LETTERS FROM THE GLOBAL PROVINCE

GP 9 January 2008: One Nation Indivisible: All  Fired Up

Breakthrough.  The Obama-Huckabee win in Iowa broke new ground, no matter what follows.  The scribes have not described thi s new phenomenon adequately, and it’s important to understand.  With all the splitting of hairs, none of the candidates on either side, including the winners, really have offered anything new.  The Republicans all propose to do the same things about war, terrorism, healthcare, taxes, blah, blah, blah. The Democratic offerings are all knockoffs of what has come before.

But Obama and Huckabee are both talking about inclusiveness.  Huckabee wants to do something about Republicans who are earning less than $100,000 a year—the working stiffs.  Obama has his eye on the people who are left out.  Both are trying to alter the process to lift the tone and bring more people into it.  Obama, in particular, knows he needs Republicans and Independents to build an effective coalition and that divisive politics means stalemate.  He is all about building alliances to get results which is the key theme of the 21st century.  It is not certain that either Obama or Huckabee knows where he’s headed, but each is dead sure what he is leaving behind.  That’s encouraging.  If you enlarge your circle of friends, as they suggest, there’s a chance you’ll do something new.

Senator Clinton and Governor Romney are big-money, dollar-sign candidates who broker deals amongst assorted interests—and make sure each of those interest groups come out with a piece of the watermelon.  If money can buy the presidency, then one of them will make it.  But, as Governor Connally once learned, all the money in the world won’t do it when the stakes are high enough.  As dealmakers, both are perceived as ambiguous, elusive, inauthentic.  Both are clearly disliked by their fellow candidates.

She is further troubled by the fact that she is splitting the Democratic base with Senator Edwards, the candidate of the trial lawyers.  And, indeed, if he could get his attack-dog campaign against large corporations going, the trial lawyers would have loot aplenty for years to come.  One reasonably smart broadcast political director summed up the problem of Senator Clinton and virtually all the candidates, save Obama and Huckabee.  He noted that her campaign guru Mark Penn focuses on Microtrends, which necessarily drive you to see politics as an interest group game.  But, at last, the race and the country are about macro-trends. 

On the Republican side a few candidates are also practicing the same divide-and-conquer fragmentation politics.  Senator McCain and Mayor Giuliani have put forward responsible measures to deal with the illegal immigration problem.  Ex-Governor Romney, having read the New Hampshire polling data, proposes to ship back some 10,000,000 people or so to their home countries, as his solution to the immigration problem, and has picked up votes from McCain over this issue.  That this nativist policy is unrealistic and will never happen matters not to him in the heat of a campaign.  McCain, the most principled of the candidates on both sides of the aisles, has stuck to his guns.  Even Huckabee has pandered on this issue.

Why Doesn’t Experience Mean Anything?  The Democrats, and to a lesser extent, the Republicans argue about experience—what is it and is it good or bad?  It means literally nothing for a couple of reasons.

First, none of the candidates have much of it.  Mrs. Clinton, who has dressed up her last 35 years, styles herself as the secret leader of the Free World.  Truth is, the voters, the media, and the moneymen have pretty much eliminated anybody with real experience.  Most recently, Senators Biden (who actually knows something about foreign policy) and Chris Dodd (who has deep knowledge of some domestic issues) have disappeared without a trace.  The chaps with moxie who have done something in the past just are not in the race.  If we wanted experience, we would bring Jim Baker, Tom Kean, Lee Hamilton, and some other real worthies who have moved a few mountains out of retirement.

Both the Dems and Republicans who are left in the race, perhaps with the exception of McCain, are steeped in the stalemate warfare of the Clinton and Bush (the Younger) administrations—a wasteful destructive period which has its analogue in the brutal trench warfare of World War I.  Nothing much useful has happened, but it has not happened very expensively.  This has not been a happy period for the nation, for our intellect, or for our economy.  Our ideas are stale.  We have been inert, and have not seized the opportunity that the end of the Cold War offered our country or the world.

The Wal-Marting of America.  Twill be interesting to see what historians have to say about this somnolent transition period between 1992-2008.  In our own eyes, it was the era when America got Wal-Marted.  Mrs. Clinton, as some will remember, was once a member of the Wal-Mart board.  In Arkansas all the powers that be are inevitably doing deals with one another. 

