Viewpoint -- Leadership, The President And War

Dec. 21, 2004
In its pursuit of Iraq, the threat of terrorism, and its domestic agenda, the Bush Administration strains credulity and denies history.

I write this column reluctantly, for I have great respect for the Office of President of the United States. In Washington, D.C., I have had the privilege of being witness to eight presidents of the United States -- their moments of triumph and unprecedented achievement and their times of defeat and disgrace. But I write now about George W. Bush and the failure to lead. I write about the management failure of the nation's CEO, the first U.S. president to have an M.B.A. degree. I write not out of malevolence but out of concern. And I write after several weeks of thinking about this subject, of reviewing the historical record and of sorting through my thoughts and trying to sharpen them. In the matter of war with Iraq, President Bush may have persuaded some of the unpersuaded with such State of the Union lines as "Americans are a free people, who know that freedom is the right of every person and the future of every nation" and "The liberty we prize is not America's gift to the world; it is God's gift to humanity." But they were words -- albeit well-crafted and well-delivered words. But they were not a convincing call to arms against Iraq. Forty years ago last fall, President John F. Kennedy went before the American people on television and laid out the clear and present danger that Soviet missiles based in Cuba posed to the United States. His words were direct and forceful. He had convincing evidence: the famous photographs. During the past few weeks I have been talking with several CEOs and the people who advise them about managing in a slow-growth economy. They have stressed -- repeatedly -- the need for a CEO to fully communicate the financial condition of the company and to clearly articulate his or her operational plan for dealing with it. They put communication at the very top of essential CEO actions. Indeed, one person insisted that there was no such thing as too much communication from a CEO in a time of economic challenge. Their counsel seems lost on President Bush, and that has worked to his and the country's detriment. The primary danger of the past few months has been that war with Iraq would be waged out of frustration with a person, not out of a presidential conviction of purpose effectively communicated and widely shared. It is not the only Bush Administration strategy with which I find fault. President Bush is not President Lyndon B. Johnson. This year is 2003 and not 1965. The U.S. economy is now more than $10 trillion, not less than $1 trillion. A regime change in Iraq is not the Vietnam War. Nevertheless, during the past several months the Bush Administration also has been pursuing a misguided strategy eerily reminiscent of policies that proved disastrous nearly four decades ago. Call it Guns and Butter 2. President Johnson believed, wrongly, that he could both escalate a war in Vietnam and fund a Great Society. President Bush believes, wrongly, that he can pursue regime change -- perhaps by war in Iraq -- and cut taxes in pursuit of his image of a greater American society. A month ago, the word from the White House Office of Management & Budget (OMB) was that the federal budget, which posted a $127 billion surplus as recently as fiscal year 2001, will incur a $200 billion to $300 billion deficit in this fiscal year (2003) and again in the government accounting year that begins on Oct. 1. A couple of weeks ago, OMB Director Mitchell E. Daniels Jr. indicated the deficit would be more than $300 billion in the current fiscal year and next. Significantly, these record budget-deficit projections do take into account the lost-revenue-costs of President Bush's economic plan but do not include the cost of a war with Iraq or any U.S. post-war involvement in that Middle East nation. What might a war with Iraq cost? Research by Yale University economist William D. Nordhaus, quoted recently in the Washington Post, put the likely figure at $391 billion during the next two years -- although it was said that the cost could be as low as $100 billion or as high as $1.6 trillion during the next decade. Why should executives in manufacturing care about the size of the federal budget deficit? The men and women who are the CEOs, COOs, CFOs, CTOs and CIOs of manufacturing firms have among their professional responsibilities a role in setting national priorities and establishing government policies. They do much the same in their own business: set priorities, establish policies and allocate finite resources. They know that when the federal budget drops deeper into deficit that the government must borrow more and pay out more in interest. Those interest payments mean there's less money available to spend on such things as education, housing, prescription drugs for seniors, transportation, and, yes, even national security. The dollars the government borrows to finance the deficit also mean fewer dollars are available for manufacturers to finance new equipment and to pay for the training that increases the skills and boosts the productivity of their workers. Fewer dollars are available to help establish new manufacturing businesses and to create manufacturing jobs. The Bush Administration believes that it can have both guns and butter, and that no sacrifice, as Albert R. Hunt observed in a recent Wall Street Journal column, is being asked of anyone "other than those in uniform." That strains credulity, denies history and is a failure to lead. John S. McClenahen is an IndustryWeek senior editor. He is based in Washington, D.C.

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