Balance

Every leader must reach some sort of balance in the areas in which they are trying to lead. These leaders must also reach some sort of balance between the areas in which they are trying to lead.

I am not arguing that the leader should not have his or her own position within a given area. I am not arguing for wishy-washy compromise. I am not arguing for an un-grounded pragmatism.

What I am arguing for is for a leader to strike an appropriate balance of competing forces not only within a given area of interest but also between areas of interest. Notice too that I said “an” appropriate balance…not “the” appropriate balance. In addition, there is another point of contention as well. The balance that is achieved in various areas and between various areas will change over time…a balance cannot be held onto indefinitely.

The problem is that in any important area (or even not-so-important areas) of interest within the scope of a leader’s responsibility there will be competing positions…even within the group of people that are the leader’s closest allies. The same will be true when it comes to discussing priorities between areas of interest. There will be many competing positions…and those that may be allies in one area may be opponents in another…and so on.

And, within such an environment it is so important to remember that you may have to count on someone on a very, very important issue even though you fought tooth-and-nail against that person on the last thing you worked on. Even though people may oppose you there is a very good chance that sometime soon in the future you will be working with the very same person.

Achieving balance is important even if there are only two competing ideas within an area of interest. It is very seldom a winner-take-all situation. In many cases, you will be working with the “other side” in some capacity in order to carry out the goal that has been decided upon. Whether it be in government, or business, or in friendships, or in families…once a plan of action has been decided upon…it is necessary for those involved in the discussions to bind together in order to make something happen. The “winning” side is not the one that must move forward and execute the plan.

It, of course, becomes that much more difficult in the usual situation when there are multiple positions that have to be reconciled. People still have to go forward. They have to act and must avoid some form of paralization that could occur if some of the parties involved decide to opt out of the effort. Balance must be achieved so that people feel that even though they may not have gotten all they wanted in this situation that there is a good chance they may achieve more of what they want in another one.

Furthermore, as mentioned, care must be achieved in reaching a balance between different areas of interest. Here there may be more a notion of priority setting…we can do this now…but, we can only work on that thing partially at the present time…and we will have to wait a year or so before we can get to the other thing. Again, balance has to be achieved because you want to achieve a whole portfolio of objectives and not all of them can be attained at the same time. Thus, plans must be made for how the different areas will be addressed in what order and so forth.

Again, the leader will have to deal with shifting sand in terms of those that they are working or will work with on some issues, who will not be so warm to other areas and to those that they will be working with on different areas in the future. Everyone is a potential ally…and everyone is a potential foe. But, in one way or another, all of these individuals must work together in some form, on some issues, at some time in the future.

Having written this, I must go ahead and strongly emphasize two very, very important things. First of all, arguing as I have does not mean that you don’t have strong feelings about the different issues that you will be dealing with. On the contrary, it is very important that the leader have strong ideas…and it is crucial that the leader have a strong sense of who they are…and it is also a requirement that the leader feel comfortable within their own skin. That is, not only does the leader know what he or she stands for but it is also important that they know themselves and are unified and whole within their own person.

The further the leader is from this ideal the less confident they are in their ability to lead. And, the further they are from this ideal, the more they seek certainty of opinion and control over the chaos that is swirling around them. A leader with this shortcoming wants only people around them that agree with them and demand that these people be loyal through thick and thin.

A leader like this is not really a leader and will, in almost every case, fail in what they set out to do.

Second, it is not a weakness to work for balance. Reaching an appropriate balance is a secret of success. Achieving an appropriate balance is the way to build strong teams that can accomplish what they set out to accomplish. And, even though different combinations of individuals or groups may make up the team the sets out to attain another objective, the balance that is achieved within each team and between teams is vital to gaining more successes than fewer ones.

It takes a strong person who knows who they are to achieve an appropriate balance within a given area…and also between areas. Strong because they have to combine people and groups that also have strong wills. Strong because they have to lead people to work together. Strong because they have to convince people to postpone something they believe is very important until some time in the future in order to work on something right now that these people do not feel is as important as the other thing.

Barack Obama has said that he has learned quite a few things from President Ronald Reagan. I believe that one of the things that he learned from Reagan was the ability to attain balance when striving for various and sometimes contradictory goals. I don’t think anyone around would argue with the claim that Reagan had very strong views. But, he compromised to achieve balance. He sought supporters from all different positions of thought. And, he maintained friendships so that he could reach out to individuals in the future even though they might have had substantial differences on given issues in the present. In this way Reagan got a lot of what he wanted…not everything…but a large amount. By starting out with strong positions he was able to keep the balance in many areas tilted to his end of the spectrum…but, he gave in to many in order to keep the doors open and the discussions continuing. Reagan knew who he was, what he believed in, and was very comfortable in his own skin.

