This country is HUNGRY for REAL LEADERS

[PEZGolf]

In yesterday's "USA Today", on page 6B (the Money Section), Del Jones has an article about the "leadership crisis" in this country, and the number of authors and analysts who have written about it---including Lee Iacocca in his book, "Where Have All the Leaders Gone?". These people are right, and here are cases in point:

1. President Bush has the LOWEST approval ratings of any modern day President except Richard Milhouse Nixon, and could NOT get the Congress to pass his original "Bailout Bill" because of the revolt by HOUSE REPUBLICANS on throwing taxpayer money to BAILOUT Wall Street and GREEDY bankers.
An incumbent President was REJECTED by the Representatives of HIS OWN PARTY!!!

2. Alan Greenspan, when grilled in front of the Congressional Committee last week, was asked why he WAS SO WRONG in saying a few months ago that the housing crisis would end soon and "everything would be just fine" gave a simple and truthful answer------------ "I don't know". Here is the man who loosened the strings to allow money to flow, and downplayed the REQUIREMENT that the FED regulate and audit the banks in the Federal Reserve System to make sure THEY WERE MAKING GOOD MORTGAGE LOANS!!

What about the following----Stan O'Neil of Merrill Lynch---FIRED!! Chuck Prince of CitiGroup---FIRED!! Carly Fiorina of Hewlett--Packard---FIRED!! What about James Cayne of Bear, Stears----who played golf and bridge while his company collapsed? What about Angelo Mozillo, who duped Ken Lewis into buying Countrywide S & L, and now the Bank of America is saddled with the bad mortgage loans, has cut its dividend in half and watched as its stock price is half of what it was BEFORE the ill-fated purchase of Mr. Mozillo's company!!!!

I have had 24 years of banking experience at two different regional banks. When I was a Commercial Loan Officer, my boss told me that we would lend only to companies that "respect debt and risk"---THEY ARE SURVIVORS!! Bankers are supposed to be "risk managers"----so why did Bank of America buy a S&L; that was just the opposite and PAID TOO MUCH MONEY FOR A PORTFOLIO OF SUBPRIME MORTGAGE LOANS? How much longer will Ken Lewis keep his job as CEO? He is "skating on thin ice", and now that the US Treasury has purchased $15 billion of senior stock in the Bank of America, there will be people OTHER THAN THE obsequious Board of Directors watching Mr. Lewis' decisions and DETERMINTING HIS COMPENSATION. Those people are called the TAX PAYERS OF THE UNITED STATES!!

FAILURE OF LEADERSHIP? YOU GOT THAT RIGHT. Is Obama's election a reflection of the public being FED UP with George W. Bush, Ken Lewis and his banker friends, James Cayne and his Wall Street friends, Rick Wagoner of General Motors, etc.? YOU GOT THAT RIGHT. Will things get turned around in this country? ONE CAN ONLY HOPE.

[beisenhauer]

If we have a dearth of leadership in this country, or anywhere else for that matter, it stems largely from one thing: hostility to independence. A leader must first be independent. I don't mean that they have to swim against the current all the time, but whichever direction they choose, the choice must be based on their own judgment, not the opinions of others. Our current culture is actively hostile to independence. We want so-called "leaders" who will "build consensus" and "consider all points of view." A consensus builder sticks his finger in the air and discerns the direction of the popular wind, persuading dissenters not to rock the boat to much; he is the ultimate follower. A leader says, "Here is what we ought to do and why; those who agree may come along."

As for the financial crisis, I'm not a banking expert, but in my view the problem stems not from insufficient government regulation but from too much. Government policy, regardless of the administration in the White House, has long been to encourage consumption and debt while discouraging savings, investment and productive activity. Progressive income taxes, capital gains taxes, deductible mortgage interest and above all, artificially low interest rates created by the Federal Reserve and its fiat currency all contribute to this. This is not surprising when you consider that the government itself is the largest debtor. Add to this banking regulations that require, or at the very least strongly encourage, banks to make high-risk loans with the promise that the risk will be taken on by Fannie Mae and Freddie Mac (see the CRA), and the promise of bailouts should your institution fail, and you hardly have a recipe for sound financial management. In an "economically normal" situation, you will always have a few bankers that make too many bd loans and go out of business. But why so many? Why now? Only because the government created the environment and the incentives that made those loans appear profitable.

