Last Sunday—the 22nd of September—I predicted that if no action was taken by Congress to avert a possible shutdown by Friday (the 27th), the stock market would shed 300-600 points last week. That prediction was pretty much spot on—but much closer to the low end of my prognostication.
I figured that if no action was taken by Friday, the do-less-than-nothing 113th Congress would not get their act together and financial markets would sniff disaster in the air and react accordingly. I must confess that I thought the market sell-off would be far more disastrous. But that was not to be. In fact, none of the major banks or institutional money managers panicked and we only lost about 70 Dow points on Friday. I still wonder why that I was in the minority about the prospects of a black Monday.
Now fast forward about 30 hours: In the early morning hours of Sunday, September 29th, the divided-amongst-themselves House voted to add a rider to the funding bill that basically said “delay Obamacare or we will shut down the government.” Never mind that both the Senate Majority Leader, Nevada Democrat Harry Reid, and the President both promised to “veto” ANY BILL THAT DELAYED OBAMACARE. Yes, we are back to insanity land as I described it in the blog posting below.
The “Greatest Gall Award” of the weekend goes to California House Representative Darrell Issa, who, when asked by a reporter “…When this fails…”—Issa went a bit unhinged on a very competent reporter:
“How dare you assume failure. How dare you! How dare you! How dare you?!
How dare he? Once again, we have another member of this confused Congress unable or unwilling to face reality. I can only tell Representative Issa with respect that the reporter who asked the question isn’t the only one to “dare” assume failure. By the time he jumped down that reporter’s throat, every reputable news organization and any CSPAN watcher knew it was over. Failure was inevitable. So, Congressman Issa, before you take your anger out on a reporter merely doing his job, I ask you to take a deep breath and look in the mirror.
Now, lastly, why do I think this shutdown will have such a disastrous outcome? First, a bit of history.
In the last four decades, there have been 17 shutdown of the United States government, with six in the 1970s, each lasting longer than eight days. However, the longest shutdown happened under a Democratic president’s watch, under Bill Clinton in 1995-1996, which lasted precisely three weeks. The government said that shutdown cost the American taxpayers more than one billion dollars.
This shutdown may not last that long, but any shutdown of more than a couple of days will wreak havoc in our nation and reverberate around the world. Why? The capital markets have never been more inter-connected or more global in behavior. That means that the effects of this shutdown will likely begin in Japan tonight [and the rest of Asia], which are the first major markets to open tonight, Sunday, at 8 pm Eastern Standard Time. That will be followed by Europe and then the U.S. Monday morning. This means financial markets around the globe will almost assuredly lose tens of billions of dollars of value, with the worst effects to be felt here, in the U.S. This will mean that people’s IRA’s will suffer, as well of course any other stock market accounts holding people’s savings.
The stock market is only a small part of the ill effects of a shutdown. Tens of millions of government workers will be “furloughed,” and may or may not ever recover that pay. At a time in which our recovery has been weak, this is absolutely the worst thing that could happen now. wait—I take that back.
The worst thing that could happen comes in about 18 days if the Congress and the president fail to pass a bill to pay our debt by raising our debt limit. The last time we came even “near that cliff” was in August of 2011.
The stock market dropped well over 600 points in a single day (and that followed a 500-point down day a few days earlier). In all, the stock market surrendered a whopping 15 percent in two weeks, the worst performance since the fall of the House of Lehman which sparked the financial crisis of 2008-2009. And remember, that time we averted a disaster because the Congress voted to pay our bills, albeit in sloppy fashion in the final moments. But even though we averted that cliff, Standard & Poor’s still downgraded our credit rating, which was what really sparked the disaster in the financial markets.
So we watch and wait. Full disclosure: I have a number of large short positions in the stock market because nothing that has happened this weekend came as a surprise to me. However, it is important to note that there are many, many people smarter than me that feel that I am making a tempest out of a teapot. Time will tell. But with this Congress—and a president who won’t mind a shutdown all that much, since it means that Republicans will likely lose ground in the 2014 mid-terms if any shutdown tales place—I bet my money on red. That is, we will see a great deal of red before the bouncing ball falls back into the black.
Stay tuned for frequent updates!!
—Jeffrey A. Krames, September 29, 7:30 am CST
“Insanity: doing the same thing over and over again and expecting different results.”
