Tuesday, December 5, 2006

W Could Have Been One of the Greats

This will probably be the longest thing I will ever post. It's an essay I wrote this summer on an alternate course of action President Bush could have taken in response to 9/11. It's a radical course of action and I have gotten mixed reactions to it. Almost everyone I have let read it thinks it would have been a good thing for the country 15 years after enactment, but some strongly question the feasibility of the plan - even at the time I was recommending it. Others have raised concerns about its negative impact on the short and medium term economic outlook and the stock market.... all very interesting questions. I'd love to hear your thoughts if you manage to make it to the end!

Here goes....

American history does not provide many examples of dramatic effective leadership by our elected officials. Power is so decentralized in the American government that bold, transformative leadership is rarely possible. However, in times of crisis, power becomes more concentrated in the presidency and windows for true leadership emerge. Examples of this include the Emancipation Proclamation during the Civil War, the creation of Social Security in the Great Depression, and the passage of the Civil Rights Act during the televised explosion of racial tensions in the 1960’s.

As we all know, fate chose the Bush Administration to lead us through one of the greatest crises in our history. September 11, 2001 united this country in a way that few thought possible. President Bush had approval ratings above 90% and almost all Americans looked to him constantly in the days and weeks following the attacks for leadership. Perhaps just as importantly, we looked to him for guidance as to what we could do as individual citizens to help secure our country.

George W. Bush deserves a great deal of credit for his leadership in the months that followed the attacks on New York and Washington. His poise gave us all comfort. His calm and measured approach to the removal of the Taliban and the pursuance of al Qaeda won him the respect of the international community and struck a dramatic blow to the effectiveness of the terrorist network. His commitment to remain in Afghanistan in the years that followed to bring peace and democratic freedom to a war-weary Afghan population made us proud to be Americans.

But it is my belief that true wisdom eluded him in those precious months that followed September 11th. I cannot speak for everyone, but I can say that I was prepared to do almost anything that was asked of me for my country after we were attacked. I considered joining the military. I donated money and blood to the Red Cross. And, as President Bush asked, I continued through my fear to be an active consumer in the American economy. For example, I was terrified when I accepted a job as a management consultant because it meant routine air travel, but I got on a plane twice a week anyway. I’ve been nervous riding the subways in Boston, New York and D.C. since 2001, but I still do so whenever I feel like going somewhere to spend money because, as the President rightly stated, altering our lifestyle because of fear would be a victory for our enemies. As I said, I cannot speak for everyone, but every single person I know has conducted themselves in the same manner. We all wanted to fight back.

But should we have been asked to do more? What more could the President have asked of corporations and individuals to enhance our security – not just in the war against al Qaeda, but to strengthen our overarching long term interests as a nation?

I have a proposal that I don’t think requires the benefit of hindsight:

In the days after 9/11, George W. Bush should have met with the CEOs of Ford, General Motors and Chrysler to ask for a dramatic shift in their corporate strategies. If necessary, he should have demanded it on behalf of the American people. Although the Administration would have collaborated with the firms to develop the specifics, their new strategy would have been something similar to the following: in 5 years, 20% of their domestic production would be hybrid (or equally fuel efficient) vehicles. In 10 years (benefiting from scale), 100% would be hybrids. In 15 years, the Big Three would no longer produce gasoline consuming engines for the American public. For the first time, we could have had a real plan (not an empty “strategy”) to achieve independence from foreign oil. Bush should have worked with Congress to ensure that the Big Three and American oil companies received all the financial assistance they needed to make this possible with minimal pain and job loss – R&D subsidies, increased tax incentives for consumers, etc.

In the initial years of this endeavor, as we weaned ourselves off of oil, Bush should have asked each American for a personal sacrifice. Lower highway speed limits to increase fuel efficiency, and greater use of carpooling and public transportation to lower absolute fuel usage would have been a good start. In addition, the President could have asked each citizen to start a personal voluntary savings account to buy a more fuel efficient vehicle (one of the new hybrids) in the next ten years. Tax incentives could also have been provided to buy stock in the Big Three and American oil companies to help them weather the economic storm and the help them fund their new priorities of investment in new engines and alternative forms of energy.

It is my belief that this plan would not only have benefited our national security, but would have eventually led to a revolution in international affairs pertaining to the Middle East. As we enacted this plan, America’s interest in the region would not diminish completely. Our allies in Europe and Asia, unless they followed our lead with their own national programs, would still need substantial amounts of oil and the global nature of the economy would have made their economic problems our own. Therefore, our leadership in the region would still be needed – particularly in times of great instability or war. One could argue that our leverage would be reduced given our lack of purchasing power – but I believe that this leverage would be replaced be the increased pro-activeness of our allies. Today, Europe, Russia and Asia can take a more relaxed and non-confrontational role in the Middle East. They can do this because they know that American power and the gluttony of American oil consumption will compel us to take the difficult steps that leadership requires when action becomes absolutely necessary. They can feign deference to Middle Eastern public and/or government opinion, safe in the knowledge that when difficult and unpopular action is required, America will do what must be done. They can have their cake and eat it too.