What’s important is not that Wal-Mart has extended its reach into more of America and around the world.  In fact, it many ways, it has been useful in creating inventory turns, knocking down unconscionable margins, bringing product choice to lower class audiences in America, and setting the stage, hopefully, for a new kind of retailing.  It is trying to repeat this formula in China, Mexico, and other developing countries.  It has pulled back in Germany and is turning in halting performances in England and Japan, since it often strikes out in developed countries where its offerings and policies are off-base.

But Wal-Mart is also China’s biggest customer where it maintains its largest buying office.  It can no longer be relied on to supply the lowest-priced offerings, but it always secures the lowest-cost product, no matter what.  Clear and simple, this means quality has taken a backseat, and those offering high quality cannot really make a living selling to this behemoth.   Commonly one now finds items in its stores that are simply overpriced.

In Wal-Mart’s America, quality has gone out the window.  That deterioration has radiated into our politics, our education, our government, and more.  The Clinton Administration, and subsequently the Bush Administration, opened the China floodgates—without any decent controls—and we have been overwhelmed with defective and, indeed, sometimes harmful offerings.  At the same time, a continuous stream of Chinese bribes and other financial goodies have soiled our political system during this era.  Who wants to draw on this body of experience where we have sacrificed both honor, quality, and our sense of direction?  Incidentally, we have met with corporate leader after corporate leader, each of whom has privately said that Wal-Marting has gotten out of hand.  Of course, Tesco, from Great Britain, has now appeared on the American scene, and it will give Wal-Mart some real competition.  Tesco is much better at marketing, an area where Wal-Mart has always been deficient.

Business Liftoff.  We have said in our Annual Reports on Annual Reports that our economy and our businessmen have been adrift.  They have no strategy, but have proceeded opportunistically, heavily driven by the short-term impulses of our investment banking and private equity sectors which are unstable and rather out of control.  Right now the biggest companies in America are hitting a brick wall.  Citicorp, Merrill Lynch, United Airlines, Wal-Mart, General Motors—the list is too long to recount.  They need a different firmament if their stars are to rise.  A change in our politics is no minor matter; it could pull America’s economy out of a nosedive that started in the late 1970s. 

Only when we rethink our politics will business get going again.  Without a reasonable political process that better allocates national resources and pushes collaborative behavior, we will continue to have an economic stalemate where we have illusory growth (based on federal statistics that under-report inflation and have other defects) accompanied by the slow liquidation of American business.  In “Boundary Jumpers,” we argued that we need to get out of our narrow bailiwicks if we are to have success in a number of spheres.  The trouble with the politics of division is that we wind up living in small, isolated pockets, losing the leverage afforded by larger interconnections.

One Nation Indivisible.  What’s clear for politics and business is that segmentation, separation, division, and slicing and dicing won’t do it.  Believe it or not, businesses are spending painful amounts of effort today deciding which customers to leave outside the tent.  Politicians talk about fractions rather than about the whole.  When you are dealing with large numbers—something that happened when the nation soared about 100 million—a mindset set in where we began to think about “we” and “them.”  The task is to think about “us,” because otherwise we are simply dysfunctional.

P.S.  It’s wonderful to have Senator McCain around.  Surely he is the ‘honor’ candidate—all alone in his halo.  He has the look of a Don Quixote.  While some of the others talk religion, he owns the moral ground.  It’s yet to be seen whether honor can be rewoven into the political process.  With a more finely honed message, he could capture the votes of those who just want things done ‘right.’  Straight talk and proselytizing are not good bedfellows.

P.P.S.  Barak Obama has taken “All Fired Up” as the fight cheer for his believers.  On the campaign trail in Greenwood, South Carolina, he learned from Edith Childs, a local councilwoman and clear political power, about getting ‘fired up.’

P.P.P.S.  Nobel Prize winner Al Gore knows a thing or two about the China traffic.  In the swish days of Clinton, he made a ‘courtesy stop’ at a Buddhist temple in San Francisco that was linked to a lot of cash changing hands, supposedly without Gore’s knowledge.  He’s since turned from hand-warming to global warming.  Like his friend Bill, he is now trying to atone for errors of omission and commission by preaching to the choir.

P.P.P.P.S.  Theodore Roosevelt, the greatest president of the 20th century, came into office in 1901, propelling us out of the Robber Baron era and the ambiguities brought about by the unbridled dominance of industrial America.  His Square Deal put the country on a firmer footing.  Now we have to see if we can do the same trick as a service economy where global trends are shaping our lives.  What will we call it—the Real Deal? How do we maintain our identity—and about everything else—in a global economy that is largely out of control?

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