I can’t believe the Congress, more specifically—the U.S. House of Representatives—has done it again. For the 40-something-time, the House has voted to pass a law ONLY IF ObamaCare (The Affordable Care Act) is de-funded. Since the chances of that happening is absolutely zero, there is no getting around this fact: this was an act of crazy people (not a word I have ever employed in my writings). These are the people that are well paid to represent the will of the people, and obviously shutting down the government is not what we sent these people to Washington to do. Yet even cautionary notes from people like Karl Rove and the Wall Street Journal Op-Ed page (not exactly bastions of the left), could not convince them to take a saner path. And they don’t even know—or care—that the choice they have just made may just shut down the U.S. government.
However, that is precisely what I believe the House has just set in motion. And if that happens, it will cost the U.S. much more than the $100 million a day it has estimated.
Before explaining how, here’s a few “fun” truisms. The smartest people I have ever known—people like Jack Welch and Peter Drucker—insist that leaders must “face reality” (that became Jack Welch’s mantra and his first rule of leadership). It is apparent that the 113th United States Congress can’t do even that. Never mind that both chambers of the current Congress has gotten less done than any other Congress since the earliest days of Thomas Jefferson’s tri-tiered vision of government (and much less than the so-labelled “do-nothing Congress” that served under Harry Truman from 1947-1949).
Conventional wisdom—as expressed by pundits and politicians on the Sunday morning shows—is that the Congress will right the ship and reach a last-minute deal before October 1st. But what they fail to realize that even if that happens, much damage would already have been done. In fact, I assert that some damage has already been done.
How? Let’s look at the events of the last 48 hours to find the answer.
On Friday, September 20th, the House actually applauded themselves on their vote to defund ObamaCare.
Leave it to this House to celebrate the politics of suicide, as most Americans will blame Republicans if the government shuts down. Although, ultimately, it hurts us all, but I expect it to reap its greatest damage on the GOP in the 2104, mid-term elections.
On that same day, last Friday, the U.S. stock market—as measured by the 30 stocks in the Dow Jones Industrial Average—fell by almost 200 points, making it one of the worst days of the year (this in a year when the S&P index is up nearly 20 percent). And nearly half of that selling on Friday took place in the last half- hour of trading—after the House vote. So, if you believe Isaac Newton’s law: “To every action there is always opposed an equal reaction,” then the stock market likely fell on Friday because of the uncertainty set in motion by the House vote. All stock market participants know that the stock market hates uncertainty. That is why the market fell by well over 700 points in early August of 2011 when the U.S. lost its triple “A” credit rating (and not only has it not gotten it back, Congress has the chance to take it down another notch or two in the next 40 days). And we have not even got to the Debt Ceiling debate set for early-to-mid October, one more land mine likely to trip up this obstructionist chamber of Congress.
One point of clarification: it is not only the House that has crazies. The biggest, most dangerous individual in either chamber is not the save-my-own-hide-no-matter-what House leader John Boehner, but the junior Senator from Texas, Ted Cruz. That is the man that has vowed to spare no action in tearing down the Affordable Care Act, which he knows was voted into law by both chambers of Congress, the Office of the Executive, and upheld by the highest court in the land. He is only too happy to play scorched earth politics, while secretly (or not so secretly) plotting a run for president in 2016 (please say it ‘aint so).
So now we wait and watch. If I am correct, or even if there is a last-minute deal, the stock market will be the ultimate scorekeeper of the Kabuki theater taking place inside the District of Colombia. If a deal is not reached by 4 pm Eastern Standard Time on Friday, September 27th, then the stock market will likely lose another 300-600 points between Monday and Friday of this upcoming week. And for one, I am betting heavily on my own blog posting by shorting the market in a big way. I have lost a lot of money over the years, but not once by betting heavily against the likely acts of an irrational chamber of our government.
—-Jeffrey A. Krames, Sunday, September 22, 2013
The prospect of being hanged focuses the mind wonderfully.”
For those that have followed my recent postings, you know how deeply the recent Syrian crisis has affected me—and why. While the recent deal worked out by the U.S. and Russia on eliminating Assad’s chemical arsenal appears to be “a good first start” to the Obama administration, we must never forget the heinous crimes that Bashar al-Assad has committed against humanity. For those crimes, the only acceptable outcome is accountability—Assad must stand before the world and stand trial for what he has done. Since any use of substantial force against his regime now seems unlikely (but not completely off the table), a public and transparent trial will be the only way to honor the tens of thousands of people he has brutally murdered—and those he continues to murder to this day.
More important, it will send a signal to the world that murderous dictators will be called to account and that no leader should ever calculate that they stand above international law and the common decency of man.