However, if America no longer directly needed oil from the Middle East, these countries would be compelled to take a more active and assertive role in solving problems in the region. The economic pain they would feel from inaction would be more severe and occur sooner than our own. They would be compelled to constructively contribute to solving problems in the region. Imagine the difference in the actions of the international community towards Iraq if they suddenly needed its oil significantly more than we did.

In addition, America would be able, for the first time in over 50 years, to act in a manner more consistent with our principles. We could be a more aggressive advocate for true democracy and human rights. The need to sacrifice our principles for stability – as we did in Iran in the 70’s, Iraq in the 80’s and do in Saudi Arabia today – would be substantially reduced (though admittedly not totally eliminated).

But is this plan feasible? More specifically, would American willpower have been sufficient to alter our lifestyle to one of less consumption? Was our economic strength sufficient to carry this out? Would Congress have approved the necessary funding and the uncertain political implications of this proposal?

Personally, I don’t doubt Americans’ willpower to do these things given the proper leadership– and not just in the short term. I think a national counter, similar to the one that records our perpetually increasing debt, should have been established and shown every time the new color-coded terror warning was shown on TV. It would have logged the billions of dollars that we have diverted from foriegn oil thereby giving Americans a daily reminder of the impact they are having towards the long-term economic and physical security of the nation. In the days and months after we were attacked, this is what we were all looking for – a way to fight back.

Could the economy have afforded all of these subsidies, tax incentives and the short term decrease in economic activity as Americans shifted their lifestyles to one of more savings and less consumption? I do not claim to have numbers that would allow me to definitively answer yes. Would the plan have resulted in substantial short term turbulence in the stock market? Almost certainly. Would it have resulted in job loss in certain sectors such as automobiles and oil companies? Possibly, but this could be minimized with feasible government assistance. But in the longer term, it could very well increase employment in these sectors – particularly in automobiles as more Americans would have an incentive to buy from the Big Three. Would the proposal also have allowed the United States to develop a substantial technological lead in alternative energy? I believe it would. We could build an edge in an industry that is certain (sooner or later) to be one of the most important in the world. So, with respect to economics, we would be making a very calculated investment and incurring temporary pain for a large future benefits.

But did the U.S. government have sufficient financial resources to enact this proposal? The actions of Congress in the years that followed suggest that our legislators did have sufficient confidence in the economy to pursue such a plan. After all, the Administration and Congress did determine that we could afford a trillion dollar tax cut, a $400+ billion dollar Iraq war and a $600 billion prescription drug plan. Furthermore, President Bush advocated spending an additional $2 trillion to privatize Social Security. I cite these expenditures not to provoke a debate on the value of these policies – only to show the vast financial resources that the country can bring to bear on endeavors Congress deems a high priority. The money was there.

Finally, money aside, would Congress have been willing to follow the President’s lead and approve this radical strategy given its uncertain political implications? I argue that they would. In 2001 and 2002, Congress authorized two wars and the passage of the Patriot Act. The President’s leadership was virtually unchallenged for the first time since December 1941. Although certain special interests would undoubtedly have protested the proposal due to the short term financial pain and market uncertainties it would have caused, their arguments would have had to present an effective response to the assertion that this proposal would be of tremendous long-term benefit to the strength of the nation. For decades, a top United States priority has been independence from foreign oil. This policy would be a tremendous step towards that goal. Therefore, with the public focused on the national good and attuned to presidential leadership in a manner not seen since World War II, I do not believe that any special interest group could have made it in Congress’s political interest to resist the proposal.

Had President Bush embraced this policy, I argue that history – and perhaps even his contemporaries – would have recognized it as one of the greatest and most meaningful examples of American leadership since our founding. Bush would have put us on track to achieve the energy independence that our government has been paying lip-service to – and made no progress towards – for decades. He would have radically and positively changed the balance of power and interests in the ongoing debate and conflict in the Middle East by compelling the other powers in the world to truly engage in solving the region’s problems. (Incidentally, he would have struck the most meaningful and dramatic blow to global warming any of us can realistically imagine). Our long term physical and economic security would have been dramatically enhanced and our image in the world would be strengthened as we regained our ability to act more in accordance with our fundamental principles. These principles of liberty, justice and equality of opportunity – the ones articulated at our nation’s birth by Jefferson, Adams and Madison – are the reason America was once loved by the rest of the world…and in a world where ideas are more important in the long term than guns and bombs, this would perhaps be the most profound blow of all to those that mean us harm.

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