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Iraq and the Misery Index

The other day it occurred to me that during Ronald Reagan’s run for the Presidency he created a “Misery Index”. This index represented a total of the rate of inflation, plus the prime rate, as an indicator of how the American people felt about how they were doing. No one has suggested resurrecting this index in recent years. My thought was to create a “Happiness Index”. How happy are you with the leadership of the country. The problem is that other than taking an outright poll, how do you determine happiness? Could you merely ask people if they are happy, or not with the way things are going?

Think about it for a moment, and try to objectively look at what’s been going on the last couple of years. For the last fifty years, the Republican Party successfully presented itself as the people’s choice for as a strong anti-communist party versus the former Soviet threat. Republican President after President was elected on the basis of toughness versus communism.

By 1992, communism was no longer an issue as Russia, and the satellites went democratic, and the Berlin Wall had fallen. Suddenly, the Republican Party felt its foreign policy legs come out from under it. The communist bogeyman which was real since 1917 was no longer an issue. A sitting Republican President, George HW Bush was defeated handily by Democratic Candidate, Bill Clinton who had NO foreign policy experience, or even an understanding of things foreign. During the campaign that followed, foreign policy was a NON-ISSUE. There was no communist bogeyman for the Republicans to pin their hopes on.

The tragedy of 9/11 changed everything. When the tragedy struck, the current President of the United States was handed terrorism on a silver platter as an issue. Terrorism could then be used as a replacement for communism as the next boogeyman. Anti-terrorism would serve as the underpinning of the Republican Party the same way anti-communism served for over 70 years.

The President attacked the Taliban in Afghanistan who had harbored Osama Bin Laden, and his allies for years. When it came to finishing the job, and surrounding Osama in the mountains of Tora Bora, Afghanistan, we let this mass murderer get away by leaving the job to foreign hired mercenaries, the anti Taliban Afkan nationals. I assume we simply did not want to take the American manpower losses that might have been demanded.

The President then committed the American army and wealth to destroying the Saddam Hussein regime in Iraq. Our entry to this war was based on false premises. There were no weapons of mass destruction. We are now left with chaos and civil war in that country, and no EXIT STRATEGY. As Americans, not one of us, including the President has any idea how this war will finish. He, the President has now placed our country in the same position as we were in during Viet Nam - Quagmire.

When Americans enter a war, they need to know the objective. During WW II, it was the taking of Berlin in Europe, or the fall of Tokyo in Japan. In Viet Nam, there was no mission, except the ephemeral objective of keeping South Viet Nam from going communist. What does that mean? Depending on how you calculate it, the Viet Nam war went on for about 15 years. How long will Iraq take?

I believe the President has been notified by the American people in the recent Congressional election that he is on a “short leash” when it comes to Iraq. What is the objective in Iraq? It can’t be democracy any longer. These people do not understand democracy as we understand it. The concept of democracy in that part of the world has not existed in thousands of years.

Democracy is everybody’s SECOND choice in Iraq. The Shia and Sunni’s are killing each other on a daily basis in large numbers, some of which are unreported. Good, decent American troops, none of which are sons of any member of Congress, are dying in a war without an objective, except for “Stay the Course”.

These policies should be unacceptable to all of us as Americans. The Republican Party in Congress was a surrogate for President Bush in this election. The voters could not vent their ANGER at President Bush direct. The electorate chose instead, to vent their pent-up anger towards Republican incumbents, who took a “thumping” as the President said. Yes there were other issues like corruption, but Iraq was the emotional issue. Had President Bush been up for re-election, he would have been soundly defeated by even a paraplegic blind mute this time around.

Let’s get back to that “happiness index” I spoke about in the beginning of this article. Are any of us happier with the progress of our country over the last six years than we were before that period? Are we more optimistic about the future of our country now than we were a few years ago? Do any of us believe we are headed in the right direction, or even where we are headed at all?

I believe we are now facing MASSIVE UNRESOLVED PROBLEMS that if not addressed will get worse, and our present leadership is not even aware that they exist. America has moved from a farming economy pre 1900, to a manufacturing economy in the 20th century. It must now complete the move from a manufacturing economy, to a services / post industrial society in this the 21st century. This is going to be a tough move with big unanticipated downdrafts that can knock us for an economic loop.

China and the Asian rim want to manufacture everything, leaving us with nothing. Some of our brand name companies are more than willing to accommodate them. Nike manufactures nothing – everything comes from Asia. The massive oil companies in this country including Exxon, and others manufacture nothing – they are strictly distribution and marketing entities. GM and Ford can not compete against Asian manufacturing, and then there’s Wal-Mart, which really functions as a distribution arm for China. Eighty percent of everything Wal-Mart sells comes from China.

This President does not have his eye on the ball, and we are in danger of losing our economic fire power in the next decade. He is asleep at the switch, and must realize that we can no longer afford the loss of precious lives, and national wealth on wars without objectives in countries that none of us have ever been to.

We do not have a “Happiness Index” in this country, but if we did, I believe we are near a low in our emotional happiness in this country. Things have to change, and they have to change in a hurry. Time is NOT on our side. Other countries want to eat our economy for lunch, and displace us as the world’s only remaining superpower. This President would do well to act his act together, and start thinking about how to maintain national economic wellbeing in the face of the coming foreign economic threats that are looming.

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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