Tomorrow, Monday, September 16, 2013, the United Nations Secretary General Ban Ki-moon will make public the findings the weapons inspectors that went to the site in question about a week after the August 21 chemical attack. The primary mandate of the inspectors is to determine if an attack took place and what possible agents were used in the attack—not who perpetrated it. However, I remain hopeful that the U.N. inspectors may exceed expectations by bringing forth evidence that it was indeed the Assad regime that launched the deadly missiles that carried the poison gas. That would be an important win for the U.S. and the world, for it would directly rebuke the assertions of both Assad and his partner-in-crime Vladimir Putin. That is why I hope beyond hope that the U.N. now possesses such evidence. However, that may be too much to hope for.
Why? Because Assad, knowing exactly what he had done, bombed the living daylights out of that site for five days following his horrendous crime in order to eradicate all evidence of his deed. Whether he was successful we will soon find out. Tissue samples were removed immediately by doctors on the scene and both the U.S. and the U.K. found traces of sarin gas in those samples so there is really no doubt that the attack took place. Even Putin, in his hypocritical, sometimes fabricated New York Times Op-Ed admits an attack took place, but that it was the opposition that launched it (hence the word “fabricated”). Since the U.N. is an objective body [albeit which has shown little teeth in recent decades], their word carries more weight than the U.S. and other western nations. And since Putin specifically included mention of the United Nations in that Op-Ed, it would be a win for the world if that normally feckless body points a finger against Assad.
Speaking of the United Nations, if one visits their Website, they will find its “motto” right at the top:
“Welcome to the United Nations. It’s your world.“
In our world, we should hope that Assad gets tried by the International Criminal Court in the Hague, like the fellow murderous dictator, Slobodan Milošević, the former President of Yugoslavia. Milošević was charged with committing genocide and crimes against Humanity. However, after a five-year trial in which he represented himself, he was never convicted (instead he died in a Hague jail cell in 2006). I prefer the Saddam Hussein outcome. He was also tried for his unspeakable crimes—by the Iraqi Special Tribunal for the murder of 148 Iraqi Shi’ite—but unlike Milošević, was convicted and hanged.
Like Secretary of State John Kerry said last week, “Nothing focuses the mind like the prospect of a hanging.” [He was quoting the Samuel Johnson line].
However it comes, in whatever form, the world and its victims deserve justice, at the very least.
Not negotiating from a position of weakness is one of the first rules of brinksmanship. However, if one chooses to do so, then that individual has only one weapon left in their arsenal to turn the tables, so to speak: And that is to walk away when met with an unreasonable response or intransigence.
I have had the good fortune to negotiate for a living for three plus decades. My father— Barton “Baruch” Krames—who built up a successful business from nothing, did so because he is a first rate negotiator. I am sure I got the “negotiating gene” from him. It is also the part of my business that I enjoy the most—negotiating the best possible terms for my very valuable clients.
This posting, like the previous half a dozen, is not about publishing but about Syria and how the U.S. had decided to negotiate with Russia in order to obtain a U.N. resolution to remove and destroy the huge Syrian stockpile of chemical weapons. When Secretary of State went to Geneva to negotiate with his Russian counterpart, Russian Foreign Minister Sergey Lavrov, he went with a weak hand. President Obama missed his best chance to deal a blow to the Assad regime two weeks earlier. That is when he made the worst mistake of his presidency by deciding that instead of leading, he would delegate a major leadership decision to Congress. We now know what I correctly predicted then: Congress would falter and not support their Commander-in-Chief. Obama learned a valuable lesson that he should have already known: leadership can never be delegated. The War Powers Act of 1973 gave the president ample authority to attack Assad with missile strikes without congressional approval.
There are half a dozen instances of that precedent, starting with Ronald Reagan and most recently used by Obama himself against Libya!
That is why I was so utterly dumbfounded and devastated two weeks ago this day when Obama declared that he would go to Congress for “permission” to attack Assad. He should have known that the wars waged by Bush in Iraq and Afghanistan were too fresh in the minds of most Americans and congressional leaders to grant President Obama anything like a blank check to attack Assad’s war-making targets. Of course, Obama was requesting much less than a blank check.
But no matter. The “mindset” of congress was stuck on the Bush wars and they could not stomach another one. History is full of “fighting the last war” miscalculations. The greatest example is Hitler. He knew that the mindset that existed in the leadership of other European nations [due to World War I] was too vivid for any country to pick up arms against him until he attacked Poland in September of 1939.
