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["Toni Hawryluk" <tonihawr AT msn.com>]

Punctuated for those who either don't know
how to think, or are still looking for a mote in
others' eyes and ignoring the boulder in
their own ...

http://www.msnbc.msn.com/id/6263236/site/newsweek/<http://www.msnbc.msn.com/id/6263236/site/newsweek/>
  - 
......................... or read the magazine in the library  - or buy it ..

Newsweek National News

Where the Buck Stops



Viewpoint: The first CEO president stands before America's shareholders. 
Rehire, or fire? A columnist's take on the record

You're fired?: On Nov. 2, American shareholders will rate the first CEO in 
chief

 

By Jonathan Alter

Newsweek

Oct. 25 issue - At bottom, elections involving incumbents are always about 
rehiring or summarily firing the president. The voters are like shareholders 
in a messy proxy fight. They have to examine how current management is 
handling the country's business, then make a tough-minded decision about 
performance.

Even if comparisons between industry and government are inexact, it's fitting 
that Bush's performance be subjected to the type of rigorous review that, 
say, Jack Welch might undertake. This is a language that Bush understands. He 
is the first M.B.A. (Harvard, 1975) and the first former CEO and corporate 
board member to become president.

So let's dispassionately assess the president's record in six categories: 
risk management, finance, international operations, plant security, human 
resources and strategic planning.

RISK MANAGEMENT. The first priority for any chief executive is to keep the 
company thriving. This means balancing ambitious expansion efforts with the 
need to stay solvent and maintain the company's good name. It means dealing 
effectively with unanticipated market conditions. Bush has unquestionably 
shown leadership, 

but is it moving the enterprise in the right direction?

The president and his chief operating officer, Vice President Dick Cheney, 
have staked their reputations on a series of big bets.

Among them: 

1) That the tax cuts will boost the economy instead of continuing to drain 
the Treasury (the nonpartisan Congressional Budget Office reports that two 
thirds of the 2004 deficit results from the Bush tax cuts). 

2) That the war in Iraq will lead to a beachhead for democracy in the Middle 
East instead of becoming a recruitment tool for terrorists and a costly 
quagmire for the United States. 

3) That terrorists will not strike American ports, chemical plants or other 
places overlooked by the administration's homeland-security policy. 

4) That the country's global lead in medical sciences can survive limiting 
the public funding for stem-cell research.

The job of the shareholders (voters) is to determine whether the chief 
executive's assessment of risk is prudent. Bush responded quickly to 9/11 and 
has avoided another attack on U.S. soil. 

But most of his other big bets have 

not 

yet paid off.

FINANCE. If the financial picture were rosy, Bush would be easily rehired. If 
it were grim, he would be quickly fired. Because the record is mixed, the 
vote will likely be close. The key economic indicators: Unemployment is at 
5.4 percent, which is good by postwar standards but does not include hundreds 
of thousands of "discouraged workers" who have given up looking for work. On 
the other hand, it also doesn't reflect "household surveys" that do a better 
job of counting the self-employed. Interest rates remain at historic lows and 
inflation-except for health care, tuition and, more recently, energy-remains 
in check. Homeownership continues to climb. 

The number of Americans living in poverty, which declined in the 1990s, has 
moved back up. 

The minimum wage is $5.15 an hour, where it has been for seven years.

Job growth is a crucial benchmark for presidents. Bush is, in fact, the first 
president since Herbert Hoover to see net job loss during his term, though 
John Kerry doesn't point out that the losses under Bush-estimated to be 
between 600,000 and 1 million-are hardly on the scale of the Great 
Depression. Bush, for his part, doesn't acknowledge that the new jobs being 
created in recent months generally pay much less than the old ones. 

Most economists agree that if his tax-cut plan had been aimed at the middle 
class instead of the wealthiest 1 percent, it would have spurred more job 
creation. 

And the president has done nothing to close tax loopholes that encourage 
corporations to ship jobs overseas.

Bush didn't really "lose" those 1 million jobs, any more than Bill Clinton 
"created" 22 million. The economy is too big and complex for the president to 
control. But overall fiscal stewardship does affect the numbers. For 
presidents, job growth is the equivalent of sales growth for CEOs: while poor 
results may not be entirely their fault, they're held accountable anyway. The 
same goes for bad balance sheets. 

Bush arrived in Washington with a roughly 

$400 billion 

surplus. 