[alf174]

The General Motors problem, and the auto industry as a whole, started a long time ago (20-30 years), well before Rick Wagoner came along.

IMO, the recent crisis in the finance sector was the accumulated natural result of deregulation in that industry that started probably back in in Reagan's term.

[PEZGolf]

The General Motors problem, and the auto industry as a whole, started a long time ago (20-30 years), well before Rick Wagoner came along.

You are right about the auto industry, but Rick Wagoner has been stubborn about not adapting to new times and smaller vehicles. He has had the support of the Board, but if a merger with Chrysler takes place (with Cerberus, the owners of Chrysler and 49% owners of GMAC), I do not think Mr. Wagoner will be chosen to head up the new company. The current COO is more likely to be picked, or the Head of Chrysler, who is hand-picked by Cerberus.

In my judgement, the financial crisis really began in 1999 when the Glass Steagall Act was replaced with the Gramm-Leach-Bliley Act, that permitted financial institutions to get into new fields (banks could sell insurance and securites; insurance companies could get into new instruments like credit default swaps---which are what doomed AIG). As Alan Greenspan has said, the "experts" thought the managements of the institutions, the Boards, and the different industries would be smart enough about risk management to avoid putting the existence of their companies in jeopardy. As he said before Congress, he was wrong---they could not be depended upon to regulate themselves, and that is why Bear Stearns and Lehman Brothers failed, Merrilly Lynch, Washington Mutual, Wachovia and Freddie Mac and Fannie Mae had to be merged into other entities. Once the "genie was let out of the bottle", it became impossible to put it back until the situation became a full blown crisis that threatened the US and other countries' financial systems.

[alf174]

You are right about the auto industry, but Rick Wagoner has been stubborn about not adapting to new times and smaller vehicles. He has had the support of the Board, but if a merger with Chrysler takes place (with Cerberus, the owners of Chrysler and 49% owners of GMAC), I do not think Mr. Wagoner will be chosen to head up the new company. The current COO is more likely to be picked, or the Head of Chrysler, who is hand-picked by Cerberus.

IMO, it'll be political suicide for any elected official in the government to be involved in making available funds for the merger. A projected 30,000 lost jobs in Michigan (plus untold others elsewhere) is a bit too much to swallow. GM's press release tomorrow is reported by the local evening news not to include merger plans but more layoffs.

As far as Wagoner being responsible, he's only been in the top seat for two car development cycles; a very short time in the auto industry. Change in the auto industry takes a relatively long time compared to others. Heck, it takes 2-3 years just to get a new paint and assembly plant built and running, model changes in existing facilities half that time. Too bad about the banking industry not able to be trusted to take care of their own house; I suspect the Dems will be throwing some regulations and oversight back in the mix.

[PEZGolf]

Too bad about the banking industry not able to be trusted to take care of their own house; I suspect the Dems will be throwing some regulations and oversight back in the mix.

You are right---some of the Democrats are calling for a "super regulator" with the title of "systemic-risk regulator', according to the "Wall Street Journal". They have decided that one of the problems was separate regulators for banks, insurance companies, brokerage houses, etc. and NO regulator for hedge funds and other newer financial industries. They want a new agency empowered to oversee ALL financial firms. At the same time, some moderate Democrats are warning against going "too far" and over-regulating. Hopefully, they will win out vs. the more radical ones.

[alf174]

I gotta wonder that the people that are capable of real leadership and vision have shrunk away from public service. Its no wonder that the Obama also got the popular vote; like moths to a flame. I hope he is successful for the nation's sake.

[PEZGolf]

I gotta wonder that the people that are capable of real leadership and vision have shrunk away from public service. Its no wonder that the Obama also got the popular vote; like moths to a flame. I hope he is successful for the nation's sake.