Back to Syria. Obama and Kerry should never have agreed to any U.N. resolution that did not include automatic missile strikes if Syria fails to comply with the agreement. First of all, why should Russia or Syria have a problem with that? All they have to do is make sure that they keep their word. And that brings us to yet one more rule of negotiating. Do not negotiate with bad-faith actors that have revealed themselves to be liars and cheaters at every opportunity. Put another way, Kerry is fighting an unfair fight: even though only Russia was in Geneva with him and his team, Assad was in the background making unreasonable demands on Russian television during the negotiations. That is what happens when an honest broker goes up against two dishonest brokers—both which are enemies of the United States.
As I have been writing this piece, word has come that Secretary Kerry has reached an agreement with Russian Foreign Minister Sergey Lavrov over the Syrian affair. In the agreement Syria has one week to account for all chemical weapons. That is an unexpected “win” for Kerry—right? After all, Assad wanted a month. But, like every aspect of this negotiation, something stinks in Denmark (well, Geneva). The only reason Kerry won that “concession” was because Assad has already moved his chemical weapons—to more than 50 sites by some reports. And since no one really knows how many weapons he possesses, he can “make it up” [the accounting and the location of the weapons] as he goes along.
Assad also knows that it will be nearly impossible to secure and destroy these weapons during his brutal civil war [he has not agreed to cease the war so that inspectors could do their job]. The magnitude of the task and the action on the ground make the logistics of the elimination of those weapons impossible. And even if inspectors get in there, they will need 2,000 inspectors (that many does not even exist) and tens of thousands of troops to protect them in the midst of a war that has already seen Assad slaughter 110,000 people using conventional weapons (which of course are not even being discussed by the U.S., the U.N., or anyone else that have any power to level the playing field).
So what have we learned: the deal just hammered out in Geneva does not include any threat of force if Syria does not live up to their part of the “bargain.” Alternatively, it includes an agreement to agree to revisit the subject of force if Assad does not comply. But any lawyer will tell you that an “agreement to agree” does not constitute anything binding. So while, in the early going, the agreement is being hailed as a “win” for the United States, I beg to differ. I see the entire exercise as a ruse and a stalling tactic that will likely allow Assad to keep a good chunk of his weapons no matter what and allow him to continue to kill thousand more of his own people, albeit with bullets and bombs rather than chemical weapons.
The one key lesson of all negotiations should have been exercised by Kerry: he should have walked away from the negotiation when the opposition failed to agree to our key demand. As soon as it was learned that the threat of force would not be in the resolution Kerry should have gone to the microphones and declared the negotiation “over.” But he simply couldn’t. His hand was too weak. And that is what happens when leaders fail to lead and inaction wins out over action.
I am afraid that history will judge this entire Syrian mess to be a low-point of American leadership—adding to the perception of a “weak America” and an even weaker super power. For what good does it do us to be a super power if we fail to use that power when the world—and the helpless—need it most?
—-Jeffrey A. Krames, September 14, 2013
In this morning’s New York Times, Russian President Vladimir Putin wrote an Op-Ed piece on the possible use of military force by the U.S. against Syria in the wake of their gassing of their own people. This article, entitled “A Plea for Caution from Russia,” is a clever piece of propaganda that would make Hitler’s “Reich Minister of Propaganda” Joseph Goebbels proud.
Putin does not deny that gas was used in the August 21 chemical attack, he just claims that the opposition did it, despite the fact that these forces have no access to such weapons of mass destruction, nor the delivery system that was used in the attack. If the opposition had such an arsenal, al-Assad would have been targeted years ago and would probably be dead. But here is Putin, flying in the face of what the rest of the world knows to be true. Here is how he puts it: “No one doubts that poison gas was used in Syria. But there is every reason to believe it was used not by the Syrian Army, but by opposition forces, to provoke intervention by their powerful foreign patrons, who would be siding with the fundamentalists. Reports that militants are preparing another attack — this time against Israel — cannot be ignored.”
Hypocrisy does not begin to describe the Russian leader. He remains “KGB down to his DNA.”
Putin also takes aim at the U.S. and president Obama, labeling them, in essence, the world’s new bully (this from a man that has waged brutal thuggish wars on numerous occasions without ever consulting the U.N., helps to arm Syria on a near-daily basis, and even beats and punishes his own LGBT population).
He also takes another swipe at Obama because in the President’s address to the nation on Tuesday, he [Obama], had the temerity to use the phrase “American exceptionalism” in describing the country he leads. Asserts Putin: “I carefully studied his address to the nation on Tuesday. And I would rather disagree with a case he made on American exceptionalism, stating that the United States’ policy is “what makes America different. It’s what makes us exceptional.” It is extremely dangerous to encourage people to see themselves as exceptional, whatever the motivation.”