It is easy to pick on Bush 43 as the one at the other extreme. Bush 43 I would not call a leader. Bush 43 wanted certainty. He never worked for balance. And, he also demanded loyalty of those on his “team” above all else. I really never got a sense that he was really comfortable with himself. He wasn’t the “star” that his father was. He had very little intellect or talent. He “forced” himself to stop drinking and this effort of will was constantly in front of him as he “forced” his way through life. Objectives were either acceptable…or unacceptable…no in-between. And, he failed…with miserable incompetence…and almost everyone that surrounded him was tarnished in some way by the failure of his administration.

The main goal of a real leader is to achieve a sufficient balance in all that he or she is doing and with all the people that he or she is working with. Achieving such a balance is necessary if one is to be a successful leader…and achieving such a balance is a sign of personal strength…and inner wholeness.

Deliberative Government

President-elect Obama is pushing hard to formulate his economic stimulus plan and have it enacted at the earliest possible date. First, he was shooting for January 20, 2009, the day of his inauguration as President of the United States. Then he was aiming for President’s Day in February. Now…there is a good deal of uncertainty.

The idea of an economic stimulus plan is popular with the people of the United States. It is also popular in Congress. But, Congress is a deliberative body…and…this raises the level of uncertainty of when the package will be passed and signed into law.

We have just experienced this past fall when Congress was stampeded to act…we even had a panicked Federal Reserve Chairman Bernanke tell Congress on a Friday evening in September that the bailout package had to be passed the next Monday or “all hell would break loose.” And, so Congress gave up some of its deliberative power and moved quickly…although not as quickly as the pale and frightened Bernanke called for.

And, Congress has been regretting the quickness with which they passed the bailout bill ever since. Basically, Congress gave Hank Paulson, Secretary of the Treasury, and the Treasury Department a blank check with not controls and no oversight…at least for only $350 billion of the package. And, Congress…and apparently the Treasury Department…has no idea where the $350 billion has gone and how it has been used. It is, apparently, just gone!

Action like this is expected when there is a royal head of state or a dictator. That is, a dictator or a tyrant can change his or her mind on the spot and move this way or that way on a whim. The founders of the United States did not believe that this was a good idea. The policies and programs of a government should be discussed and debated and lingered over…and not just rushed into. There should be some “conservative” element within the government so slow down the process and get all sides of the issue a chance to be resolved. The founders created Congress to slow things down and muddy the waters.

Of course, there are times when decisions must be made in relative quick fashion…but, even issues that require relatively quick action can stand some time for reflection. Obviously, a balance has to be reached between rapid decision making and deliberation, but the general idea of the founders was that a country should err on the side of deliberation rather than on the side of hasty decision…frustrating though it may be.

Coming back to the present, I believe that the United States government, Congress, should err on the side of deliberation on the stimulus package. We are talking about a lot of money…and for a relatively long time frame.

We are talking about federal deficits of $1.0 trillion or more, not only this year…but next year…and the year after that…and so on…

We are talking about how much of this debt will be monetized…this year…next year…and so on.

Some are even talking about the United States becoming, financially, like a banana republic.

Yes, there are potentially real dangers on the other side. The economic slowdown could become an economic collapse…a second Great Depression.

But, there is no indication that the stimulus package will do what many are saying it will do. There is uncertainty about the combination…increasing spending or producing tax cuts. There is uncertainty about the speed at which programs can be implemented. There is uncertainty about whether the proposed spending will even have the desired effect of stimulating other spending. There are further questions about the ability of the financial system to support the large package.

Deliberation must take place! Even though the situation is serious…we cannot be rushed into this without discussion, debate, and contention. Yes, we want the result to be supported in a bi-partisan way…but this may not be fully possible. However, we want those that are not in favor of the stimulus program to be able to fully express their concerns.

There are too many concerns surrounding the whole situation to move precipitously.

Bernanke panicked the Congress in September to move hastily on the bailout package. There are many, many regrets about this. And, the feeling is that maybe Congress really did not have to move so quickly.

