Thursday, September 25, 2008

The Crisis Presidency Of George Walker Bush

President George Bush said in his televised speech to the nation last night: "We are in the midst of a serious financial crisis and the federal government is responding with decisive action."

Of course, the decisive action he is talking about is trying to convince skeptical members of Congress to give away 700 billion taxpayer dollars to bailout the financial services sector.

The problem for George Bush is credibility due to the fact that the word "crisis" has appeared in his speeches very frequently during the last eight years.

There was the crisis of the terrorist attacks of September 11, 2001. The crisis of Osama Bin Laden and the Taliban leading to the war in Afghanistan. The crisis of weapons of mass destruction that were never found in Iraq. The crisis of an internal civil war in Iraq that could have lead to American failure. The crisis of the subsequent troop surge in Iraq to prevent the crisis of failure in that country. The crisis of Iran and their acquisition of a future nuclear capability that apparently will not be handled under this Administration's watch.

Indeed, the list goes on and on: The crisis concerning the handling of Hurricane Katrina, the economic crisis of deep recession that led to those tax rebate checks drawn from the Federal Treasury several months ago, and now finally this serious financial crisis involving sub-prime mortgage loans.

The Bush solution to all of these crisis events is usually the same. Throw billions and billions of taxpayer dollars at the problem and try and make it all go away. Unfortunately, it is the solution of the reactive manager, not the proactive planner.

In retrospect, many of these crisis could have been avoided. The war in Iraq lacked proper planning ( See : "There never Was An Iraq Exit Strategy" on and the success of the troop surge confirmed that there were not enough "boots" on the ground from the beginning. Afghanistan is a mess and soon will become the next crisis, because it was left to an ineffective NATO and subsequently ignored.

Today's financial crisis and the problems of Hurricane Katrina were really failures of government oversight and leadership. Henry Paulson was hired to lead the Treasury from Goldman Sachs two years ago but never saw this crisis that would lead us to the brink of the financial abyss.

Also, Paulson's reaction to this crisis over the last several weeks has been to guarantee a bailout of Bear Sterns, refuse to bail out Lehman Brothers,and then to bailout Aig, Fannie Mae and Freddie Mac. Finally, with his 700 billion dollar plan , he now wants the taxpayer to bail out everyone. It certainly can be argued that Paulson's erratic policy led to so much confusion and uncertainty in the Financial markets that confidence in the Treasury was lost.

In addition, it was only one week ago that John McCain said he would fire Securities and Exchange Commission Chairman Christopher Cox and accused government regulators of being "asleep at the switch'' during this market turmoil. It should be remembered that Cox took over from the previous SEC Chairman Harvey Pitt. Both Pitt and his predeccesor, Arthur Levitt were in charge of the SEC during the Enron fiasco of several years ago.

We need to remember that a Senate investigation would accuse the SEC and Wall Street research analysts of allowing "the greed of a few" at Enron to go "unchecked and unchallenged. The investigation revealed a story of "systemic and catastrophic failure, a failure of all the watchdogs to properly discharge their appointed responsibilities". This is the SEC that Cox would inherit in 2005. It doesn't really seem to have changed very much , does it? Only now the scale of the problem may be much larger.

An effective President should hire the people necessary to set a proactive, agressive tone in managing the day to day business of the federal government. A reactive firefighter to put out the latest crisis is not what this country needs in the Oval office.

A President' slogan like any competent executive should be that the best crisis is the one that you can manage to avoid.

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