.

    Although the administration sounds like a bunch of warmongering klutzes, there is something behind the bluster. While they are so secretive that their own cause has been injured, there is something sensible going on here. I have been trying to figure out what it is.

    Our indecisiveness stands out because of the loud rhetoric, but it probably results from a struggle between two camps: the non-war Powell side and the Cheney/Rumsfeld warmongers. On the Powell side, the plan all along has been to use threats to get Saddam to comply. Assuming he wasn’t the frenzied madman we portrayed, it was logical to assume that if we were firm enough (that is, took decisive steps to invade, the only way to deal with him) he would give up his weapons in order to remain in power. Unfortunately for Powell, we had threatened too often in the past, and Saddam had worked wonders with the U.N. and felt he could again, so we have had to follow through by positioning troops. The Cheney side is anxious to get on with it because, if Saddam saves himself at the eleventh hour, he will remain a threat and their plans will be thrown awry. In the end, Saddam will make the decision, which is unfortunate for us if he remains (so I am rooting against Powell at this point).

    What about the troubling political vacuum should Saddam be eliminated. The warmongers have a plan. Here it is.

    The following theory on what the hard liners are thinking comes from the February 17 The New Yorker, in an article titled After Iraq by Nicholas Lemann. Lemann uncovered a plan in the defense department, a mighty aggressive and optimistic one, but at least a rational approach. Remarkably, no one seems to have noticed because of intense concentration elsewhere. It goes this way.

    The belief is that terrorism can survive only with state support (right wing pundits have begun to recite this as gospel). One of the reasons we did not go after Pakistan, the new home of al Qaeda, is that the government there makes a passing attempt at not letting terrorists run free. Better to support the military government because if it falls, fundamentalists, who support terrorists, will take over. Pakistan’s possession of the A-bomb adds to our reluctance, but the official reason is that the present government is “safe” as related to terrorism.

    Saddam, while not active in terrorism, provides a heaven sent opportunity for an aggressive strategy in the war on terrorism. The concept is to make Iraq an example, to put fear into other Moslem states that we mean what we say and will knock them off if they support terrorists. Iraq sits right in the middle of the Moslem world on the border of both Iran and Syria, the two main terrorist supporting countries. We will be right there, with all our arms, saying, clean up the terrorists or it is your turn to be crushed. Military force, or hopefully threat, will be used to bring enough pressure on the governments to get them to reform, modernize, renounce terrorism, and go after terrorists in their own countries. At the same time, gradual creation of a humane representative government in Iraq, operating in the Japan occupation style, will have a spillover effect on the entire region.

    Combine the idea that terrorists require state support with the immense pressure we will be able to apply by sitting squarely in the midst of the Moslem world, and you have a strategy for winning the war on terror. The apparently foolish urgency relates to Powell’s fear that time is running for out his peaceful solution (which is not a solution as regards to Iraq and Saddam), and Cheney/Rumfeld’s even worse fear that Saddam will wiggle off the hook at the eleventh hour.

    Supporting the idea of a forcible military government is that nothing is heard any more about regime change because we have no interest in a new regime, we will be in charge (at least for several years). This is the vital change brought about by 9/11, the inadequacy of regime change and the need for an occupation government. I understand we are pretty much ignoring the people who might have taken over (they are very fragmented anyway), and they are beginning to get worried. Liberal fears that removing Saddam will leave chaos behind are wrong. The fact that Iraq is a Versailles Treaty 1919 put together is all the better for the plan since it is relatively ungovernable anyway.

    The hard line theory is to make terrorism like piracy and the slave trade, unacceptable in the world (Bush is good at articulating this when he isn’t carrying on about evil ones). Moslem countries used to be proud of their piracy, but we wiped it out (after Mediterranean countries themselves failed). We think it can be done again by putting pressure on every country to consider terrorism as similar to poison gas (used only once by Iraq/Iran since World War I) and the A-bomb (used only once/twice by us), that is to say, not acceptable for a civilized nation. The hardliners believe that, because of jealousy and our support for hated Israel, terrorism can’t be ended through moral pressure. We’ve got to force it by making an example of what can happen to them and be on the spot to back up the threat. Afghanistan was a diversion, a get al Qaeda and Osama campaign that failed. We are accused of neglecting Afghanistan, but that was a side show. We won’t neglect Iraq, because it is the key to the plan for defeating terrorism.

    Iraq offers another plus: it has the economic potential in its oil to be self-sustaining, and become a successful economic nation. We are going to supervise a major oil development program by seeing that reliable contracts are issued to oil companies in exchange for rapid development (another reason why we have to remain in control) because oil fits neatly into the overall plan. Oil can be used in addition to military pressure to bring non-oil countries, notably Syria, in line, perhaps even to produce enough oil to pressure Iran and Saudi Arabia.

    The hints coming out of Washington support this as the plan. It is reasonably sensible from the militarist point of view, but whether or not it is doable remains to be seen. The biggest danger is a perfect terrorist set up, an occupying army in an uncooperative country, where nationalism is added to the motivation of religion. Even if some see us as providing freedom from an oppressive regime, that good will is apt to quickly wear thin. It is Lebanon and Somolia all over again on a grand scale. The plan is also probably too optimistic about threat versus shooting, and any more invasions will make us look like a conquering hoard. I suspect we are overlooking the religious factor that makes terrorism more difficult to stamp out, the horrible example being set by Israel, and the difficulty of conventional forces against an at home guerrilla movement (Viet Nam already forgotten). Another probably unanticipated difficulty was the severity of the shock around the world, especially in Europe, at our provoking a war, a problem that will be intensified by an occupation government. I sense we have at least temporarily lost our world leadership, other than militarily, because of the hopeless diplomacy of the Bush administration, but it might be recovered some time in the future.

    No matter which alternative unfolds, the strategy could not be revealed. The very man Lemann talked to refused to say anything the other day before a Senate committee, leaving the impression we have no plan for a post-Saddam Iraq. There was a hint at a two year program for Iraq, but the real plan involves a lot longer.