In my experience, many decisions that seem so urgent at the time they occur can really be reasonably postponed. Again, this is a judgment call so the answer is not cut and dried. Still, I have found that it is good to slow down and discuss things in most cases. This leads to a consideration of more alternatives and results in better decisions in the end.

I believe that the founders of the United States were correct in their wish to have this “conservative” element built into the structure of government. We need to take some time to examine issues and the potential solution to the problems the issues contain. We need a deliberative body that will do its work…deliberatively.

Let’s give Congress some time to consider the Obama stimulus plan. Let’s not be rushed into a program that has been hastily conceived and forced through into law by the new administration.

As that world famous philosopher Winnie-the-Pooh said, “A thought may sound very thingish when it is inside your heard, but it may not sound thingish at all when it gets out into the air.”

Let’s follow the advice of Winnie-the-Pooh and get these ideas about the stimulus plan out into the air and see if it is thingish or not!

Improvers

I have just finished the book “Empire of Debt” by William Bonner and Addison Wiggin. I won’t focus on much of the content of this book for I am doing a book review on it for Speaking Alpha and the reader should go there for a discussion of the book, itself, and its major thesis. What I want to concentrate on in this post is the authors disdain for people they refer to as “improvers” and the problems these people can create within a democratic form of government.

An “improver”, as defined by the authors, is someone who wants to make improvements to the world…wants to impose his or her view of how the world should run on all of the rest of us. Of course, politics within a democracy is a perfect venue for “improvers” to show their wares.

One can get a taste of what is meant by an “improver” by checking out Bonner and Wiggin’s “Hall of Shame” as well as their “Hall of Heroes.” To them, the stars of the United States Presidents they list as villains are Lincoln, Wilson, Franklin Roosevelt, Nixon, and Bush 43 and so on. The heroes that stand tall in their book are James Garfield, Chester Harding, Calvin Coolidge, Millard Fillmore, and their personal favorite Warren Harding.

Just waiting to enter into this “Hall of Shame” is Barack Obama…just his proposals, even before taking the oath of office, are enough to bring down the abuse and ridicule of these two authors. President-elect Obama wants to make the world better for others. What a joke! What a crock of …well, you name it.

And, it is just this attitude that is walking…no, now, running…no, now, sprinting…down the path to the doom of the empire. In short, the American empire has been built upon the shaky premise that foreigners will continue to finance the debt of the United States forever and will continue, through thick and thin, to keep faith in the strength of the almighty United States dollar.

How much debt is the Obama administration going to add to the total United States debt outstanding?

Trillions and trillions of dollars!

But, this is not the focal point of this post. The focal point is on Bonner and Wiggin’s definition of “improvers” and the role that “improvers” play within a democratic framework of empire. Empires, to Bonner and Wiggin, keep their people happy and distracted by giving the masses “enemies and circuses”. That is, the thing that keeps an empire going is the diversion of its people. And, a democracy, according to the authors, is just perfect for the exploitation of the people.

Empires have always existed upon imperial interests, which mean that there are always wars on the periphery. The twist of the modern day imperialist is that they “pretend all manner of selfless and world-improving motives, every one of which is either an obvious fraud or a monumental bamboozle.” The authors go on to say that “The gist of the modern empire builder’s creed is that he has a duty to make the world a better place, and he can only do it by telling other people what to do.”

Empires need enemies…and isn’t it just convenient that when the modern empire takes on an enemy it is often done to bring liberty and democracy to the people it is fighting for. Perhaps, Bonner and Wiggin argue, one of the most difficult periods for the American empire came after the fall of the Berlin wall and the collapse of Communism because it left the United States government with no “bad guy”…no enemy. Thank goodness, they continue, for 9/11 because it gave the empire a vague, world wide enemy, the terrorist, that it could combat endlessly and without constraint on cost. Just what the empire needed to continue.

But, just as the empires of the past, these excursions cost lots and lots of money. In the past the empires extracted the funds to pay for their adventures from the defeated. The modern empire, the wealthy, prosperous empire, the empire that does not do its own saving, borrows from the poor of the world…those nations in which their people actually save.

So much for wars…now for circuses. The modern day circus, to Bonner and Wiggin, has to do with the promises and dream worlds which politicians in a democracy offer to the electorate. These promises and dream worlds can never be achieved and many attempts at attaining them leave those whose votes are solicited by the politicians worse off. To get elected, therefore, the politicians engage in lies and outright fraud. But that is the way of the modern world.

