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S/SW blog philosophy -

I credit favorite writers and public opinion makers.

A lifelong Democrat, my comments on Congress, the judiciary and the presidency are regular features.

My observations and commentary are on people and events in politics that affect the USA or the rest of the world, and stand for the interests of peace, security and justice.


Tuesday, September 30, 2008

"This is a crisis of leadership"

As "vulnerable GOP members reject[ed the] bailout," pundits, experts, officials and citizens alike chalked the bill's defeat up to failed Republican leadership or failed Democratic leadership. Depending on whose side they favored, opinion makers have spent the time on casting blame since the result emerged. Today's post will be another in my "leadership" series examining what makes a good leader, and hoping to maintain a bit of objectivity, rather than partisanship.

Faulty information is an enemy of good leadership. Leadership in the U.S. House of Representatives has been widely blamed for the defeat of the so-called Wall Street bail-out bill yesterday. There was a good amount of finger-pointing both from within and between the Democratic and Republican parties. Bipartisanship disappeared rapidly after the vote count was tallied. The blame for the Iraq war is now well placed because we now know that the administration's rationale for the invasion of Iraq was based on faulty information. We see that good leaders work from credible information. Just as a small example, the leaders of both parties were not working from trustworthy estimates of what the final vote could be, even though their overall goal was bipartisanship. Patrick O'Connor and John Bresnahan, from Politico.com. conclude what actually happened in, "Boehner's gamble: Could it cost him his job?" To quote:

. . . Blunt said he had come to the floor thinking 75 Republicans would support the plan. He was off by 10 — just short of the 12 that were needed to turn defeat into victory.

But Boehner told a different story. He said that the GOP leaders never thought they’d get more than 68 Republicans to support the bill — and that he sent Blunt to tell Majority Leader Steny H. Hoyer (D-Md.) as much nearly two hours before the vote.

“I sent [Blunt] down to talk to Hoyer, 11:30, quarter to 12, somewhere in that time frame,” Boehner said. “We had a pretty good idea where we were, where we thought we could get to. And Hoyer knew.”

Boehner added: “I did not talk to [Hoyer], so I don’t know what their conversation was. [Blunt] and I had that conversation. We talked about ‘Should we just rise [walk out]?’ It wouldn’t have been good, but I thought it would have been better than this. It really doesn’t make any difference.”

Democrats, for their part, said they assumed Blunt was lowballing his whip count to force Pelosi and the Democrats to line up more votes from their members.

In the end, as Pelosi and her team tried to flip votes in favor of the proposal, there was little Boehner or his Republican leadership team could do to entice those who voted “no” to switch their tally in support of the controversial measure.

“Given the unpopularity of this whole concept, it’s amazing that we got as many votes as we did,” Boehner said.

Information is power and rank and file citizens took some leadership power unto themselves this past week, directly contacting their Representatives in Congress. Callers were objecting in high percentages to the idea of bailing out those on Wall Street. With the election just weeks away, many vulnerable candidates were influenced by their constituents' points of view about the nature of the crisis. A few Reps exercised good leadership and voted from what their consciences dictated, going against expressed public opinion. No matter which side we would take regarding the current crisis, we are better served if leaders are willing to lose an election for principle.

Government is supposed to be in the business of exercising good leadership. As citizens we elect people to look out after our best interests, to protect us from harm, and to seek justice through lawmaking. At this time in history the economy is seriously out of whack because of a power-grabbing oligarchy and a Congress marked by weakness and lack of leadership. If any U.S. Representatives read the following analysis, it would go a long way to explain why the bail-out bill failed: "Grand Theft America#" by Stephen Lendman at Global Research is probably one of the very best articles one could read to truly understand what this crisis is about. (As an aside, it revealed the genesis of Paulson's moved to grab unreviewable powers). The author explores "the current dilemma that world leaders and financial experts are scrambling to figure out. . . . . . A global asset bubble. . . . Begun after Chicago School economics took hold under Ronald Reagan. Continued under GHW Bush. Became religion under Bill Clinton, and ultimately fundamentalism under GW Bush. . . . At 19%, George Bush scored lowest [rating] ever for a US president . . ." For your own information, I quote a few key paragraphs:

The crime of the century. The greatest one ever. Author Danny Schechter calls it "Plunder." The title of his important new book on the subprime and overall financial crisis. Economist Michael Hudson and others refer to a kleptocracy. A Ponzi scheme writ large. Maybe an out-of-control Andromeda Strain. An economic one. Deadly. Unrecallable. Science fiction now real life. Potentially catastrophic. World governments trying to contain it. Trying everything but not sure what can work. Maybe only able to paper it over for short-term relief. Buy time but in the end vindicate the maxim that things that can't go on forever, won't.

. . . The result of unfettered capitalism's fatal flaw - unbridled greed in a rigged system that rewards the few at the expense of most others. First an explanation of how it works. Free-wheeling, "free market" Chicago School fundamentalism the way economist Milton Friedman championed it in his 1962 book "Capitalism and Freedom" and taught it to students for decades. He believed that government's sole function is "to protect our freedom both from (outside) enemies....and from our fellow-citizens." Preserve law and order. Enforce private contracts. Protect private property and "foster competitive (unregulated) markets." Everything else in public hands is "socialism....blasphemy." Not to be tolerated.

. . . Yet Bush concluded that "democratic capitalism (is the) best system the world has ever devised" in spite of clear evidence that it's broken and corrupted. Exploits people for profit. Enriches the few at the expense of the many. Rewards criminals for their crimes. Protects the rich from beneficial social change.

In other words, unchallengeable czarist powers. In contrast to the 1930s Reconstruction Finance Corporation's (RFC) closely supervised operations. That era's Home Owners' Loan Corporation (HOLC) that refinanced homes to prevent foreclosures. And the 1980s Resolution Trust Corporation (RTC) mandate to liquidate assets from failed S & Ls. Not dispense free money for bad investments unchecked. The above authorities subject to judicial review. Not governed by a financial boss to run as he pleased.

. . . Given the bipartisan blame for today's crisis. The post-9/11 willingness to give the administration near-carte blanche authority across the board. Eight years of indifference to social needs and public welfare. Who now believes that policy going forward will change and that the agreed-on scheme will protect people or curb the secretary's authority. On his own initiative, George Bush usurped supreme power post-9/11 while few in Congress blanched. None in leadership positions. Little today has changed.

Leadership capacity rests on differing traits in different people. As examples, strengths such as being mutually respectful, "tough as a boot," calm in a storm, experienced, and incredibly articulate or intelligent, all come to my mind. Everyone in both parties has his or her own list. The story of John Boehner's easy-handed leadership style, one that respects the principles of his followers and lets them do what they want, is an interesting one. To further quote from the previous story:

The bruising tally — coming on the heels of a weeklong revolt — had some GOP members asking privately whether Boehner can hold on to his leadership post. He said he did everything he could.

“You can’t break their arms, you can’t put your whole relationship on the line, ask them to do something that they do not want to do and have that member regret that vote for the rest of their life,” Boehner said. “Twenty years from now, nobody will care how anyone voted except those members. You can’t do that. You just can’t.”

. . . Boehner has [told] Republicans he would not lean on them as his predecessor, former Texas Rep. Tom DeLay, was wont to do. On some level, the problem was a lack of discipline. House Republicans lack the clear leadership chain that characterized their tenure in the majority under DeLay. The member-to-member relationships were much closer, so the whips typically had a better sense where votes stood before heading to the floor.

Boehner lacks the heft of former Speaker Dennis Hastert, who could always flip a few core votes in the final days before a tough roll call, and his party lacks any other heavy now that President Bush has only a few months left in office.

As the House prepared to vote Monday, Boehner delivered an astonishingly nonpartisan speech, telling the members who had already assembled on the House floor: “I don’t know that they get much tougher than this. No one wants to vote for this.”

When he finished, Boehner got more applause from Democrats than Republicans. . .