    Revealing a plan to use Iraq as a long term foil to terrorism might have created even greater resistance. Even if countries like France understood what we were up to, the plan is extended, fraught with future problems, and undoubtedly very expensive, so they did not want any part of it. Both France and Germany are emotionally opposed to occupation, whereas we have the arrogance to think that everything we do is well intentioned. The perhaps unintended consequence is that we are going to be left with the full cost of the war and the occupation. While everyone is trying to figure out the cost of the war, the more pertinent question is probably the cost of maintaining a large army in Iraq for years, and the lack of maneuverability a large force there leaves us elsewhere. In the administration’s mind, some of that cost can be covered by Iraq oil royalties on greatly increased production, but taking their royalties to pay for our occupation will create even greater bitterness abroad.

    Another reason for secrecy is Bush’s determination for more tax cuts. Apparently we are looking at a deficit building toward $400 billion, before a war that might cost $100 billion (we have had to do a lot of bribing, not just to Turkey, so the cost will probably be much higher), and occupation another $50 billion a year. Put that on top of $50-100 billion more in tax cuts (remember, the largest portion of the 2001 cuts, those in the top brackets, have barely begun) and who knows where we are headed. It may seem inconceivable that Bush would take such a reckless course, but the far right is in charge of domestic policy and they view any tax cut as good. They are emotionally committed to chopping social programs, and how better to accomplish that goal than to make it a matter of national security.

    The lesson on the Iraq controversy is the bankruptcy of the Bush foreign policy. As soon as he came to office, the bashing of foreigners began, we pointedly refused to cooperation in any global effort, and most of our treaties were renounced. When the decision was made to make Iraq the second step in the war on terror, the Bushies immediately began bashing anyone who did not step up and offer support. The situation was made worse, both for foreigners and at home, by exaggerating the immediacy of the affair.

    It is likely that the tense international situation could have been avoided by reforming the old coalition through friendly face to face diplomacy. Proceeding recklessly ahead, while bashing anyone expressing caution, was the kind of thoughtless hot headed arrogance this administration has become noted for. When Powell talked them into going through the U.N., the case was already in trouble because of the president’s excessive rhetoric, then Bush made a tragic mistake: he went to the U.N., made a grand, highly exaggerated, talk down his nose speech, and then threatened all who would not provide support. He even concluded with the extraordinarily unwise statement that the U.N. would render itself irrelevant by not following his lead, referring to them as a budding League of Nations. While seen as a great fiery speech in the U.S., at least in conservative circles, it was a truly amazing blunder, a blueprint for turning friends into enemies. These kinds of words are almost never used in diplomacy because they are so counter-productive. All of this is incomprehensible until you remember that the radical right wing wants to destroy the U.N. and exercise our superior military power to get what we want (in other words, the people calling the shots are seriously dangerous). However, after throwing away any hope for help and backing ourselves into a corner, we ought to go ahead and clean up Saddam.

    Reviewing the history of our ins and outs with Saddam, the following events are likely. The U.N. difficulties encourage Saddam to remain firm, but he will fold with action. We always open with lengthy bombing and when that begins, the game will be on. He will be back-tracking, we won’t. He will try to remain by giving up the weapons (not all at once, chemicals first), thereby enlisting support from the rest of the world, we will want to go on, get him, and execute the plan. It will be a process, not a sudden happening. In this final showdown, our ridiculous diplomacy will make life much harder for us, but at this point we might as well win the war, and hope that Bush, if not his militaristic aides, has learned from the mistakes.

  • The War on Terrorism – January 2002

    Figuring out where we are going in the war on terrorism is extremely hard because the Bush administration has chosen to keep us in the dark. What do they have to hide? From what we know of the Bush program, a lot of sobering questions need asking.

    The tough talk comes out of the heat of revenge. As we cool down, the broad suggestion of stamping out terrorism all over the world will be modified because what they are saying is so aggressive as to be imperialistic, an amazing digression from our traditions. The administration and the generals may be thinking that by smashing a few weak sisters, the major Moslem nations will roll over and clean up terrorism in their own countries. Historically, however, efforts to smash religious movements with raw power have ended up encouraging the movements.

    Because the Bush program is so full of questions, they have chosen to obscure the difficulties by treating us as children, providing little information, attempting to suppress sources, and engaging in the old tricks of wartime propaganda. This kind of thing is suspicious, what are they up to? In order to throw some light on the matter, I have been reading away, and while still left with a lot to learn, here are my so far conclusions.

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    1) Bush is miscasting Afghanistan as a great triumph in order to build support, not an unnatural course, but one that casts a smoke screen of obscurity, a dangerous precedent.

    The Taliban was a repressive over-fundamentalist regime that ruled most of Afghanistan in recent years, but it did not engage in international terrorism. If the Taliban is best done away with from a humanitarian point of view, it has little relevance to the fight against terrorism other than as an important site of terrorist training. Grass roots support in the Moslem world means new sites can be established, though the need to move probably makes it easier to find them. As in Viet Nam, our actions are likely to build enemy numbers because they support bin Laden’s main point about our aggressive intent. Most of the foreigners training in Afghanistan, which we call Al Qaeda, escaped.

    The benefit of Afghanistan is not so much a direct attack on terrorism as elimination of a cesspool of anarchy, drugs, and radical Islamist anti-western feeling that was poisoning the economies and international relationships in central Asia. If we can bring order to that long anarchistic country and foster trade and understanding in the region, those countries may be motived to isolate and control radical elements. Pitching bombs is unlikely to defeat, and probably encourages, terrorism directed against us, but if we can use Afghanistan as a laboratory, and slake our thirst for revenge, the venture will have been successful (Afghanistan, though, is a tough laboratory).

    2) Bin Laden is the anti-American terrorist, but there are plenty of others not directed toward us. Our worldwide hunt seems likely to provoke others to join the attack on America. Exaggerating bin laden’s importance is not useful to our understanding of the situation. Its purpose is to build enthusiasm through a personalized target.

    In addition to his American emphasis, bin Laden has had a high rate of success compared to other terrorists. In general, anti-western terrorism has a high failure rate and the movement appears hesitant and poorly organized. Bin Laden is an organizer and seems to understand that you get no where in the western world with uneducated guerrilla trained fighters. Get rid of him and the movement suffers a major loss. But we are being presented an incorrect picture of him, as there are many heads to this dragon. Presenting bin Laden as the terrorist is good propaganda, but it covers up that terrorism is sponsored by many Moslem countries and supported by others. We need to understand the depth of Moslem feeling against us in order to counter it wisely.