From a personal perspective, I have had the good fortune to visit most every continent throughout the world, and while I have enjoyed so many of the countries I have visited, I have never found a country to be more exceptional than the United States. My father, a holocaust survivor that survives to this day, has always said that the most valuable lesson he can impart on his children is how “fortunate we are to live in a country like the United States.” I carry that lesson with me every day, and now pass it on to my own two small children.
Why makes America so exceptional? The answers are too numerous to detail them all here, but I will give it a shot. One can point to the freedom that America offers, but more than 150 countries throughout the world offer its people freedom. America is exceptional because this is a country in which people can come from “nothing,” and become “everything.” There are so many examples of this, a country in which one can get educated or create a better mousetrap in their garage and rise up to become a business or political or any kind of leader. One of my favorite examples of this, that he himself cited in a recent interview, is former Secretary of State Colin Powell. A black man from the 1950’s Bronx who could have become president but still rose to the highest levels of our military and government. And he is one of so many who rose themselves up by meager bootstraps to make a huge impact on this nation and the world at large.
When I met with management pioneer Peter Drucker in 2003, he reminded me that Europe—for much of the 20th century (especially the first half)–unlike America, still held to long-held rules of birth and social status to determine one’s status in society. It was America, Drucker asserted, that was first to loosen those shackles so that people born anywhere to anyone could be whatever their own talent and ambition took them. I have also lived that reality, albeit on a much smaller stage, coming from the Bronx and rising up, over many years, as an author, publisher and now literary agent helping new authors to realize their own dreams.
What else makes us so exceptional—and what has—over our history? I can think of a few things: Thomas Jefferson and the U.S. Constitution, Henry Ford and the invention of the automobile, Orville and Wilbur Wright and their invention, our freeing of Europe from Hitler [that started with a day of unbridled bravery on the D-Day landing in early June, 1944], and being the first country to land a man on the the moon, to start.
But it is also a seemingly unending list of so many great Americans in our storied history that have helped make America such a singular nation. Here are some: George Washington, Benjamin Franklin, Abraham Lincoln, Mark Twain, Susan B. Anthony, Dwight Eisenhower, Thomas Edison, Theodore Roosevelt, Alexander Graham Bell, Jackie Robinson, Martin Luther King, Franklin Delano Roosevelt, Eleanor Roosevelt, John F. Kennedy, Albert Einstein, Walt Disney, John Steinbeck, Ernest Hemingway, Frank Lloyd Wright, Jonas Salk, Bill Gates, and Steve Jobs, to name more than a few.
But, ultimately, it is the exceptionalism of the American spirit, our persistent and consistent values, our unbridled idealism—and our unwavering wish to want more for the next generation than our own—that makes us the exceptional Republic we have become.
In summing up, I have little doubt that Putin’s ham-handed attempt to sway the American people against using force against his close ally, the murderous thug Bashar al-Assad, will backfire. Putin is proof positive that one cannot change their stripes. He under-estimates both the American people and its current occupant of the Oval Office—although it was Obama’s inaction that got us into this political quagmire in the first place (inaction is often a leader’s greatest enemy, and it certainly was in this instance). When Putin fails to come up with an acceptable U.N. Resolution that includes the threat of force against al-Assad [if al-Assad does not give up his chemical weapons as promised], I believe there is a chance that Obama will finally go against his own DNA and use force against the Syrian regime. That will reveal Putin’s puny attempt to gain acclaim on the national stage as nothing but a stunt and a stalling tactic. And that is when Putin will eat the words that he has thrown in our face on this day, September 12, 2013.
—-Jeffrey A. Krames
“Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.”
—Justice Louis D. Brandeis
In the critical days before the Congress officially returns to work to weight the issue of military strikes against Syria, we have seen many more disturbing video images online and on television that prove beyond a reasonable doubt that the al-Assad regime had used sarin gas against his own people. These videos, taken on the scene in real time with cell phones and other “new” technologies, make a near-fortress like case that everything that America has asserted in regard to these attacks is true. However, whether or not that will make a difference to the Congress and the American public remains to be seen [for more on that read my previous posting here: http://jeffreykrames.com/2013/09/07/the-word-of-a-leader/].
While watching these heart-wrenching videos, I began to wonder what would have happened if such images existed in real time while Adolph Hitler waged his merciless war and subsequent genocide against the Jewish people. If so, would the world have allowed Hitler to get as far as he did? Would they have watched Hitler roll over the Polish army [so mis-matched atop horses fighting Hitler’s air force and armored Blitzkrieg divisions]?