And, what is promised? Full employment. No financial pain. A home of their own for everybody. And, so on and so forth.

And, who is going to pay for the delivery of all these programs and policies?

Bonner and Wiggin tell us…China, India, Brazil, countries in the Middle East…and others in the less developed world…who save some of their income.

I keep getting off-the-point. Democracy gives “do-gooders” (those that want to make the world a better place to live based upon the knowledge the “do-gooders” have about how the world works and what should be done to make the world a better place to live in) the opportunity to make the world a better place to live in. And, so we get the modern empire…America in the 21st century.

The obvious thesis of Bonner and Wiggin is that the world would be a lot better place if there were fewer “improvers” or if the “improvers” were taken for what they are, in the authors words, frauds and cheats. They believe that people need to stick to their own business, be humble, and work hard. They believe that grandiose ideals and plans can only lead to trouble. They believe that the United States did pretty well until that incompetent fake, Woodrow Wilson became President.

Europe knew that Wilson was a fraud and laughed at him. They used him and then abandoned him and his ideals on how the world should be built. Yet, Wilson became the model for the many activist Presidents that came after him starting with Franklin Roosevelt. And, as they say, the rest is history…the history of the American Empire.

As we stand here on January 10, 2009 on the edge of financial chaos we need to develop an answer for the criticisms of Bonner and Wiggin or we need to be very afraid. The debt of the United States is going to expand dramatically over the next few years.

Who is going to finance all these trillions and trillions of dollars of American debt? Is the only way to finance this debt to monetize it? To print paper money or to electronically generate money?

Who is going to want to hold the United States dollar? The dollar lost 40% of its value between the start of 2001 and August, 2008. Will it lose 40% more? Or, 80% more? Or, 100% more?

Is this where the “improvers” have brought us?

Bonner and Wiggin believe so.

What Conservatives Are Saying Now!

The United States is coming into 2009 having established one of the largest moves to socialization in the world. The prospects for the future do not provide any encouragement for this move to slow down!

The United States has moved into a new era…and who would have thought that it would be the Conservatives in America that created the environment for this to happen.

The Conservatives were always the people who believed in discipline…of not living beyond ones means and capabilities. Yet, it became the Conservatives that led the way to uncontrolled and irresponsible behavior…on the part of the government…and on the part of the private sector.

When did it start?

When Nixon claimed that “We are all Keynesians now!”?

Did this lead to the policies of Ronald Reagan who promoted Supply-Side tax cuts that led to large deficits that went on and on?

And this led to Bush 41 and Bush 43 and their undisciplined fiscal behavior?

The Republican Party…like most parties…is a conglomerate of groups with disparate or even conflicting positions. But, Nixon drew up the new boundaries of the party and created the new culture at the top. And, what were these new boundaries?

I would like to concentrate on three: making the Republican Party the party of the South and the religious conservative; the move to fiscal and monetary irresponsibility; and the emphasis upon loyalty to creed as the primary criteria for membership.

There is no question that the Nixon “Southern Strategy” became the foundation of the ‘new’ Republican Party. Lyndon Johnson basically disenfranchised the South with his policies on civil rights and welfare. These programs completed upset the social stratification of the South and caused many citizens of that part of the country to look for a new home.

Richard Nixon provided them with that new home. But, in doing so the Republican Party had to be open to two things…even if they were sublimated in all discussions concerning the party. These two things were, first, that the party had to accept the racist leanings of the Southerners that were brought in under the ‘big tent’, and, second, the party had to openly support a religious leaning that was more fundamentally orientated. Up until the late sixties, the Republican Party had been the home of the mainline Protestant denominations. That was to be no more…they were ‘too liberal’.

These two themes brought in the South and also appealed to more rural areas of the United States. This provided a background for ascending to the Presidency, but also to provide a strong bloc of support in both the Congress in Washington, D. C., and in state houses throughout the country. It also provided a funnel for future leaders of the Party.

The second boundary had to do with the economic policies of the Federal Government. Nixon was so paranoid about getting re-elected as President that he did whatever was necessary…the rest-of-the-world be damned. Consequently, the conservative policies of ‘hands off’, constraint, and discipline did not appeal to him. This made him susceptible to advisors around him…especially John Connolly…that led him in a totally different direction. That direction included ideas about ‘big government’, deficits in the budget, wage and price controls, and an easy monetary policy. And, the last item there was connected to the withdrawal of the United States from the gold standard that served as the basis for stable economic policies. Even Franklin D. Roosevelt did not dare get rid of this peg during the Great Depression.