    3) Misrepresentation of bin Laden and terrorism in the Moslem world.

    In the Moslem world bin Laden’s stature has been tremendously raised by the WTC. All of this fuss about the tape proving he did it is pap for the American public. They see us as evil people guided only by money and themselves as following the word of God. Bin Laden’s ideas resonate, all the more for our invasions. They see terrorism as a necessity, a desperate last weapon to fight our immense power. To them it is David versus Goliath and good versus evil. Carpet bombing and invasion strengthen and give justification to their negative impression of us.

    Our actions are probably helping bin Laden by marking him as a new messiah. We need to understand that Pakistan and Iran, to name only the principle sources of terrorism, are against us. Pakistan has always been the main base for terrorism, though in the past directed against Afghanistan and India. Bin Laden’s people are retreating there because it is a safe haven. Virtually nothing has been done to prevent this, though it could easily have been anticipated. Pakistan is working us over for all the money it can get. Iran made minor concessions because they hated the Taliban, but it is the leading source of international terrorism. Saudi Arabia may be our biggest problem. Not only is it a major source of terrorists, terrorist financial support, and religious fanaticism, but the kingdom continued its arrogant course after 9/11. These countries are wondering, where are we on the U.S. list for picking off terrorist-sponsoring countries one by one? Our attitude is, fine, we want them scared.

    4) The administration’s campaign of misinformation. While the administration’s thirst for revenge is personalized in bin Laden, it knows the depth of the problem. The Bush people, however, do not think we should know and are doing everything to prevent us from finding out. With Viet Nam, Johnson and Nixon lied, and to avoid the lie this time they tell us nothing and make every effort to suppress the news. I understand they are doing things like pressuring Moslem scholars not to appear on TV. The New York Times is silent, cowed by the nationalistic spirit from pointing out the depth of the problem and the hypocracy of some of our positions. European newspapers print some solid information, but apparently we are pressing them as well. Rummy’s press briefings are amusing, but he is thumbing his nose at the press and at us, while losing no opportunity to villainize.

    Another difference with Viet Nam is the pursuit of an old fashioned campaign of propaganda. The administration provides as little information as possible, spins that, and directs its effort toward pumping up the bellicose spirit. This is done by screaming about inhuman evil-doers, waving the flag, talking up brave Americans, endlessly honoring the dead, and monthly ceremonies on the 11th. The simplistic moral denunciations are nothing more than old fashioned propaganda. As usual with propagandists, they misstate the enemy’s motivations, making him harder to understand. Constant reference to murders and criminals covers up the fact that among a few billion Moslems the bin Laden terrorists are heroes. This kind of propaganda is normal for warlike nations, but it is sad to see in America, and sadder to see us eating it up. How much longer will the American people fall for this drivel?

    In order to understand the war and its likely difficulties, we need to appreciate that Moslems see terrorists as soldiers for Islam using the only weapon they have against our planes, bombs, and missiles. Impersonal bombing of innocent people is terrorism. As the power nation, we have the attitude that every American life is a treasure and their lives don’t matter. How many civilians have we killed in Afghanistan? Have we already taken an eye for an eye versus WTC? Probably, no one is keeping score, except terrorist recruiters (some information is just beginning to leak out in stories on other subjects). When asked about thirty villagers killed in a carpet bombing in the Tora Bora area, a general said, it was well known we were going to bomb there, they should have left (their homes!). Since they should have expected the bombing, it wasn’t terrorism.

    Hope of a sensible course lies in understanding that the problem isn’t just a few terrorists, that hatred of Western ways, and specifically of America, has spread throughout the Moslem world, and it is based on religious principles. Our aggressive approach pours gas on the flames and is likely to strengthen the terrorist movement. Terrorism has always been unofficial, so it will have no trouble going further underground. Afghanistan illustrates that we can conquer, and at the same time do nothing to counter terrorism. Bombs won’t do the job any more than a police state did the job in Israel/Palestine.

    We don’t seem to know anything except bombs. They are our foreign policy. Our arrogance is very evident. Can the wiser heads in the administration find an exit from the war strategy? The wolves may insist on Iraq, even though it has been a minor player in terrorism (no active terrorist movement in a dictatorially suppressed country). Going into Iraq will probably boost the terrorism movement, but they are weapons dangerous. Somalia is mentioned, though we would be criticized for picking another soft target and Somalia is about as minor a terrorist threat as you can find (going there makes us look something between stupid and scared). Hopefully, Iraq will feed the hungry mood of American warmongers, and after that we can find a reasonable course.

    I think there is a way out of this thing. First, we need a realistic view of the enemy. We are not fighting suicidal maniacs, but people whose faith is so strong they are willing to give up their lives. If we sit down for realistic talks, not with bin Laden, but the major Moslem countries, they are going to want us out of Saudi Arabia. Since we need their oil, and probably the royal Saudi family to protect that oil, an agreement would be difficult. We also need to force the situation in Israel. A number of Moslem countries have shown willingness to be reasonable. The cause is not hopeless. We don’t have to bomb them back to the dark ages, they are already there.

    The best hope for controlling Islamist fanatics lies within the countries themselves by encouraging capitalism and a better life. Afghanistan may serve as a focal point for interchange with other Moslem countries, including Iran. This is a long term solution and early capitalistic efforts are always filled with corruption and unfulfilled promise, but we are talking about encouraging development in backward Moslem countries. The worldwide terrorist movement exploded during the Clinton administration, perhaps in no small part from neglect of a weak state department under Christopher and Albright. The intelligence failure with the WTC was in the State department. The hero of the fight against terrorism is much more apt to be Powell than Rumsfeld (more likely someone down the road, for it will take time).

    In the meantime, suppression of the news and the law, the administration’s attitude that we can’t be told the truth, and the hatred baiting in speeches laced with demagoguery, is appalling for our country. Warmongering looks like a huge political hit for Bush, but this kind of enthusiasm will be short lived.

