A Crisis of Competence
By Shawn Brimley
Like many of you, I've spent the last week trying to wrap my mind around the woe on Wall Street, and how it will affect those of us on Main Street. I watched all the Sunday talk shows and read the press accounts, but I remain confused. Like a drooling idiot, I've watched my portfolio take a hit, and while I am not persuaded by my financial advisor's advice to do nothing, that's exactly what I'm doing. I fancy myself a decent national security analyst, but on this stuff I am, well, incompetent. There - I said it. I guess my dreams of being SEC Chairman are over!
But seriously, it seems to me that the dramatic erosion of investor confidence stems from a profound crisis in national competence. We all share some collective blame here: for allowing sub-prime lending practices to get out of hand, for continuing to consume far more as a nation than is responsible or reasonable, and for not demanding that our elected members of Congress ask tough questions and refuse to "go along" with the crowd. In fact, we've done the opposite. We have embraced easy money, we've elevated unsustainable consumption to the standing of a moral value, and we've sidelined politicians who've dared to stand in the way.
But the largest share of blame should go to those who fancy themselves in charge - to the Bush administration - for feigning competence, inflating expectations, for ignoring evidence to the contrary, and for blaming everyone else but themselves when things go bad.
Sound familiar? It should. The basic flawed economic assumptions that have brought our markets to their collective knees are similar, in scale and scope, to those that have plagued America's foreign policy.
Both the economic crisis and our foreign policy failures are linked to three problems:
1. The tendency to see the world as you would like it to be, rather than viewing the world as it actually is: The current economic crisis has been brewing for years, yet it seems as though the Bush administration was caught totally off guard. America has a long history of this problem. From the failure to detect the implosion of the Soviet Union, to the magnitude of the terrorism threat before Sept. 11, to the beginnings of an insurgency in Iraq, the history of America's national security decision-making is usually a cautionary tale in the temptations of hubris.
2. An inability to understand or accept the inherent complexity of human systems: More than five years removed from the decision to invade and occupy Iraq, it is breathtaking that smart, well-intentioned people in the Pentagon, the White House and in Congress, could have been so spectacularly wrong about the ability of the United States to affect political outcomes in a country half-way around the world. Similarly, it was spectacularly wrong to expect markets to behave in a rational manner, and limit deep exposure to questionable securities, in the absence of really any decent oversight or accountability mechanisms. American force alone cannot create a democracy, and unfettered free market opportunism is no way to run an economy.
3. A failure to detect threats early and adapt quickly: The history of the first three years of the war in Iraq show that the Bush administration failed to understand what was happening there, and, more importantly, when it began to understand, failed to adapt rapidly to changing circumstances. Indeed, perhaps the most important contribution Gen. David Petraeus (and others) made during 2007 was to detect the magnitude of the shift happening in Anbar and rapidly adapt U.S. strategy accordingly. The current economic crisis shows all the signs of the same mistake. Let's hope the plan being debated is sufficient and not too late to make a material difference.
If you doubt that our foreign policy problems and economic troubles are grounded in similar flaws, well, consider that the Bush administration has transformed nearly overnight from faith-based deregulators to economic interventionists, and over the last few years (thanks principally to Defense Secretary Robert Gates) has adopted a more realistic approach to several of America's foreign policy challenges (for example, we are talking to Iran and dealing with North Korea).
If my time thinking about America's national security has taught me anything, it is to understand what you know and appreciate the value in understanding what you don't. The height of foolishness in foreign policy and economic affairs is to delude yourself into thinking you are more competent than you are. If we are to arrest declining trends in our economy and foreign policy, it will be necessary for many more to humbly declare, "I am incompetent."
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