First, a bit of history: Hitler lost a key election in 1932 by securing just under 37 percent of the vote. Paul von Hindenburg, an independent, crushed Hitler with 53 percent of the German electorate backing him. In the German “Weimar system,” the president had broad and sweeping powers, and Hindenburg made the most seriously flawed mistake of his presidency by elevating Adolph Hitler to the key post as Chancellor of Germany at the end of January, 1933. After Hindenburg died in office in 1934, Hitler consolidated his power as dictator of Germany by eliminating the office of the presidency and replacing it with the newly created post of “Führer und Reichskanzler” (“Leader and Reich Chancellor”).
But as early as 1933 Hitler began his war against Jews and other people within his own country. Here is how the New York Times reports it:
“Within months [of Hitler’s appointment in 1933], the first concentration camp was opened in the Bavarian town of Dachau. The first prisoners were political opponents of the regime. But it wasn’t long before other groups that the Nazis deemed undesirable were rounded up and sent away: in particular, Jews, homosexuals, and gypsies.”
The SS—Hitler’s elite paramilitary force—had long been terrorizing Germany’s Jews, beating them up and vandalizing their businesses. The Nazis believed that Germans, part of what they called the Aryan race, were racially superior to Jews. In 1935, their racist beliefs became official German policy with the passage of the Nuremberg laws, which stripped German Jews of citizenship and laid the groundwork for the horrors to follow.
On Nov. 9, 1938, the Nazis orchestrated a nationwide wave of attacks on Jewish businesses, homes, and synagogues. Almost 100 Jews were killed, and thousands were arrested and sent to concentration camps. The night became known as Kristallnacht—the night of broken glass.”
I must note that Bashar al-Assad is no Adolph Hitler. Al-Assad is the dictator of a brutal regime that used chemical weapons to kill many people—yes. But their goals were far different and the number of dead in Syria does not come close to the number of Hitler’s murders, and Syria is a poor country with a limited military that does not compare to a fighting force capability as strong as say, Iran, never mind the United States. In 1939 Germany had the world’s third most powerful military.
We all know of Hitler’s atrocities—and as the son of Holocaust survivors who had lost most everyone at the hand of Hitler’s armies—I could not help wonder what would have happened if the world was able to see what Hitler began in 1933 as it happened. Would France and England have permitted Hitler to take Czechoslovakia and annex Austria [in the so-labelled Anschluss] in 1938? Would the U.S. have intervened far earlier in the second World War?
We, of course, cannot answer these and many more pressing questions with certainty this many decades later. However, I think it is a very fair to assume that despite the many pockets of anti-semitism of the day that persisted inside and outside the borders of the United States and Europe, the world would not have allowed Hitler to go unchallenged. Even Czechoslovakia could have given Hitler a fight, as it possessed dozens of well-armored divisions in 1938, but laid down its arms without firing a single bullet. We know now that Hitler correctly assumed that no one would have the stomach to wage war against him until September of 1939 when he attacked Poland. His armies were not ready for war before then, and the world was war-weary still after World War I.
Now, as the world faces another brutal dictator [albeit with far less military power than the Nazi Germany of 1939], what happens in the upcoming days and weeks will be of historical significance for many reasons. One of the biggest challenges for the world—more specifically the United States— is that there are no good choices left. Because the world watched as al-Assad slaughtered 110,000 of his people with mostly conventional weapons, we now have bad guys on both sides of the conflict. Still, that does not mean that inaction will not come without a heavy price.
No matter what happens, we must never forget.
—-Jeffrey A. Krames, September 8, 2013
In the past week I have discussed the importance of leadership moments and showed how they play such an important role when push comes to shove. Push has come to shove for President Obama is in the weekend before his final and sweeping effort to secure the support of Congress to strike Syria in the wake of Syria’s use of chemical weapons against his own people.
Let’s pivot off that concept and discuss the importance of words. For more then three decades I have made my living by shaping words. As editor, publisher, author and literary agent, I have helped many hundreds of authors by shaping and massaging their words in order to turn something ordinary into something special.
Speaking of words, I have always kept mine because I always knew that stakes were too high to contemplate otherwise. I spent more than three-fifths of my life in the business world building up a “fortress-like,” sterling reputation. However, I always knew that if I violated my word, even once, I could tear down that reputation in an instant—something I made sure I never did. Over-promise and under-deliver and you will find yourself out of business very quickly. I work in a small and close-knit industry in which word spreads quickly. I knew I had to be true to the values that were instilled in me from childhood. One does not lie—and one does not make a promise that cannot be honored.