    John T. Stinson

    Conversation between Osama bin Laden and Hosni Mubarak, president of Eqypt (a clearer light on true feelings in the Moslem world)

    Mubarak: Congratulations, Osama, you really put it to the infidels with that WTC job.

    bin Laden: Thanks, Mr. Mubarak, as they say on Wall Street, it exceeded expectations.

    Mubarak: I thought you were some kind of an engineer, but you admitted on the tape you didn’t know the buildings would fall.

    Bin Laden: I’m mostly into roads and underground facilities.

    Mubarak: Maybe you better hit the lower floors next time so the infidels don’t escape.

    Bin Laden: The high floors are more spectacular and we are not so much after bodies as scaring the shit out of them.

    Mubarak: Well, you sure did, greatest show of dominos ever. Wonderful job, but don’t be getting soft in your old age. What can I do for you?

    bin Laden: I thought you’d like to contribute to my working capital. Everyone’s been kicking in.

    Mubarak: Ossie, baby, you’ve gotta nerve after trying to knock me off in Ethiopia few years ago.

    Bin Laden: Well, even my godfather, the king, came through and you know what I’ve said about him.

    Mubarak: That’s OK, I understand you don’t do it any more with the true believers now that you’ve discovered Americans.

    bin Laden: I’ve got this thing going pretty well now, and what with Bush freezing some of my assets and some of the charities, I need a little help. He didn’t tie up much, but I’ve accelerated my plans now that they’re coming after me and I know you don’t want to be left out.

    Mubarak: Certainly not, what are you looking for?

    bin Laden: I thought 5 or 10 million American dollars was a fair allocation, it’s less than 1% of your annual shake down of the Americans.

    Mubarak: I don’t want the brothers to see me as a piker, so you can count on 10. I’ll put it in your account at Egypt National today.

    bin Laden: thanks Mr. Mubarak, and I want you to know I appreciate the sacrifice in not banking 25 for turning me in.

    Mubarak: You know how I like American dollars, but dictatorshiping isn’t what it used to be. If I turned you in I’d have a revolt on my hands. You can’t mess around with Allah’s chose one these days.

    bin Laden: Musharraf told me the same thing, but those American dollars are supremely corrupting, so I want you to know I understand the sacrifice.

    Mubarak: Musharraf, eh, I thought he didn’t like you.

    Bin Laden: They all say that to put off the Americans, and Mushie made them pay up big for the help.

    Mubarak: You are such a thoughtful guy, Ossie. I’ll be watching closely, I want my money’s worth.

    bin Laden: How many bodies do you think 10 million is worth?

    Mubarak: Oh, I’m getting old, I’m not as bloodthirsty as I used to be. I’ll settle for making those infidels look foolish. A couple of aircraft carriers patrolling each coast, and 24 hour flights over every city for a couple of weeks will do. If you can run the president into Nebraska again, that would be super.

    bin Laden: I don’t think that’ s possible, next time he’ll make for the site as fast as possible, like Bill. There’s an election coming, you know.

    Mubarak: every time I go to the mosque I praise Allah for that one, but if he rushes to the scene you might be able to knock him off.

    bin Laden: Not in the plans. We need Dubya. All that World Wrestling Federation talk about evil-doing murders and criminals brings in hoards of recruits. Besides, that Cheney’s a hard ass, might start throwing A-bombs.

    Mubarak: You’ve got some to throw back, I understand.

    Bin Laden: sure, but only a few suitcase models. We don’t want them scaring my boys with the big stuff.

    Mubarak: How many did you lose in Afghanistan.

    bin Laden: We lost a few hundred, but the bombs did more damage to those Afghan hicks than to my men. They devastated those mountain villages, but you can’t do much with caves. Most of the boys got out.

    Mubarak: Good luck, Ossie, keep me informed.

    bin Laden: sorry Mubbie, we don’t trust anyone, you’ll have to read it in the papers.

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  • Dubya – May 2001

    Bush’s presidency has so far followed the course indicated by study of his past. The only real surprise is the absence of any effort to protect the compassionate image. I always thought it was talk, and now he has forged ahead on his pro-business path without the slightest pass at compassion.

    In a mild surprise, he has done a lot of speaking and has been much better prepared than in the past, so as to avoid the embarrassing gaffs of the past. For Republicans, the fact he has not made a complete fool of himself is taken as proof that he is not as stupid as we all thought.

    The most interesting surprise is not really a surprise at all, given the fact that his only non-political success was as front man for the Texas Rangers baseball team. Many of us expected that, given his lack of experience, trouble in expressing himself, and elitist views, he would not be the front man for the administration, but would operate as sort of a team cheerleader. In fact he is up front on everything, in many cases pushing cabinet members into the background when they would have been the more appropriate spokesperson. Thinking supporters were always concerned about his smarts and experience, but the great team was supposed to carry the ball. From what we have seen so far, he has his finger in every pie. If anything, Cheney has been a disappointment, appearing up front only with the highly pro-business, anti-environment energy program. In this case, Bush had already made enough harsh statements that drew loud howls of protest so that he undoubtedly wanted to handed it off to Cheney.

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    The team leader thing is also interesting, for already a number of mistakes have been made that were passed off on cabinet members. It is well to remember that Bush describes the most important quality for a member of the administration as loyalty, that is loyalty to him. This is not the sign of a knowledgeable confident man.

    As expected, all of the motion has been in the direction of support for business. He is pushing defense spending, oil exploration, easing environmental restrictions, pulling back on anti-trust, putting hard right people in all the government agencies, etc. He even seems to be pulling back on education in so far as it involves spending money.

    While the polls are reasonably favorable, there is evidence of a widening feeling against Bush. It is not just environmentalists, but the dreadfully cocky overbearing public speaking style is a turning people off. I know many who say they can’t listen to him, the speeches are simply deplorable. Reagan used the good guy approach, but in Bush’s case what comes through is the elitism, the selfishness, the absence of a link to the common man.

