Columns » Ernest Dumas

Bush’s legacy

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President Bush seems finally to be fixating on his legacy, but it has been obvious for a long time. Some people will see irony in the discovery that it is in the world of ideas where he leaves a powerful and indisputable heritage.

For our time and perhaps forever, he has put the lie to the revered shibboleth that government should be run on the model of a big business. There is no more enduring refrain in American politics than “government should be run like a business” but thanks to this president we will not have to hear it again in our lifetimes.

The theory was that the profit motive together with competition and an unfettered marketplace uniformly kept business lean, efficient and in moral bounds. Any government tethered to business and following its examples would serve people at the highest level.

Bush did not invalidate the theory alone; he had help for eight years from the captains of business at home and in the other free-market citadels who furnished almost weekly lessons on the fallacy of the business model as a template for government.

This morning, it was in the news that the bank executives who led the world financial system over the cliff took at least $1.6 billion of the first taxpayer bailout of their institutions this fall and rewarded themselves with bonuses, stock options and vacations.

Late last week, it was the discovery that Bernie Madoff, an icon of Wall Street, had defrauded investors to the tune of $50 billion in what was called history's biggest Wall Street scandal. He had run a decades-long Ponzi scheme under the approving gaze of the Securities and Exchange Commission.

Early in the week, the international engineering giant Siemens reached a settlement with the Justice Department after an investigation begun by the German government and paid the biggest fine in history, $1.6 billion, for bribing businesses and government officials around the world. Siemens joined Dick Cheney's Halliburton, Daimler, Johnson & Johnson and other big corporate bribers and skimmers who were finally chased down by government in Europe and the United States.

In the summer and fall were Lehman Brothers, AIG, IndyMac Bancorp, Goldman Sachs, Citibank and endlessly on, corporations that got a government rescue, or not, for following the enduring principles of competition and the market.

Ken Lay and Jeffrey Skilling, the Enron masterminds, helped along by the corporate accounting giant Arthur Andersen, began the work of dismembering the theory in 2001 as Bush was taking office.  They were just the beginning of the corporate chieftains, Wall Street heroes each one, who turned out to have cooked corporate books to reflect hugely inflated assets and gull investors and the public: WorldCom, Tyco, Qwest, Halliburton, Global Crossing, Adelphia, AOL Time Warner, and that list also goes endlessly on.

George Bush is not the first. Warren G. Harding had discredited the business theory for earlier generations. Harding campaigned on the slogan “less government in business and more business in government” and in his acceptance speech he declared, “I decline to recognize any conflict of interest among the participants in industry.” Henry Ford, Harvey Firestone and Thomas A. Edison stood at his side to symbolize the triumph of the idea.

Harding's business associates pillaged the government but it took a few more years of corporate modeling under Coolidge and Hoover for the idea to fall into disrepute, but then only for a couple of generations.

George W. Bush represented the final renaissance of the idea. Never mind that as a businessman himself Bush had failed over and over but finally walked off with a lot of money from three business deals arranged by his father's political cronies and to which he made no contributions that anyone was ever able to detect.

But a month after his inauguration, Industry Week rhapsodized that, finally, the world would see what could be done when government was run like a business. Bush was the first president with an MBA degree, from Harvard no less. He picked the CEO of Halliburton (well, Cheney actually picked himself) as his vice president and filled his cabinet and senior positions with former manufacturing CEOs, seven of them.

One after another management expert extolled the careful business style and strategy of the new president. “Like the best-intentioned private-sector executive, Bush has his own clear plan,” one said. America was about to see how the national government for the first time could be turned into a lean, efficient and moral instrument of service and unimpeded economic progress.

Exactly how did that work out?

Not so well. Never in history has there been such a cascade of business scandal, not in numbers or magnitude. Government, on the other hand, has never for any comparable period demonstrated that degree of corruption and ineptitude — unless it is the past eight years.

All of it cannot be laid at the door of the Bush administration, some having started years and even decades earlier, but the reckoning came on his watch because the word went out that the gates were open. Government was not a monitor but a partner that believed religiously in the efficacy of what you were doing.

Who believes it now?

 

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