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New Defense Secretary Changes Everything – Perhaps

On Election Day, the American people spoke very strongly that the direction the President and the Republican Party was taking America towards, is not the direction the country wanted to go in. Presidents are not oblivious to polls. They may not honor them, but they are not oblivious to them. The most important issue in the campaign turned out to be two issues according to the exit polls. They were CORRUPTION, and IRAQ in that order.

The President was quick with a lightening type response to the election. I personally felt Donald Rumsfeld was going to be fired 3 or 4 weeks after the election to allow him to leave with his dignity intact. The President dispatched the now lamb duck Secretary within hours after the voters made their decisions. In doing so, the President is insuring that this Congress will ratify the nomination of Robert Gates, not a Democratic Congress convening in January of 07.

What type of man is Robert Gates, the D Sec as they call the Secretary of Defense? There are parallels to this selection. During the height of the View Nam war, after six plus years in office, Robert McNamara was a worn, beaten man troubled by his own running of that war. His children had even turned against him. His friends advised how can you continue to be a part of this mess? McNamara left, and Lyndon Johnson installed Clark Clifford, one of my heroes who was a legal advisor to every Democratic President since Harry Truman. Clifford was even Joe Kennedy’s lawyer, the father of the future slain President.

Johnson thought that Clifford would turn into an absolute HAWK on Viet Nam, and turn up the pressure on the war. Instead, he advised Johnson, you are in an un-winnable situation, and I advise a negotiated settlement. Johnson swallowed hard, and announced he would not be his party’s candidate for nomination, or re-election in the upcoming months.

Robert Gates the new incoming Secretary of Defense is this President’s second attempt to reach out to his father’s advisors to HELP HIM. In the last 3 years, not once has this President spoken to the most important advisor he could have spoken with, regarding what to do in Iraq - namely his father, George Herbert Walker Bush. Now when the Iraq war has turned into a quagmire with no end in sight, this President has chosen his father’s CIA director Robert Gates, to step in and turn this thing around.

Gates was a student of Brent Scowcroft (former National Security Advisor), as was Condolezza Rice, our Secretary of State. Scowcroft is considered the ultimate low key professional who ran White House foreign policy when George HW Bush was President. Most people think Secretary of State James Baker called the shots, that’s only partially correct. Scowcroft was the professional with the experience. Baker learned of course as the years went by, and became a very effective, diplomatic Secretary of State. Gates was there all the time, a totally professional intelligence analyst who is the only CIA career employee to rise from the bottom to become Director.

The President’s current status

This President is in trouble, and the people who surrounded him called the Neo-Cons got him into the mess he’s in. What you need to understand is that George Bush unlike many other politicians believes what he says, and says what he believes. Most politicians play to the crowd. This man’s hero is probably Harry Truman, who walked out of the White House with an approval rating approaching 25% in 1953, and went on to be venerated by succeeding generations of Americans.

President Bush does not play to the crowd. This is evident in his news conferences when he can not help but show his feelings when reporters ask the stupidest “SHOWBOAT” questions. Bush will not have any part of it. He is an authentic guy that lives his life that way. If the Iraq Study Group chaired by former Secretary of State Baker, gives the President some very tough advice on Iraq, he just might take it. Bush is not a fool. He knows this war is not going well. He also knows the American people like to keep their Presidents on a short leash when it comes to wars, and the free ride is now over.

For the moment, the pressure on President Bush can only get worse. Secretary of Defense Rumsfeld was taking the heat that rightfully belonged to the President. Rumsfeld as a foil for this country’s anger is now gone. Bush will instead take the heat himself. He has no problem with that if he the President continues to believe in the righteousness of his actions, and for the moment he does. The President has been constantly underestimated by his opponents. You don’t win two national elections, and one Congressional election in between by being a fool.
Bob Gates is going to change things at the Defense Department, and change them quick. Do not for one moment believe that Rumsfeld was wrong on everything he did, that’s nonsense. He did get four big things terribly wrong. One, he underestimated the post Iraq war need for US troop levels. It takes more troops to govern a country and quell discontent, than to invade and take over. Two, He did acquiesce or instigate the destruction of the Iraqi army. That army could have been utilized to re-build and govern post-war Iraq. We simply had to PAY THEM a sum of money equal to a fraction of what we are paying Halliburton for a failed US policy.
Thirdly, he participated in, or instigated the firing of the Sunni’s who ran the Iraqi government before finding COMPETENT REPLACEMENTS to replace those fired. They knew how to turn the electricity on, and keep the machinery of government functioning. Even General Patton at the tail end of WW II used Nazi bureaucrats until he could train his own bureaucrats. Fourthly, the Iraqi police were fired, and then new people had to be found, vetted, and trained – 3 years have elapsed.
What does it mean? We will never know if democracy would have had a chance to flourish in Iraq. It is too late, too much time has been wasted to wait for that to happen. The President’s team, and therefore the President FAILED in the EXECUTION of a policy that could have worked had it been implemented properly, perhaps, we will never know. The American people have now lost patience in waiting for this President to correct his own mistakes – and forced change upon him via an election.
Robert Gates is his first response. James Baker and the Iraq Study Group in the next couple of weeks will be his second response. Watch for changes in the Defense Department as soon as Gates is approved by the Senate. Does he fire the neo-cons one after another? If he does, you know we are on our way to a new policy.

Richard Stoyeck
http://www.stocksatbottom.com


About the Author: Richard Stoyeck’s background includes being a limited partner at Bear Stearns, Senior VP at Lehman Brothers, Kuhn Loeb, Arthur Andersen, and KPMG. Educated at Pace University, NYU, and Harvard University, today he runs Rockefeller Capital Partners and StocksAtBottom.com

Value Investing at StocksAtBottom.com




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