    I predicted that his arrogance and lack of feel for the public interest would get him into trouble, and now trouble has arrived. Here we have a 50-50 senate, which anyone else would have approached tenderly. Perhaps encouraged by the ability of the party to strong arm Republicans who were not happy with his program, especially the tax cut that went mostly to the rich, Bush attempted to ramrod his program through the Senate. Already there are defectors. Now we have the Jeffords situation. Bush tried strong arm tactics, and, appalled, Jeffords has bolted the party. Not normally a sensational deal, but hugely important in a 50-50 situation. All of a sudden, Cheney no longer controls the Senate, thanks to the arrogance of his boss. Nothing is more likely to get you into trouble than arrogance, and Bush has it in spades. I think it is so ingrained that even this setback will not temper the problem.

    Clinton was criticized for governing by polls. That is not such a bad thing when the alternative is decision making by people who have little interest in popular causes, who show not a grain of human kindness.

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  • Enron – January 2001

    This chapter was written long before the Enron debacle came to light, in fact it is about the inevitability of Enrons because of wholesale cheating to boost reported earnings. Enron was not the exception, it was the rule. Enron undoubtedly passed the line and broke accounting rules, but the majority of publicly held companies push as close to the line as possible in order to enhance reported earnings. Arthur Anderson, its auditor, is not a rotten apple, all the major accounting firms aid and abet the process of overstating earnings.

    Solutions do not lie with cleaning up the accounting profession, it is the source that must be attacked – the tremendous payoffs corporate management derives from stretched accounting.

    Will the sensational disclosures lead to a clean up, or will the affair blow over with a few revisions to the rules for 401K plans? I am not optimistic. Enron points out once again the overwhelming power of aggressive corporate management to use company funds to benefit themselves. Sound rules carried out in a vigorous manner can solve the problem. Accountants will give us honest figures if freed from the pressure of management wielding big money for compliant manipulation. Enron paid Arthur Anderson $52 million for accounting services in 2000, $25 million just for auditing, a figure topped by only a few other and much larger public companies. That kind of money buys a lot of cooperation. The answer to the mess is truly independent auditors, both in setting rules and enforcing them.

    I am utterly fascinated by Enron. A day never passes without at least two new revelations. Its tentacles are so widespread that new chapters will be unfolding for a long time. This is a much bigger story than realized. The war is a tiny affair in comparison because Enron and America are about business. Enron brings into focus many deeply troubling problems that have been swept under the rug by the long bull market.

    Enron says a lot about what is wrong with the stock market, for its revealed evils are not at all uncommon. Too many public companies are managed to elevate the stock price, rather for the long term good of the enterprise and the economy. The result is unwise activities that boost earnings over the short term, bad acquisitions, restructuring to erase past mistakes, manipulative accounting that makes investing a guessing game, and an immense waste of capital resources in frivolous ventures. There is a lot more to running a company than hyping the stock.

    Some of the revelations about Enrons accounting are mind boggling. Even more amazing is that many are legal, and therefore in common use. Arthur Anderson, Enron’s accountant, is no different from the other big accounting firms. They are all thoroughly enmeshed with management in exaggerating reported earnings in an effort to elevate stock prices. Every knowledgeable person is aware of this scandal, but no one wants to think or do anything about it for fear of hurting the price of their stocks. Now the mess is out in the open.

    Why not start at the top. George W. Bush had no qualifications for the presidency, he was selected by big business because as governor of Texas he demonstrated political skill and unqualified support for business. He was elected on big corporate money, though not bought, for he is wholeheartedly their man. The question for his presidency was going to be, can big business run the country? Enron says the answer is no. Destruction of the surplus with tax cuts crowded into the high brackets says no. Give Bush the benefit of the doubt, though, the jury is still out on big business’s governmental management talents, but the signs coming out of Enron are not encouraging.

    Next, there is Congress. Enron was built on stock hype and bad accounting. The accounting profession was well aware of spreading misrepresentation, and its governing bodies tried to slow the trend. In the crucial decisions, notably accounting for stock options and separation of auditing and consulting, reform lost because of the intervention of campaign contribution stuffed senators and congressmen. How could these people intervene where they had no expertise when the rule making bodies were doing the right thing? Because corporate management paid them to. The connection is being made between business excesses and campaign contributions.

    At yet another level, Enron demonstrates the dreadful practices that overwhelmed leading investment banks. These people are willing to finance anything they can get away with simply because the fees are large. In Enron’s case they raised the money to support many of the fraudulent partnerships and offshore entities that covered up the company’s true condition. They sold a large institutional placement offering information on the company withheld from stockholders, probably illegally, though judging by the subsequent results, the treasured information should have alerted buyers to stay away. A major commercial bank/investment banker provided a vehicle for hiding losses from recent annual reports. Why did bankers engage in these probably illegal activities? The answer is huge fees, just as with underwriting hundreds of dreadful high technology and internet IPOs. They sold manure through unqualified boosting. Lacking full disclosure, deals that violated the intent of the securities laws became everyday. To an extent investors deceived themselves, but they bought the reputation of the underwriters and the hype they provided more than the companies themselves.

    American capitalism works because of a blending of the free market and government regulation. Left unfettered, the free market gets caught up in intense greed and self- destructs. Karl Marx was about the inevitable self-destruction, except Marx was wrong because government stepped in and controlled the instinctive unfairness in the free market. We operate under a delicate balance between the free market and government regulation that swings back and forth. The free market self-destructs, the government steps in and over-regulates, then the free market regains its energy and outwits government controls, only to once again self destruct in its excesses. The end of the great bull market and the Bush election probably mark the high water mark for the up phase of the free market. Now that its bad aspects are revealed in all their ugliness, the pendulum will swing back toward government control. The problems are profound and the swing to more control will take time, especially with the Bush administration manning the free market ramparts.

    Many of the best minds on the market think stocks will go no where for a good many years until pricing returns to reasonable levels. Those of us who felt the market was reaching a long term peak a couple of years ago did not know what forces would end the long rise. Now we know – bad corporate practices arising out of the market’s own excesses. A flat market will be supported by modest earnings growth, making extreme overpricing stand out. Improved accounting standards will be a force holding down earnings. A slow period for the market will be helpful, as all would be forgotten if we once again entered euphorialand.

