On the Contrary

We really are at a crossroad and the issues that we face will require completely new thinking.  Although our President understands this concept, he has surround himself with experts in the old thinking and this worries me greatly.  Here are some cogent examples:

• Afghanistan cannot be solved by applying the lessons from Iraq.  In fact it is possible, that Afghanistan does not need to be solved at all, but this will require entirely new thinking about what is possible and whether it is worth the cost.
• We are in a recession approaching a possible depression and the experts have told us that we need to stimulate the economy with spending and to err on the over spending side which is the overwhelming lesson from history.  What did we do?  We loaded up the stimulus package with questionable tax cuts and were skimpy on the infrastructure spending (Thanks Republicans) which may make it ineffective.  Why is that?
• We all agree that the crisis is being caused by the housing/mortgage bubble.  The issue is to stabilize prices but is complicated by the way the loans were broken up in securitized debt instruments.  President Obama has offered a package that deals with the tip of the iceberg, but it needs to go deeper and allow for bankruptcy judges to modify loan agreements and principle needs to be re-evaluated.  Once again we are up against small thinkers in Congress.  Why are we afraid to be bold?
• The banking crisis is very complicated as are the proposed solutions (insurance, more preferred stock, nationalization).  The essence of this crisis is that banks hold more liabilities than they do equity, and therefore have no ability to lend.  Many of the solutions being offered are overly protective of banks and stockholders, and not so protective of taxpayer dollars (Heads the banks win, tails the taxpayer loses).  The solution will require all to pay a dear price with the possibility of some long-term recovery for the taxpayers.  So why aren’t we nationalizing the banks and getting on with it?

I could go on and on including transportation, alternate energy, and health care.  So why when we require bold new thinking are we being so timid which will get us nowhere?  Well part of the answer is the politics.  Are people ready for big changes?  I actually think they are and Washington is way behind the power curve on this one.  The other part of this answer has to do with who we have put in policy positions to make these changes.

The problem has been eloquently presented by Gary S. Vasilash in a piece in AutoFieldGuide.com called “Fire the Generals” sent to me by my good friend Tom Griffin.  Although the article focused on the problem of the failure of car manufactures and specifically their management to understand the new markets, it applies directly to all our great issues that are challenging us today.  The lesson goes something like this:  Using the military analogy, when the type of conflict changes and a new strategy is required, fire the old generals who are still fighting the last war and bring new generals who understand the new conditions and their new adversary.  Our Iraq strategy change followed this prescription.  Mr. Vasilash makes the point that the management that has brought the auto industry to its knees are ill-equipped to manage in a whole new direction.  They are too wedded to the culture they were brought up in.

My own experience tells me that this is a basic truth.  In my 31 years working for the Feds, change was always a buzzword, but by leaving the existing management in place that was comfortable with the old ways of doing business, we always fell back into old patterns of behavior and management.  Real change is terrifying because it is about leaving your comfort zone and it is usually accomplish only in dire circumstances.  The most afraid, apparently, are the Republicans who are sounding more hysterical and shrill as they fight to reestablish their control with old and failed policies.

So both our President and we must follow Mr. Vasilash’s truism.  We must fire the generals.  Whether it is a real war in Afghanistan, or the war to restore our economy, old thinking is no longer viable and we need new leaders who are not wedded to the status quo, who can see options we did not even consider.  For us that means firing both Democrats and especially Republicans who are not ready for bold solutions.  For our President it means getting outside the Washington think tanks and their products to put people in charge who not afraid of destroying the conventional wisdom.  When we see the solutions to the problems I have identified in the start of this piece, we will see if he has really done this or still needs to find new generals.  So far in the stimulus package we thought small.  Remember that we can fire some of the generals in 2010 if they are still resisting change.