Richard Nixon became a “Big Government” President opening the door for a succession of ‘Conservative’ big government presidents…like Ronald Reagan (a former Democrat), Bush 41, and Bush 43. And, “Big Government” for the Republicans included building up the military…for this was the patriotic thing to do. American was the leader of the free world and therefore it needed more and more resources for the military.

The problem with “Big Government” is that taxpayers in the United States will generally not support the taxes needed to run a big government so that the big government will have to be financed by selling bonds…or monetizing the debt. Nixon did both…but, to combat the possibility that inflation could get worse he also froze wages and prices in the economy.

Whoa ! ! !

The third boundary had to do with loyalty. Since the things discussed above became the ‘religious’ beliefs of the Republican leadership, adherence to the ‘religion’ became paramount…no matter how ridiculous the stance one had to take. Loyalty to the line became the most important criteria for membership in the leadership.

And, this loyalty transcended talent, ability, or experience. If you did not believe the way the Party did…you had no chance to help the Party regardless of how good or how successful you were. How else can we explain the incompetence of the Bush 43 administration? How else can we understand the ignoring of facts and of reality? How else can we explain the lies and the cover-ups?

In the past, the Conservatives were always the Party of reality, the Party of discipline, the Party of incremental movement.

I think that these Conservatives can now say…”We told you so!”

I think that these Conservatives can now say…”If you lose your discipline, you will eventually crash!”

I think that these Conservatives can now say…”Once you crash because you have lost your discipline, there are no good choices!”

I think that these Conservatives can now say…”There is only one way to ‘right the ship’ and that is by re-establishing your discipline!”

I think that these Conservatives can now say…”Re-establishing your discipline is VERY, VERY painful!”

The Split in America

Timothy Egan begins his Sunday Opinion column in the New York Times, “The Party of Yesterday”, http://www.nytimes.com/2008/10/26/opinion/26egan.html?scp=3&sq=timothy%20egan&st=cse, with the following description of the “nation’s brainiest cities…cities with the highest percentage of college graduates”: “These are vibrant, prosperous places where a knowledge economy and cool things to do after hours attract people from all over the country. Among the top 10 only two of those metro areas—Raleigh, N. C., and Lexington, Ky.—voted Republican in the 2004 presidential election.”

He continues, “This year, all 10 are likely to go Democratic. What’s more, with Colorado, New Hampshire and Virginia now trending blue, Republicans stand to lose the nation’s 10 best-educated states as well.” Going further he states that “Brainy cities have low divorce rates, low crime, high job creation, ethnic diversity and creative capitalism…They grow good people in smart cities.”

Although I don’t disagree with the conclusion that Egan reaches, that Republicans “blow off the smart cities” and the smart states which makes them “The Party of Yesterday”, I believe that there is a deeper cause behind this bifurcation. It seems to me that this separation is something that is being experienced worldwide and is connected with the spread of information.

Historically, we have seen that information spreads and its spread cannot be stopped. Nations and organizations and cultures can slow down the spread for a while but in the end the spread of information overcomes even the most restrictive of societies. The development of movable type allowed for the printing and dissemination of books and pamphlets to audiences never before reached and this resulted in societal upheavals like the Reformation, the Enlightenment, and Post-Modernity. As this and further innovations that allowed people to compare viewpoints and data that were kept isolated before, science grew and prospered along with many other fields of applied science and intellectual investigation. The Information Age is bringing the world to an even greater integration of thought as the spread of information reaches more and more corners of the globe.

Of course, this is not looked on favorably by many. The spread of information threatens ways of thinking, lifestyles, and people in power. The spread of information is disruptive and often brings with it an upheaval of ordinary life. The spread of information forces change!

Those in power that are threatened by the changes sense the danger of the “new” information and attempt to constrain its spread while at the same time engage in the defensive maneuver of requiring a stricter adherence to the “old” way of doing things. In this response there can be no openness to debate or dialogue for the leaders in power believe that they cannot give in an inch to different ways of thinking.

Beyond the leaders that are threatened by the “new” information, different people respond to this threat in different ways. Whereas some people welcome the change, even thrive on the “new”, others in various ways are wary of anything that is different or are just overwhelmed by the wave of the “new”. In one instance it is costly to change one’s life and thinking to accommodate the new information. In another instance the situation can be described as one of information overload: the new information is like “white noise” to people…they are inundated with too much information and are unable to process it. In either case, as well as others like it, many people resist what is happening because it alters what they know and are comfortable with.