    One of the most intriguing questions arising from Enron is why otherwise respectable people use manipulative accounting. The answer is the tremendous incentive in stock options. Options allow management to become extremely rich in a short period of time. We are going to find that twenty or so people at Enron became very rich on options. The present secretary of the army, a former Enroner, was a second line executive who became an eight figure multi-millionaire as the second in command of a division that was guilty of gross figure manipulation. Apparently his job was sales and he did not know the ridiculous accounting tricks being played with the long term energy contracts he brought in. Is it comforting to know that one of Bush’s cabinet members was too dumb to understand what was going on in his own division? He stretched out his sales of Enron stock, required by his government position, so clearly he was ignorant of the gimmickry. Bush shares that kind of innocence. If Clinton’s number one backer had come out as has Enron with Bush, everyone would be screaming because of knowing he had probably given something in return. In Bush’s case, his standard bewilderment about anything complicated makes it easy to believe he failed to understand the implications, particularly when catering to big business is what brought him the presidency.

    There is little appreciation of the extent to which management of public companies has been stealing ownership out from under stockholders. In the more popular companies, options often represent 30% of outstanding shares. Counting already exercised options, management and employee shares can end up representing over 50% of ownership on a free ride. Management gets away with this theft because options, while obviously a form of compensation, never appear as an expense on the income statement because of a special exemption earned through congressional intervention. In addition, Enron, Cisco, Microsoft to a large extent, and practically all high technology companies because of their particular abuse of options, have never paid income taxes because they are permitted to take options as an expense at the highest valuation.

    The option system is crazy. It encourages earnings enhancement because even a temporarily high level for the stock can fix management up for the rest of their lives. The set up involves no risk and no investment, because the stock is usually pay for simultaneously with cashing in the exercised options. Being fully aware of the hype that elevated the stock, management is in position to make timely purchases and sales. While options are supposed to be an incentive for good management, in fact they are just the opposite. The popular slogans, pay for performance and aligning management and shareholder interests, are baloney. One of the subtler entanglements coming to light through Enron is the role of boards of directors. Why have boards allowed management to get away with huge stock option awards, a highly anti-stockholder form of compensation? The answer is that management buys their cooperation through large fees, stock options, and inclusion in company pension plans. The total package is so fat that directors would be acetic spartans not to follow management’s lead and forget their purported job of representing stockholders. Enron brings the highly conflicted position of boards of directors, and their decisions in favor of management and against stockholders, out into the open.

    On management’s part, the temptation to become very rich overrides fear of dishonesty, aided by many of the figure enhancing practices being perfectly legal. If you want to hear insistent pleas of innocence, don’t go to death row, listen to top managers pleading their devotion to Generally Accepted Accounting Principles. Management is no longer concerned about the day of reckoning that goes with bad accounting because restructuring allows the cheating to be erased.

    An interesting undertone to the corrective process is that Bush, ever catering to business interests, brought in as head of the SEC a man totally conflicted by being a leading SEC lawyer for big companies and accounting firms. He began to dismantle many of the progressive moves initiated by his predecessor. He reminds me of Joseph Kennedy, who FDR named as first SEC head under the theory it takes a crook to know a crook. Now Pitt, the new head, looks like a fool, so maybe he can turn himself around and stop protecting the thieves. The cards are face up on the table, and what used to be easy to get away with no longer is. Dick Cheney’s claim that he was only consulting the experts in dealing with oil executives while drawing up energy policy might have been accepted a year ago, now it is greeted with the guffaw it deserves. Suddenly we appreciate the extraordinary greed that has overtaken corporate culture.

  • Inauguration Commentary – January 2001

    The new president is greeted with glee by comedians, but his presidency may be a watershed event. Bush Jr, to a greater extent than any predecessor, is the man of business. Reagan was all for the free market, but he was an idealist able to believe wacky ideas like voodoo economics and star wars. He never followed through on reducing the size of government. Father Bush, we forget so soon, was seen as an empty man lacking idealism. He was a competent administrator who saw the need for reducing the deficit and lost Republican support by raising taxes. Unfortunately, he had harped on no tax increases to get elected and going back on his word created the impression that Bush senior did not stand for anything.

    Not so Dubya, he stands for something – unqualified support for business. Bush has sought to identify himself with education, a nice comfortable political issue, but education is a sideline. The central theme of Bush’s rule in Texas was support for business and that support is what got him elected. Business leaders picked him out as their man and provided the largest pot of money in the history of elections. He was not bought, he is a true believer that businessmen should run the country. Bush will pay absolutely no attention to McCain’s election reform effort. He is the big business candidate McCain’s program is specifically aimed at.

    The cabinet appointments prove the point. Start with treasury, a businessman. Look at defense. Rumsfeld is a known supporter of increased defense spending, a powerful business issue. Bush talks about raising soldier pay, but the real support will be for new weapons. Our defense contractors sold so many advanced weapons overseas that we apparently need new ones to counter all those now in the possession of foreign powers. The appointment of a general as secretary of state (if he weren’t black we would all be shaking our heads at a general in this position) would seem to further the point.

    The lesser appointments are more revealing. The original labor nominee, Chavez, is a union basher and critic of the minimum wage. Could corporations wish for anyone better. Energy: the qualification here is that the new secretary has championed closing the department. Interior: the lady’s only known position is opening up government lands to business. The most subtle is Christy Whitman as head of the Environmental Protective Agency. This may seem like a reward to a fellow member of the eastern establishment, but not so. Whitman’s predecessor introduced one of the most comprehensive environmental programs of any state and she simply disbanded it. Who better to run the EPA in the interests of business.

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    As for Justice, look for a dismantling of the anti-trust effort of recent years. Ashcroft’s own views are less interesting than the fact Bush would pick someone so far to the right (he did owe them a big one for repulsing the McCain bandwagon in South Carolina). The SEC – look for it to be turned over to Wall Street (an established Bush trick is turning a regulatory agency over to those being regulated) and some of the activist Levitt initiatives reversed.

    The takeover of government by corporations goes beyond cabinet appointments. Business representatives, CEOs, lobbyists have swarmed the transition office seeing that sub-cabinet and other positions fall into friendly hands.