I AGREE WITH YOU. I hope that he appoints Colin Powell or retains Robert Gates as the Secretary of Defense.

[PEZGolf]

Here is one leader in trouble in her home state:

"The troubled economy that helped sink Alaska Gov. Sarah Palin's hopes of becoming U.S. Vice President now is undermining propects for buidling the $30 billion natural-gas pipeline she touts as her administration's signal achievment.

As Gov. Palin returns from the campaign trail, she is finding a very different landscape than when she left Juneau in August. Today, the golbal economic slowdown is making it harder to maintain momentum behind the project.

The state faces an increasingly gloomy future if construction id delayed, since the majority of the state's unrestricted revneue comes from energy-production taxes and royalties---a situation unlike any other state. Without a gas pipeline, the annual dividend checks Alaskans get would eventually dwindle and resident could face THEIR FIRST EVER INCOME TAX."---Wall Street Journal --11-19-08

When officials face real problems, we find out if they are real leaders and solve the problems or not. If the deterioration in the economy forces postponement of the pipeline, and Governor Palin must drastically cut the state budget or impose an income tax, then what will she do? As the Mayor of Wasilla, she raised the sales tax to pay for the bonded indebtedness of the new sports complex so her son and his buddies could play hockey indoors. She was a "tax and spender", and left the project in the red for $1.3 million!! It is easy to say you are a fiscal conservative. The proof is in the putting-----do you put the emphasis on NO new taxes or "Gee Whiz, people, we HAVE to put in an income tax because of the global economy---it is NOT my fault."

[Shindig]

The proof is in the putting

It usually is.

[zeg]

Note: the following is not an analysis of Alaska's position, but a general observation.

It is easy to say you are a fiscal conservative. The proof is in the putting-----do you put the emphasis on NO new taxes or "Gee Whiz, people, we HAVE to put in an income tax because of the global economy---it is NOT my fault."

This is one of the problems with politics, at least as I've seen it. Leaders are forced to declare that either they're for A or against A, for B or against B, etc. When someone comes along with a nuanced position, they don't generate compelling sound bites and tend to get blown out of the water as flip-floppers.

One can be generally opposed to increasing taxes and yet find oneself in a position where the only reasonable course is to raise taxes. A good leader, in fact, will recognize circumstances that require deviation from their general policy. The bills have to be paid somehow -- it's not enough to say that raising taxes is "bad," you also have to propose the solution that's "better." I completely agree with your sentiment -- true leaders rise to meet challenges. True leaders take responsibility for the outcome, even when it's bad, and even when it's not entirely their fault. "The buck stops here."

[Fat Slice]

I always read proclamations from politicians from BOTH parties that start off "_____ pledges to cut spending for _____"

But I *rarely* (if ever) read a headline saying "_______ cuts spending for _______"

Lots of pledging, not much actual cutting.

[PEZGolf]

Note: the following is not an analysis of Alaska's position, but a general observation.

You are right, and some of the best leaders that I have seen or read about among our Presidents are George Washington, who was almost fired as Commander-in-Chief of the Continental Army for his poor leadership in the battles around New York City in 1776, Thomas Jefferson (he gets credit for the Louisiana Purchase but he did hurt the young American economy with his embargo on goods from Great Britain), Andrew Jackson (who is the forerunner of modern day Presidents with his strong leadership), Abraham Lincoln (the book "Team of Rivals" tells about Seward, Chase, and Bates running against him and then joining his cabinet---Barack Obama has read the book, and drawn inspiration from it), Teddy Roosevelt, FDR (imagine trying to deal with the Great Depression and World War II at the same time), Harry Truman (I believe the phrase "The buck stops here" was on a desk plate in the Oval Office when he was President), JFK (he admitted that he messed up by trying the Bay of Pigs invasion---a real fiasco), and Ronald Reagen the air traffic controllers, the Soviet Union---the "Evil Empire, and Khadaffi found out that he meant what he said).