Of course, the word of a corporate leader does not compare to the word of a country and its leadership. It is now common knowledge that President Obama made an off-the-cuff remark in August of 2012 about a red line and chemical weapons in Syria. We know that the remark was not planned because it was never followed up: President Obama—we know now—never instructed any members of his cabinet to come up with a plan of action in the event that the Syrian leader violated that red line. His failure to plan is what boxed him into his current and messy situation.
President Obama knows better than anyone the power of words. It was his soaring rhetoric that got him into the White House in the first place. He is also keenly aware that he has now put his reputation on the line. And not only his—but the reputation of the Office of the President as well as the word of the nation. And not just for now, but for years to come. That is why the stakes in Syria are so high. The decision to go ahead with strikes against Assad is more important than war—it is about the reputation of the United States.
That is why I believe that Obama will work doggedly to get the American electorate and both Houses of Congress with him. But momentum has shifted against him in ugly fashion. The shadow of the badly-bungled war in Iraq is too long and wide which explains why little more than a third of Americans back his decision to wage a limited war in Iraq. However, Obama has always been a pragmatic leader who sees things how they are and not how he wishes them to be. He knows that in 1999 President Clinton initiated bombing strikes for months in Kosovo a full month before the House voted on the issue (but after the Senate voted yes to a non-binding authorization of the use of force 58 to 41). Obama also knows that he has almost no chance to win over the Republican- led House of Representatives. Momentum is crushing his efforts by the day. Minority Leader Nancy Pelosi has told him that it might take several weeks before the House is even ready to vote. Contrary to conventional wisdom, that is sweet music to the ears of the president.
That is because I believe that he now has a new plan of action.
He and his closest two members of his inner circle—Vice President Biden and Secretary of State John Kerry—will put on a full court press to win Senate approval. In the Senate, Obama has about a six-member lead in the weekend ahead of his all-important address to the country on Tuesday, September 10th, one day before the 12-year anniversary of the 2001 horrific attack. Still, the Senate could go either way.
So what happens now?
One of two things: if Obama wins Senate approval, I believe he will wait no longer—knowing that his failure to act one week earlier may have been the worst day of his presidency—and order the attacks to go forward. He will not wait for the House to vote. If he fails to win the Senate, then he will go it alone, knowing full well that he is risking his presidency and his legacy in doing so. I believe that Obama has already made his calculation. He will put the word of the nation above his own word and his own legacy. He will do so because he knows that the word of a nation is far too valuable to squander. He also believes deeply that the use of chemical weapons cannot go unpunished—even if much of the the country—and the world—is not with him.
I have had the good fortune to publish more than one book on former Secretary of State Colin Powell. He spoke of leadership as a lonely endeavor. Just how lonely is something that Obama is about to find out—the hard way.
—Jeffrey A. Krames, September 7, 2013
It is difficult to believe that less than 70 hours ago it seemed a sure thing that America would launch strategic missile strikes to weaken Syria’s al-Assad’s regime—the same one that crossed Obama’s red line by murdering more than 1,400 innocents with sarin gas.
Now, just after the U.S. Labor Day holiday, that moment seems like some long-ago lost reality. In earlier posts I have discussed the importance of leadership moments. It now seems, with 20/20 hindsight, that there were far too many moments missed by Obama to save the world from a Middle-Eastern crisis that deepens by the day. Especially since Iran and Russia are two major players determined to undermine the west—countries with leaders whose actions will only complicate and confuse the muddled morass that Syria has become in such a seemingly short time.
But that’s the point. Has it really been a short time? The short answer is “no.” The civil war that has raged in Syria did not start a week ago or a year ago or even two years ago. It began in the Spring of 2011, and it did not take all that long for certain American politicians to recognize the war for what it was: a cancerous, Middle-Eastern crisis that had the ability to light up the Middle East in some tinder-like- box regional war.
Now, in the early days of September 2013, the chances of that stark reality seem more possible than ever.
Let’s look back at what did not happen in the last 30 months to bring us to this leadership moment. Forget 2011, that was only the beginning and no one could imagine that Bashar al-Assad would become a modern- day, Hitler-like leader on the modern stage. After all, he enjoyed listening to musician Phil Collins and was described by one credible biographer [who met with him on numerous occasions] as a as a geek—a nerd-like leader—certainly not a harsh dictator that would use every weapon in his arsenal to kill and maim thousands of his own citizens.
But—by 2012— a new al-Assad had emerged, the real Bashar al-Assad. That is when two never-shy Republican leaders—Presidential contender John McCain and Senator Lindsey Graham—warned Obama and the world to the perils of Syria and al-Assad. They understood that the Syrian conflict was about far more than Syria—it was about Iran—the only Middle-Eastern nation that had the capability of becoming a nuclear country besides Israel. [The Iranian red line is a whole other story—one that now seems more likely to be dealt with by Israel when the time comes].