    As to Prime Minister Cheney, we are so relieved to have a solid experienced man to shield us from an in-over-his-head Bush that we forget his far right views and the fact that he picked these people.

    Bush endlessly talked of being a healer, but the cabinet appointments reveal the emptiness of his views on bipartisanship. Disguised by ethnic and gender diversity, the Bush appointments are blunt in-your-face moves from a man supposedly placed in a conciliatory position by the questionable nature of his win. His actions demonstrate the extend to which he is unalterably allied with big business, not the most popular interest of the common man.

    The important question, will the alliance of business and the administration be good for the country? A few years ago the judgment would unquestionably have been no. Twenty years ago Bush would have been laughed at as a presidential candidate, now as the business president he is a product of changed times. Business has greatly increased its influence in government and prosperity has never been greater. Starting off with a recession, or a severe slump, means that his timing is good. Over the short run, business probably needs a helping hand and Bush is going to provide it. For the stock market over the next year, we could not ask for a better choice.

    Longer term, the issue breaks down to the relative view of capitalism. The free market is seen by some as solving all economic problems and producing the greatest benefit to the greatest number. The rich may get an apparently unfair slice of the pie, but the poor end up much better off than under any other system. Certainly capitalism has proven itself in modern times. While the returns are mixed overseas because of centuries old cultural barriers, capitalism works in this country.

    So the issue isn’t capitalism, it is the degree to which capitalism compromises democratic principles. Communism did not come out of the old feudal serfdom, it came out of the industrial revolution and the exploitation of labor. Free market capitalism does give rise to unfairness. The rich become greedy, they never have enough. They use money power to accumulate more and lose their sense of justice. Monopoly is an inevitable corporate goal and monopoly slows progress and leads to higher prices, defeating the free market. Enthusiasts point out that the free market ultimately destroys monopolies, but it takes time and in a democracy we are unwilling to wait. The monopoly problem may be moot, for in the fast moving high technology international economy, establishing a monopoly is almost impossible, so the anti-trust laws may have become superfluous. The government beat Microsoft, but with the peaking of the PC, Microsoft is back in a fight for its life. But the problem remains – business means big corporations and big corporations exercise great power in an undemocratic manner.

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    The point is that the completely free market is not utopia, it almost instinctively goes astray. I think we face a serious problem at the moment because of the crazy, greedy, indiscriminate new issuance market brought to us by Wall Street. We are seeing the downside of overselling the market and driving stocks to ridiculous levels. More significant than the immense waste of capital is the false sense of wealth that may have put the consumer behind the eight ball. Greenspan’s efforts to control stock market speculation were directed at preventing just this situation, but he failed. On the subject of Greenspan, apparently he is close to Cheney, so he may be protected, but look for the Bush people to go after him, specifically with blame for the slowdown. Business does not like Greenspan’s powerful and moderating influence on the economy, it wants a free hand.

    In America we developed a government restrained capitalism to control the nastier, undemocratic practices that inevitably develop in a free market. The government is also an important partner in providing services that assist the free market to grow. The idea that government is always a hindrance is ridiculous. On the other hand, coming out of the New Deal, the need to counter the Russian threat, fears about a shortage of energy, the need for a central bank of last resort, and many other examples, government undoubtedly became too active in our lives. The environment needs protection, but the original cleanup laws of twenty-five years ago went too far. The influence of government in our lives has gradually diminished and that probably helped sustain the long prosperity of the 1990s.

    Although business recognizes the contribution of government, it can’t resist fighting to reduce that role. Business wants the roads, but it does not want to pay for them. Business has captured the keys to the regulatory safe and this administration will do whatever it can to eliminate regulation. Will they overdo it? Corporations are not noted for restraint when it comes to their self-interest. The cabinet nominations are evidence of a must-have-it-our-way attitude that gets corporations in trouble. A corporation can be run as an autocracy, the country can’t.

    The question is, will the business takeover be good or bad? I am a firm believer that government restraint is an important cog in the success of our form of capitalism and that given the chance business will go astray. But what do I know, maybe the unfettered market will provide new stimulus. That decision will not be made in the next four years, this is a long term contest. The pendulum of relative strength between government control and the free market has moved in favor of the free market. The result is big business flexing its muscles as never before, but that swing may be reaching a peak.

    You can’t help but admire Bush’s don’t give a damn attitude, but in a democracy a business president probably holds a bad hand. I am disturbed by the constant talk show spinmeisting that this is the greatest cabinet ever, when it clearly lacks in distinction. This may reflect a defensive foreboding among Republicans about the cabinet, or an effort to obscure what this group actually stands for.

    The majority of voters believe in government and anyone letting the big corporations run wild may be placing himself in an unelectable position. But maybe not. Business is on top and the majority of Americans are stockholders with a more benign view of big corporations. Business will never have a better chance to prove it can lead. The next four years will be fascinating for students of capitalism.

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  • To the readers of my notes on George W Bush – November 2000

    By the time some of you read this, the game will be over. One of the ideas of my notes was that Bush’s emptiness should have made him an easy opponent, but in the home stretch he seems a sure winner. What happened?

    I think Gore ran one of the most pathetic campaigns in history. He got himself tied up in policy, in pandering to every voter, and missed his best theme: Bush’s weakness.

    I could watch the debates only briefly, they were too pathetic. Bush’s shortcomings stood out clearly: his lack of grasp of programs, his inane rambling about lifting the nation’s spirits, compassionate conservatism, and so forth. But his weak performance was overwhelmed by Gore’s pomposity, his obnoxious condescension, his gratingly constrictive style, his overemphasis on his own policies that seemed to rob him of the insight to throw Bush’s lies and prevarication back in his face. He was constantly talking about the differences in their policies rather than taking advantage of openings to blow up what Bush said. Bush does have a personal touch Gore completely lacks and it came through. Gore always seems scripted, which makes his policies seem opportunistic rather than real. Thus, while Bush lied much more than Gore, he still seemed the more honest. In this case, his lack of a clue worked in his favor.