Rebating that to the taxpayers was fine-until it was clear that the budget 
was headed for serious red ink. Then, arguably, a responsible CEO would have 
made a midcourse correction to cut spending and raise revenue, especially 
given the costs of 9/11 and the war in Iraq. Every other wartime president in 
American history has raised taxes to pay for his war. Bush not only didn't 
raise taxes, he cut them further (with more than a third of the benefits 
going to those who make more than $1 million a year) and signed expensive new 
bills helping farmers, seniors, transportation and schools. To the dismay of 
fiscal conservatives, he has vetoed no spending bills.

At 4.5 percent of GDP, the deficit is not as bad as 20 years ago (when it was 
6 percent), 

but it goes down on the books as an 

$800 billion loss 

in four years. 

For any company, that's real money.

INTERNATIONAL OPERATIONS. After 9/11, Bush had full global support to topple 
the Taliban in Afghanistan. But then Bush rolled the dice on a far bigger 
hostile takeover of Iraq. At the same time Bush decided to concentrate on 
Iraq, Osama bin Laden and most of the leadership of Al Qaeda were still holed 
up at Tora Bora. According to multiple accounts, the military wanted more 
troops to chase Al Qaeda but Bush and Defense Secretary Donald Rumsfeld would 
not supply them because they would eventually be needed for Iraq. One test of 
a leader, in business or war, is whether he can prioritize and persevere. By 
sending only a tenth as many troops to Afghanistan as to Iraq, 

Bush failed that test 

and Osama lives to fight another day.

Bush gets credit for ridding the world of Saddam Hussein, an evil man. But 
even his aides now admit that Saddam was not an imminent threat. The 
president went to war in Iraq despite intelligence he knew to be sketchy and 
in the face of opposition from global business partners he would need 
afterward to share the costs in blood and treasure. After a fine campaign to 
capture Baghdad, poor management of the occupation led to a series of 
counterproductive decisions, from insufficient troop strength to disbanding 
the Iraqi Army to allowing the violation of human rights (at Guantanamo Bay 
and Abu Ghraib) he had pledged to restore-all part of the Bush record as 
commander in chief. More than 1,000 U.S. soldiers are dead and $120 billion 
has been spent, with the costs expected to go into the hundreds of billions. 
(The 1991 gulf war, by contrast, was 90 percent paid for by the allies.) 

Even before the failure to find weapons of mass destruction, the marketing of 
the Iraqi subsidiary became a fiasco, full of confused and even deceptive 
advertising of the reasons for the invasion. 

This, in turn, has hurt the American brand throughout the world. 

Moreover, the Iraq war discredited Bush's new policy of pre-emption, which 
could make it harder to apply when the United States really needs it.

Elsewhere in the region, the lack of progress in the Arab-Israeli conflict is 
not Bush's fault: Yasir Arafat has proven himself a man one cannot do 
business with. The first-ever elections in Afghanistan are a victory for 
Bush, as is the decision of Muammar Kaddafi to end his nuclear program in 
Libya.

The rest of the president's performance on the No. 1 national-security threat 
of the age-nuclear proliferation-has been less impressive. 

North Korea has, by some accounts, quadrupled its nuclear threat on his 
watch, 

and American policy toward denuclearizing Iran has yet to pay dividends.

Most puzzling, after 9/11 Bush actually cut spending for dismantling loose 
nukes in the former Soviet Union that could easily fall into the hands of 
terrorists. 

When Senate Republican Richard Lugar demanded an explanation this year, Bush 
pledged additional nonproliferation funding. 

Even so, he seems more intent on building missile defense and a new 
generation of bunker-busting nuclear bombs.

PLANT SECURITY. This was once a minor issue for both business and government. 
Even after 9/11, the president for six months resisted Democratic calls for 
the creation of a new cabinet-level department of homeland security. Finally, 
Bush established the department and tripled spending. Airport security has 
been federalized and hospitals are developing better early-warning systems 
for bioterrorism. Coordination among different agencies has improved. Bush 
claims without offering proof that 75 percent of the Al Qaeda leadership has 
been caught, though 

experts agree that the organization has decentralized and spread in the last 
three years.

The issue is whether Bush has shown the sense of urgency and follow-through 
necessary to prevent another attack. Terrorist watch lists are still a mess; 

new technology 

has not been fully implemented at the still-porous borders (only 1,000 agents 
patrol the 5,000-mile Canadian border) 

or at the FBI; 

the money for first responders and local fire departments 

has been cut since last year; 

a mere 2 percent of cargo is inspected at highly vulnerable American ports; 

the railroad system is unsecured; 

only a fraction of checked baggage on airliners is scanned. 

Recently the GAO found that even though chemical plants are "attractive 
targets for terrorists," the chemical industry is still not even required to 
assess vulnerabilities,

much less take action, because Congress and the administration backed down 
under pressure from the industry.