As a leader nation, the United States must now exercise good governance for the sake of the entire world. Whether we like it or not, we are an example of representative government that listens to its people, respects the rule of law, and looks out for the most vulnerable among us. Our top leaders had better be very careful about next steps. That means that the executive and legislative branches had must seek cooperative solutions that make sense to our own people, and not just to the oligarchs. Other nations are depending on that. So what are the next steps? The New York Times reports, Treasury and the Fed Looking at Options." To quote the article's conclusion:

. . . Mr. Rogoff cautioned that the real limitation for American policy makers is whether they can maintain the government’s long-term credibility. “The real constraint is not a bookkeeping one,” he said. “It is a sense of faith on the part of foreigners that the U.S. government will repay its debt. Our most precious asset is that credibility.”

The current crisis of leadership is partly our fault. We put these people in office without knowing the qualities of good leadership. My post's goal today has been to lay out a few of those key qualities, such as confronting reality, valuing the truth, exhibiting outstanding interpersonal skills, standing on principle, understanding compromise and conciliation, and being able to occasionally set aside ego. We will change a lot of leaders in the next few weeks; be careful about the qualities you look at when deciding.

Hat Tip Key: Regular contributors of links to leads are "betmo*" and Jon#.

View my current slide show about the Bush years -- "Millennium" -- at the bottom of this column.

(Cross-posted at The Reaction.)

My “creativity and dreaming” post today is at Making Good Mondays.

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2 comments:

PseudoCyAnts said...

Barron's is attempting to set-up a soft-landing for the Republicans who will end up voting for the next version of the bail-out:

----------------[
After the House of Representatives Monday dramatically rejected legislation to establish a $700 billion rescue package for the financial system and helped to trigger more than $1 trillion loss in the value of U.S. stocks, Congress worked Tuesday to put together a bill that could gain passage, perhaps by the end of the week.

What changed? Reports say that House members, who previously had been besieged with messages from constituents who reacted with blind anger over the prospect of laying out $700 billion in what they saw as a bailout for Wall Street fat cats, heard a very different tune Tuesday. America's investor class reacted just as angrily at the losses suffered in their retirement and college-savings accounts as what they saw as the result of the House defeat of the bill.

Randall W. Forsyth , "Congress Reads the Returns -- of Minus $1 Trillion", Barron's, October 1, 2008
]----------------

Mighty broad definition of the "investor class", if you ask me. In reality, the investor class are those who are pissed off about how big a percentage of their wealth now needs to be expended purchasing their monocle polish.

A great number of the persons opposed to the bail-out lost money in their 401-Ks and children's college funds. It ain't gonna be the Democrats would walked after the ACORN initiatives were excluded from the package who will return with a yea vote, because ACORN is off the table. It just won't do for the "investor class" if po' folk get a piece of the bail-out pie.

The Barron's article goes on to describe the mark-to-market accounting rules required by Sarbanes/Oxley as a "relatively esoteric matter". Really? A financial institution having to mark their assets to present day valuations is called transparency, and if this passes, there will be more trouble down the road, guaranteed.

My prediction is that there will be a bail-out passed by no later than next Monday, and that many of the Republicans who voted no previously will be onboard. It will be billed as bipartisan cooperation. Whenever the word bipartisan is mentioned in the same sentence as $700 billion, go and put on your best pair of steel trousers, because politicians are about to tear you a new one.

The proper way to handle this crises is to force all corporations who need government funding to completely and honestly mark down their bad debt publicly, forcing their share price to tank down to the real market value. Then whatever monies they receive, the Federal Government should receive stock warrants on a dollar for dollar basis at that value. As soon as the market stabilizes, and the Government is able to realize a profit from these warrants, they should be sold to the highest bidders at open auction, and the monies derived from these sales to be placed directly into the treasury, not siphoned off into pet projects. If Congress played free-market hardball with the financial corporations, most would suddenly discover new avenues of previously untapped investment capital, and would no longer be crying for a hand-out. Never extend credit to a lousy gambler. It's like giving money to a junkie.

Carol Gee said...

Hey Pseudocyants, thanks so for this very useful opinion plus information. I am going to write about this again today, naturally. I needed this very reference for the phone call content switch that caused the House communication system to crash from overload yesterday.
I haven't seen a bigger mess in a while, have you?