    Bush’s favorite line has been about leadership, “you’ve got a leader on your hands!” Of course leadership is the one thing he has never displayed, except as an Andover cheer leader. Bush engaged in a good bit of demagoguery and got away with it. Much of his trash was effective because Gore had no response except back to his boring policies. Gore was afraid to talk about being one of the best VP’s ever, afraid of any relationship with Clinton, afraid even to offset Bush’s claim about nothing happening in Washington in the last eight years by pointing to the obvious target, the Republican congress. Gore left out the record, where he is strong, because it was associated with Clinton. Then all the new stuff made him seem like a bleeding heart liberal.

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    I don’t understand why Gore was unable to respond to the Bush trash talk. Did he want to be honorable and not get into personalities? Bush is weak on policy, so that seems a logical target, but the personal stuff is Bush’s greater weakness. Gore seemed determined not to engage Clinton, but Clinton might have been brilliant skewering Bush. He is such an inviting target and Clinton is such a clever fellow.

    I have to admit to a churning stomach when seeing Bush on TV late in the campaign. He is so aggressively confident now, so fixed on himself. He thrusts his chest out and delivers the empty lines as if they were terribly important. The only positive thing is that the next four years are going to be entertaining, where they might have been dull with Gore. Will the arrogance of birth and position, now fed by this amazing triumph, ruin his presidency. Nothing is more deadly than arrogance.

    The most surprising aspect of the campaign other than Gore’s incompetence is the Bush demagoguery. I noted above my inability to listen to Bush without a sinking feeling. In thinking about it, what gets me is this. It is not so much the emphasis on nothing issues like education (a pitty patty issue everyone is for), tax cuts, social security (so impractical and economically ruinous there isn’t a chance of it happening), dignity in the White House (come on), misrepresenting his position on medical assistance, it’s the way he says it. It’s loud, its chanting, its emotional. Even the voice inflections change depending on whether he is talking in the east or the west. What is he doing?

    I am reading a new book on World War II and in the chapter on Hitler, there it is. Mein Kampf explains that the basis of political power is emotional support from the masses. The strength of a national leader depends on the ability to seize and manipulate emotions. Policies don’t matter, stirring the crowd does. Bush is not talking to his base constituency, Wall Street and the relatively well off, he has been after the masses and the style is Hitler. It shows in the increasingly obvious self-confidence, the strutting, the incredible “you’ve got a leader on your hands.”

    If he is getting visions of greatness, he may not do what the average thinking supporter, who lacks faith in his ability for good reason, wants him to do: sit back and leave the governing to well-selected appointees. This presidency could get much more interesting than I thought.

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  • Thoughts on George W Bush November 2000

    By the time some of you read this, the game will be over. One of the ideas of my notes was that Bush’s emptiness should have made him an easy opponent, but in the home stretch he seems a sure winner. What happened?

    I think Gore ran one of the most pathetic campaigns in history. He got himself tied up in policy, in pandering to every voter, and missed his best theme: Bush’s weakness.

    I could watch the debates only briefly, they were too pathetic. Bush’s shortcomings stood out clearly: his lack of grasp of programs, his inane rambling about lifting the nation’s spirits, compassionate conservatism, and so forth. But his weak performance was overwhelmed by Gore’s pomposity, his obnoxious condescension, his gratingly constrictive style, his overemphasis on his own policies that seemed to rob him of the insight to throw Bush’s lies and prevarication back in his face. He was constantly talking about the differences in their policies rather than taking advantage of openings to blow up what Bush said. Bush does have a personal touch Gore completely lacks and it came through. Gore always seems scripted, which makes his policies seem opportunistic rather than real. Thus, while Bush lied much more than Gore, he still seemed the more honest. In this case, his lack of a clue worked in his favor.

    Bush’s favorite line has been about leadership, “you’ve got a leader on your hands!” Of course leadership is the one thing he has never displayed, except as an Andover cheer leader. Bush engaged in a good bit of demagoguery and got away with it. Much of his trash was effective because Gore had no response except back to his boring policies. Gore was afraid to talk about being one of the best VP’s ever, afraid of any relationship with Clinton, afraid even to offset Bush’s claim about nothing happening in Washington in the last eight years by pointing to the obvious target, the Republican congress. Gore left out the record, where he is strong, because it was associated with Clinton. Then all the new stuff made him seem like a bleeding heart liberal.

    I don’t understand why Gore was unable to respond to the Bush trash talk. Did he want to be honorable and not get into personalities? Bush is weak on policy, so that seems a logical target, but the personal stuff is Bush’s greater weakness. Gore seemed determined not to engage Clinton, but Clinton might have been brilliant skewering Bush. He is such an inviting target and Clinton is such a clever fellow.

    I have to admit to a churning stomach when seeing Bush on TV late in the campaign. He is so aggressively confident now, so fixed on himself. He thrusts his chest out and delivers the empty lines as if they were terribly important. The only positive thing is that the next four years are going to be entertaining, where they might have been dull with Gore. Will the arrogance of birth and position, now fed by this amazing triumph, ruin his presidency. Nothing is more deadly than arrogance.

    The most surprising aspect of the campaign other than Gore’s incompetence is the Bush demagoguery. I noted above my inability to listen to Bush without a sinking feeling. In thinking about it, what gets me is this. It is not so much the emphasis on nothing issues like education (a pitty patty issue everyone is for), tax cuts, social security (so impractical and economically ruinous there isn’t a chance of it happening), dignity in the White House (come on), misrepresenting his position on medical assistance, it’s the way he says it. It’s loud, its chanting, its emotional. Even the voice inflections change depending on whether he is talking in the east or the west. What is he doing?

    I am reading a new book on World War II and in the chapter on Hitler, there it is. Mein Kampf explains that the basis of political power is emotional support from the masses. The strength of a national leader depends on the ability to seize and manipulate emotions. Policies don’t matter, stirring the crowd does. Bush is not talking to his base constituency, Wall Street and the relatively well off, he has been after the masses and the style is Hitler. It shows in the increasingly obvious self-confidence, the strutting, the incredible “you’ve got a leader on your hands.”

    If he is getting visions of greatness, he may not do what the average thinking supporter, who lacks faith in his ability for good reason, wants him to do: sit back and leave the governing to well-selected appointees. This presidency could get much more interesting than I thought.