This environment is making a major contribution to the separation that Egan describes in his column. Whereas he claims that the separation is occurring as the “brainy” areas of the country are divided from other areas of the country, I believe that the bifurcation is being exacerbated by the division between those that are receptive to the spread of information in the modern world and those that want to hold on to the old knowledge and the old ways of thinking.

The foundational “base” of the Republican Party is constructed more and more from just those that want to hold onto the “old way of thinking” and are resistant to the spread of information that is making the modern world such a dynamic place to live in. The objections that are being raised relate to the diversity of culture and of different cultures, the new discoveries in the biological and physical sciences, the innovations relating to information technology and the global application of this knowledge, the openness to alternative goals and objectives in the world, and the possibility that all worldviews, including theirs, could be fallible.

With the emergence of the modern Republican Party in the late 1960s, it became the common wisdom of the party that a candidate attempting to gain the nomination for President had to move to the right end of the political spectrum to get nominated. Once nominated, the candidate could then move toward the center in order to be elected. Early on, through the 1980s, the Republican Party had a sizeable portfolio of policies and programs that were sufficiently attractive to independents and other swing voters to attract them to vote for its presidential candidate. However, the Party had exhausted their portfolio of policies and programs by the late 1980s and into the 1990s.

Therefore, something new had to be tried. A young Karl Rove was able to resolve this dilemma. In the two Bush (43) elections, the Republican candidate for President stayed to the right in order to cement the base of the party. However, since the party had little or nothing to offer those in the center of the political spectrum Rove resorted to fear tactics in order to obtain the votes of the independents and the swing voters. In the age of 9/11 and the war on terrorism, the strategy proved to be successful!

A similar strategy has been followed in the current run for the presidency. John McCain was supposedly an independent, a maverick that appealed to those in the center. What he didn’t have was an appeal to the foundational “base” of the Republican Party. The campaign strategists filled this gap in a very satisfactory fashion, to their way of thinking, by getting Sarah Palin nominated for the office of Vice President. The problem with the strategy was that Sarah Palin was not acceptable to the swing vote and the election started to slip away from the campaign. McCain’s “maverickism” could not hold the center. In desperation, the managers of the effort moved to the old standby of the previous two campaigns…demonize the opposing candidate and scare the independent voter into voting for McCain.

Not only did the strategy not work, it exposed the intellectual emptiness of the Republican Party. It exposed the Party as being the party that was resistant to the future. It exposed the Party as being an organization that was not only resistant to the spread of information but as the party that wanted to constrain thought and hold onto old prejudices. It exposed the Party as being reactionary.

This is the problem America has to face going forward. In past years we saw this problem as one we faced externally in a world. Now, we see it as also a problem we have to face internally. For whatever cause, people everywhere resist the spread of information. People fight wars to keep information from spreading. It is not a new battle, but one that has been rejuvenated as those impacted have become desperate as they feel the world they know slipping away.

History shows that the resisters never win…but they can put up an inconvenient and troublesome fight. Those that support the spread of information ultimately win the battle by example…by showing others that, as Egan implies, they are good people living in a good place with room for all to join them.

Where McCain and the Republican Party now stand

This election has been a long road for me. Even though I left the Republican Party in the 1992 election, as the nominating season got underway in 2007 I was hopeful that there was at least one Republican candidate I could count on…possibly even two. I regretfully have to state…the Republican Party has definitely left me behind. I have never been so disappointed in people…Mitt Romney and John McCain in particular.

Last year as the political campaigns got under way I must admit to being particularly taken by Mitt Romney, former Governor of Massachusetts. I grew up in Michigan and was a big fan of Romney’s father…George Romney…and his mother…Lenore. I got the opportunity to work with George Romney in Washington, D. C. when he was the Secretary of Housing and Urban Development. I had and have a great deal of respect for the elder Romney and believe that he always had his heart and mind in the right place.

I thought Mitt would be like his father and his life story indicated that this might be true. He went from one success to another, Bain & Company and Bain Capital, the Winter Olympics, and his term as governor of Massachusetts. He seemed open minded and responsive to situations with strong moral character. He seemed to be a lot like his father. Thus, I supported him financially, as well as emotionally.