An effective CEO doesn't just preside and delegate; he reaches down into the 
ranks to make things happen and find the truth. Bush has been slow to spend 
the antiterrorism money authorized by Congress and 

opposes protection for the whistle-blowers who first alerted the public to 
the security lapses that allowed the attacks. 

Accountability has been absent. 

After months of resistance, Bush established the 9/11 Commission 

only under pressure 

from 9/11 widows. His administration cooperated reluctantly 

and is resisting the commission's recommendations.

Nonetheless, the war on terror remains an asset for the president. While Bush 
officials say another attack within the United States is inevitable, none has 
occurred since September 11, 2001. Elsewhere in the world, terrorist 
incidents are at a 20-year high.

HUMAN RESOURCES. An educated work force is critical for any enterprise, and 
the president undertook the most significant education reform in a 
generation. Working with Ted Kennedy, he won passage of the No Child Left 
Behind Act, which imposed federal accountability for the first time. While 
critics complain that 

after-school programs have been cut 

and that schools need more money to implement the new standards, Bush has 
increased federal funding for education by 65 percent since 2000. 

The rest of his "compassionate conservative" agenda 

is largely unfulfilled.

Health-care costs have risen 36 percent in four years, a burden that falls 
heavily on business. Any CEO would want to reduce those costs but Bush has 
offered 

no comprehensive plan to cover the 45 million uninsured Americans or 
otherwise overhaul the system. He has proposed bills to cap malpractice 
awards and to allow small businesses to band together to bargain for lower 
insurance rates. But these wouldn't do much to dent the problem.

Bush's big health-care achievement was passage of a $400 billion 
prescription-drug benefit for Medicare recipients. But 

in a major concession to drug companies, the bill bans the reimportation of 
much cheaper drugs from Canada 

and prevents the government from negotiating lower prices through bulk 
purchases. 

This is like a company telling its supplier that 

it wants to pay 

higher prices.

STRATEGIC PLANNING. Despite plenty of grand talk about vision, few presidents 
or CEOs think much beyond their time in office. Bush insists he is different. 

On reforming entitlements, he has accomplished nothing so far 

but is offering a plan for overhauling Social Security by allowing private 
investment for a better return. With baby boomers set to begin retiring in 
2011, this is gutsy. But 

in addition to potentially 

jeopardizing retirement savings in the volatile stock market, 

his plan offers no way to pay for the $1 trillion or more in transition costs 
to a new system.

Bush's environmental record has been savaged. 

He has offered 

no leadership on global warming or on preserving wetlands and other open 
public spaces. While the EPA has moved aggressively to impose new regulations 
on diesel fuel, 

its lawsuits to enforce air-pollution regulations are down 75 percent in 
three years. 

Washington still won't force Detroit to improve its miles-per-gallon 
standard, though Bush has begun to fund research on hydrogen cars. 

As oil prices pass $50 a barrel, 

Bush has cut support for renewable energy and offered plans for more drilling 
at home, 

which will not do much to reduce dependence on foreign oil.

The president failed to get an energy bill passed,

 in part because it contained so many giveaways to special interests, 

many of them apparently negotiated by Cheney 

behind closed doors 

with lobbyists from Enron 

and other energy companies. 

This preference for corporations over consumers and for secrecy over openness 
has permeated the administration.

Transparency has become an issue. Budget projections have been 

repeatedly shown to be phony and politically inspired, 

which would lead to punishment or even prosecution in the corporate world. 

>From the real cost of Bush's Medicare plan to the real cost of his war, 

truth tellers have often been intimidated internally 

or drummed out of government.

Bush's longest-lasting impact may be on the courts and the Constitution. 
Although he has not yet had a Supreme Court vacancy to fill (three or four 
are expected to open up in the next four years), the president has made it 
clear through his lower-court appointments that 

he favors placing only conservatives on the bench. Unlike past Republican and 
Democratic administrations, 

no moderates need apply. 

And Bush backs at least two constitutional amendments that would change the 
Bill of Rights, one banning flag burning, the other gay marriage.

As they make their final assessments, shareholders will also have to evaluate 
what President Bush has done to the tone of American politics. How much of 
his admitted failure to be "a uniter, not a divider" was his fault, and how 
much the fault of his adversaries? Did he squander the unity and sense of 
purpose after 9/11 by playing to a narrow conservative base, then rushing to 
war? Or was he simply sticking to principle and staying the course? 
Shareholders in the United States will complete their job-performance 
analysis on Nov. 2.

With Rebecca Sinderbrand, John Barry, Holly Bailey and Jonathan Murad