2008 Elections: Not a Time for Business as Usual

Can you say: "Monroe Doctrine?" Can you say: "Roosevelt Corollary?" Good. Hold that thought.

In case you haven't noticed, over the past week, the mainstream media, which two weeks ago seemed only capable of talking about Sarah Palin, has belatedly discovered the carnage on Wall Street and in the U.S. financial markets, and they're now focusing, almost exclusively, on stories that imply that the U.S. is headed for a repeat of the Great Depression.

That story line has gained so much prominence that, for probably the first time in anyone's memory, the two final, major-party Presidential Candidates found themselves forced to discuss, recently, whether "the crisis" justified cancelling the first, 2008 Presidential General Election Debate. When a topic outranks a network- scheduled t.v. broadcast, you KNOW it's important.

In the overall scheme of things, I could have lived very easily if the date of the debate had been postponed.

Now don't get me wrong, I do understand that the U.S., through personal and institutional greed, ignorance and consumer abuse, has come very close to absolutely destroying its own economy. I just don't happen to believe that this problem can be fixed with a one-time cash infusion -- even if it is for $700 billion.

I must admit, I've been watching very closely for any hint of leadership, during this critical time, and I have been disappointed that both men seem to be reading from very similar scripts. It's true that Senator Obama seems to be the better reader, but that's what you expect when one candidate was elected president of the Harvard Law Review, and the other finished 894 out of 899 students, in his own college graduating class.

While I have kept one eye on the "horse race," I've been paying even more attention to an even bigger story, the one about the increasingly defiant and aggressive moves by Russia, led by its Prime Minister, Vladimir Putin, to provide weapons and conduct joint military operations in Venezuela, right here in the Western Hemisphere. In fact, Venezuela, which has just borrowed $1 billion from Russia to purchase 24 military aircraft and 53 helicopters from them, in addition to 100,000 Kalashnikov automatic rifles and other armaments, has also recently hosted two Russian TU-160 nuclear-capable bombers and is expecting to welcome four Russian nuclear-capable battleships, in the not-too-distant future.

Shockingly, all of this is happening in direct defiance of a weapons embargo imposed on Venezuela by the U.S. in May 2006. By their actions, Venezuela and Russia are making it clear that they have no respect whatsoever for the authority of the U.S. in these matters.

Add to that the fact that Russia has publicly stated that it plans to initiate nuclear energy cooperation with Venezuela and that it also plans to provide weapons to, and conduct joint military exercises with, the Cubans. It's long been an open secret that U.S. global economic power has always been a direct function of its superior military power. Today, however, nations such as India claim a standing army of 2.3 million people and China claims a military force of 2.8 million troops. By comparison, there is the unfortunate perception that the U.S. seems to recycle, repeatedly, the same core group of 150,000 troops in and out of Iraq and Afghanistan, which contributes to our image of being a fading global military presence.

That belief seems to be an underlying reason why countries such as Yemen, Pakistan, Afghanistan, and, increasingly, Russia, seem to have less and less reluctance about calling the United States' military bluff. As long as we don't respond directly to these military attacks and threats, I predict, these incidents will become more frequent and will begin to occur relatively closer to home.

The U.S. is at a crossroads. It has to decide whether it is going to reclaim its former, global, military prominence and its own economy, or not, and it must do so before its enemies become so emboldened that it won't matter anymore. This, more than "blue states," "red states," lipstick or religious leaning, is the principal challenge that must be met by whomever we elect on November 4.

All of which brings us back to the Monroe Doctrine and Roosevelt Corollary. Espoused by America's fifth president, James Monroe, the Monroe Doctrine, in 1823, "drew a line" around North and South America and warned the then-powerful European nations to discontinue immediately all of their efforts to "colonize" or "interfere" in the affairs of the member-nations of the Western Hemisphere.

And in 1904, the nation's twenty-sixth president, Theodore Roosevelt, introduced his ”Corollary," which expanded on that Doctrine and further claimed the right of the U.S. to intervene to stabilize the economic affairs of small nations in the Caribbean and Central America, if they were unable to pay their international debts. It was generally during this period that President Roosevelt was fond of using a West African proverb to explain his international relations style: "Speak softly, and carry a big stick, and you will go far."

As I watch all of these events unfold, I am more and more convinced, as I pointed out several months ago, that the U.S. business model may very well be broken beyond repair and, until we change the premise upon which our economy is based, and by which our markets are driven, we are doomed to begin to look, over time, more and more like former world powers, Portugal and Belgium, than like the new global powers, China, India and Russia.

The issues that make the U.S. so similar to the economically declining Western European powers are our dramatically reduced military strength, our corporate expense control-driven need to send our manufacturing jobs oversees and our rapidly declining access to vitally important commodities, such as oil, gas and agricultural products, that are needed to sustain a modern, world-class economy.

I noticed that French President Nicholas Sarkozy, in remarks during the recent U.N. General Assembly, went so far as to call for an "overhaul of global financial capitalism." He then went on to pledge his support for state intervention to protect the French banks.

What Sarkozy said is what people tend to say when their own economy is "sucking wind," with little near-term prospect for recovery: "Let's overhaul the entire world's economic structure." But, this time, I believe, he may be on to something. I also get the feeling that there is a growing, reluctant recognition of those symptoms right here in the U.S., even though CNN, MSNBC, The Wall Street Journal, The New York Times, and other mainstream media outlets seem to have very little "stomach" for serious discourse on the topic.

I sincerely believe that there's a growing awareness that what's wrong with our economy goes way beyond the capacity of periodic Federal Reserve interest rate adjustments and one-time, emergency cash infusions to repair. There's evidence, now, that the way we have always done business and the way we still teach it in our prestige business schools may no longer be a fit for the world's dwindling resources or our national ability to make economic ends meet, anymore, for our citizens. I get the feeling that the voters, themselves, have begun to figure out that "business as usual" just won't get it this time, and they're threatening to unseat elected officials who try to take the lazy way out.

That's a good thing, but, now, we need to make sure that both of these last two candidates understand what's at stake. I honestly don't believe that our enemies are inclined to give us four more years to figure it out.




##########