And, then he began his campaign. I could not have been more disappointed as I heard him in the early stages of the campaign…especially in Iowa. He seemed to be a different person, perhaps because he did not believe what he was saying…or perhaps because he had accepted views that he was just learning. Whatever, he was nothing like the strong pragmatic individual I had seen earlier, a person who had a firm moral structure within him. In addition, he was nothing like his father!

Let me digress here for a minute. In the last quarter of the twentieth century one of the major beliefs held within the Republican Party was that a person who wanted to receive the nomination to run for President at the head of the Republican Party had to move sharply toward the political right in the primaries before moving back to the center of the political spectrum for the general election.

Romney did this to an extreme. In Iowa, he didn’t sound anything like the person who had been Governor of Massachusetts. And then there was the Michael Hucklebee threat. Not only did Romney feel that he needed to move to the political right, because of Hucklebee, he believed he had to sound like a Christian fundamentalist! Adding to this was the fact that Romney, being a member of the Church of Jesus Christ of Latter Day Saints, being a Mormon, was a member of a religious body that was greatly distrusted by many of the evangelical Christians he was trying to attract. He even claimed Jesus Christ as his personal Lord and Savior and gave a ‘defining’ speech to lay out his religious beliefs. Romney sounded more and more like he really didn’t have any fundamental personal beliefs!

Romney lost the Iowa caucuses.

Worse than that…because of his pandering in Iowa he lost New Hampshire! At one time, Romney was well ahead of his competitors in New Hampshire. He was from neighboring Massachusetts and people in New Hampshire knew of him and liked him because of what he had done in Massachusetts.

And, at one time John McCain trailed Romney in New Hampshire polls by double digits and this was amazing because people in New Hampshire had always really liked McCain. But, McCain was basically ‘out-of-the-race’ because of his poor organization and the strained financial condition of his campaign. It seemed as McCain’s last try for the Presidency was dead on arrival.
Romney gave McCain his life back. Because of his pandering in Iowa, the people of New Hampshire turned against Romney. McCain re-organized and won the primary. McCain was back in business although still weak.

But, the other Republican candidates went on to self-destruct. Romney became less and less credible. Rudolph Giuliani followed a dreadful strategy which focused on Florida. And, in the end, the only one left standing was John McCain…the winner by default. A winner who was not trusted by the right-wing side of the Republican Party…who, at best, was received less-than-warmly by the evangelical Christian Right. McCain became the nominee of the Republican Party with only limited enthusiasm from the base of the party.

In order to explain the rest of this story let me just state up front that I believe that John McCain is one of the worst organizers I have ever seen at this high a level of ambition. The unfolding tale of his campaign is one of continual decisions that were questionable at their best and disastrous at their worst. But, the saddest part of this whole saga is that John McCain lost his direction and, in the process, lost his honor.

It seems to me that early on his campaign decided two things. First, McCain’s campaign managers believed that John McCain was loved by the center of the political spectrum for being a maverick and an independent thinker and the center would stay with him…especially if he were running against an extreme liberal. Second, his managers believed that it was important to command and energize the right side of the Republican Party, the side that was so lukewarm to McCain. The answer, they believed, was the choice of candidate for vice president…that person had to be someone of the political right that also appealed to the evangelical base. Furthermore, it would not hurt if that person were a woman…given that Hilary Clinton was not in the race anymore.

However, two things happened. First, the choice of the candidate for Vice President did fire up the right side of the Republican Party and its religious base, but, in so doing this individual over shadowed the candidate for President and dominated the news. Even worse, the vice presidential candidate seemed to drive away the independents and the people of the center that was the natural constituency of McCain, himself.

Here is where McCain’s political handlers hit the panic button. The choice of a vice presidential candidate held the political base of the Republican Party; but McCain was not supposed to lose his base in the process. Only half the plan was working.

The subsequent efforts of the McCain team represented a desperate effort to re-capture the center. And, how was this to be done? Demonize the Democratic candidate so that the center of the political spectrum would once again return to its preferred candidate…John McCain. This is the only way one can explain all the efforts the campaign to target Obama as a friend of terrorists, a socialist, a tax-and-spend liberal.

The problem was that the efforts to demonize the Democratic candidate didn’t work. In fact, if anything these efforts had the opposite effect and John McCain was now seen as a person who sold out to his right leaning handlers and had given up his honor and his dignity. He was not what we thought he was.

The right hand side of the Republican Party has come to dominate not only the primary season of the Party but also the Party in the general election. Unfortunately, it has swallowed up two men, who, in the past, seemed to be decent and capable individuals. It will continue to do this unless the Party loses badly in this election. But, more on this in another post.

What is Possible in the next Four (Eight) years?

“What to do about a country that isn’t prepared to participate adequately in its own rescue?” Robert Rubin, writing about the Russia of 1998 in his book “In An Uncertain World”.

All of the candidates for President of the United States are out talking with the people and describing to them the policies and programs they would like to enact if they are elected this November. The basic question that follows this ‘dance’ is, “What are the chances that this person, if elected President, would be able to carry through and implement these policies and programs?”

Right now, my answer to this question is “Little or none!” Until the current financial dislocation resolves itself and the new administration really gets serious about the strength of the United States dollar, the hands of the new President will be tied in terms of enacting new programs and policies. The situation is similar to the one faced by Bill Clinton when he became President in 1992. The Republicans had had control of the White House for twenty of the previous twenty-four years and so Democrats were very anxious to get back into the White House and enact some programs and policies that were more consistent with their way of thinking. However, this was not to be.

Fortunately, for the United States, President Clinton listened to Bob Rubin who advised him that the Federal Budget had to be brought under control and then kept under control. The reason being, Rubin argued, was that any whiff of fiscal irresponsibility on the part of the Democratic administration would be jumped upon by the international financial markets and the dollar would suffer the consequences. New programs and policies would have to be limited while the administration brought their fiscal budget into balance.

The result of this was eight years of almost continuous prosperity and growth for the United States economy and strength for the value of the dollar. Granted that the Clinton administration had received the gift of a tax increase on the part of the George H. W. Bush administration, a gift that helped propel Clinton into the White House, but this gift set the stage for the eight good years that followed. [Clinton DID return a gift to Bush 43 reciprocating the gift that had been given him by Bush 41: the form of the gift was a balanced federal budget and, in general, a very robust economy. Bush 43 has not been so generous to the President that will follow him.] But, prudent fiscal discipline and management also made a major contributed to this period of growth and prosperity.

In one sense, however, the new President that will follow Bush 43 is in a similar situation to the one faced by Clinton. The dollar has been declining for about six years. The environment created by the Bush administration over the past seven years is one that includes a lack of discipline and prudence with respect to risk management and has left financial markets and institutions in disarray. One of the first items on the agenda of the new President will be to restore confidence in the United States government and the United States financial system. This agenda item will affect all else that the President does.

What about the war in Iraq? Well, no new President may be able to take the United States out of Iraq in the near term. However, anything that is done there…and in Afghanistan… is going to be severely limited by what can be done within the budget constraints that will need to be honored.

What about health care…universal or not? Again, budget constraints may not allow anything of consequence to be enacted.

What about….? Same story…

Well, if this is the case, how long must the budget constraints be imposed? It took President
Clinton almost his whole term to bring the Federal budget under control. And, what is very important along the way…the new administration must not only show its intent to bring the budget under control, everything it does must reinforce the image that it is moving in this direction. The international financial markets will not just respond positively to talk or weak actions on the part of the new leaders. ‘Tweaking’ won’t do it. The crucial thing here is the confidence the world has that the new President and the leaders within the new administration are firmly committed to successfully pursuing such a policy. This confidence is hard to come by and if it is abused at all, the confidence will go away and be just that much harder to re-establish.

The candidates for the Presidency must be very careful on this. They have at least two audiences. The first is, of course, the American public. These candidates must convince the electorate that they are capable of being the President and will bring to that office a vision that the American people can buy into. Second, however, the candidates are being closely scrutinized by the world community. In the past eight years, the Bush administration has followed a relatively unilateral economic policy (as well as a relatively unilateral foreign policy). This world community is trying to determine just how much these candidates, as a President, will play by the rules of the international financial markets. This is what will make it so hard on the candidates to conduct an honest, yet positive campaign into the fall.

What these two audiences want to hear are in many instances contradictory. The American public wants to know what the candidates would like to enact if they are elected President. The international financial community wants to know whether or not the new President will bring discipline and responsibility to the creation and management of economic policy. If I am right about the concern over the undisciplined fiscal and monetary policy of the United States government, this will mean that the American public will not get what it wants…at least for an extended period of time.

I just hope that the next President of the United States will surround him- or herself with advisors of the caliber and independence of Robert Rubin. Then I hope that this President will have the wisdom to listen to their arguments and then act in the best interest of all Americans. There are many times when pragmatism should win over ideology…this is one of them!