It was enough for McCain and Graham that Syria had 5,000 Hezbollah fighters backed and financed solely by Iran. They urged the American president to arm the Syrian Free Army. But to Obama—the anti-war president, it wasn’t that simple. There were simply too many factions—including al-qaeda—on the anti al-Assad side of the war. Better not to involve America in a messy and complicated civil war in the worst neighborhood on earth. In retrospect, especially when it seemed that al-Assad was losing, it is clear the United States missed its best chance to level the playing field and tip the balance against al-Assad and his Iranian proxy fighters. But that, too, is “Monday morning quarterbacking,”— after-the-fact analysis.
However, hindsight is not useless when it provides lessons for the future. By arming the right factions fighting against al-Assad, the U.S. could have tipped the scales against him. But the hands-off American leader stayed true to his doctrine and stayed out of it. Even in late 2012 or early 2013 the Syrian war was still not something that rose to the level of U.S. involvement, Obama argued. And that was Obama’s second Syrian miscalculation, but unfortunately, not his last. [it is interesting to note that it was another U.S. president that was always on guard against “miscalculation,” and that was the 35th president, John F. Kennedy. It was a number of correct calculations on his part during those 13 days that saved the world during the Cuban Missile Crisis].
Apparently it did not occur to President Obama that he might have miscalculated. That is, not until his own credibility, after al-Assad used his unthinkable chemical agents—and the credibility of the United States—became the new table stakes in this far-away civil war. Once Obama realized he under-estimated the significance of the Syrian war and the brutal dictator who led it, his first instincts were the right ones. Attack al-Assad as soon as possible—before the regime could prepare and hide key assets in such civilian populated places like hospitals and schools. Show him, Iran, Russia and the rest of the world that al-Assad’s actions would not stand. That was August 31st—when it was thought that at least some sort of limited war would be waged by Obama under the War Powers Act.
But then the other Obama—the anti war Obama— appeared, and mucked up the works in ways that might very well be studied for decades as the flinch that brought the Middle East to its knees. At this point, with so many players, countries and politics in the mix, only time will tell how all will play out on this increasingly dangerous chess board. But the signs are disconcerting at best, and terribly ominous at worst.
Russia has volunteered to send delegates to speak to the American Congress—an unprecedented act as far as I can tell. Iran remains eerily silent, secretly delighting at the inaction of the United States. If the U.S. won’t back up its own red line, they won’t attack us, reason the Iranian leadership. That may or may not be true, and if it is, surely Israel will act. But that is a topic for another day.
For now, the stakes are growing by the day as the American electorate sides with the anti-war Obama. Stay out of it, they argue. Who wants another Iraq? But they are fighting the wrong war at the wrong time, something the world did some 75 years ago, when many underestimated a different leader. to catastrophic results. Despite the two recent wars started by George W. Bush, America has had a history of entering wars reluctantly and too late. The most vivid example of that is World War II. Even though Hitler’s war had already rolled over most of Europe—it took the Japanese attack on Pearl Harbor in December of 1941 to get America to enter the war. [Hitler’s war against Jews was well known by that point, but it is lesser known that in the late 1930’s and early 1940’s, anti-semitic factions in the U.S. helped to give cover to Roosevelt to stay out of the European conflict].
I fear many outcomes of what appears to be a fairly contained conflict (if you do not take into account the two million refugees that have already exited Syria, nearly a third of its population—with half of that incredible number being children under an average age of 12). The range of thinking in the U.S. Congress on this topic is as fractured as I have ever seen it. Some want to see the details of a comprehensive and strategic plan to bring down a monstrous regime, while others do not want us to go in at all. Most congressional leaders are torn—somewhere in the middle. Even if Obama gets the vote to wage “war,” which I believe he will, it will be such a watered down version of the original document that he will be handcuffed in what he could actually do against Syria, leaving little room for contingency plans if some awful “what-if” scenario plays out in the region [and I believe it will].
And what if the 113th U.S. Congress does what it usually does? [hint: nothing].
What will Obama do then? And what will happen to the U.S. reputation on the world stage? More important, will the conflict in Syria spread to the rest of the Middle East? And how will Russia’s appearance in the Eastern Mediterranean with its state-of-the-art navy hardware play out against the U.S. presence already there? The outcomes are too many to ponder, and none of them are good. Which is what keeps me up at night, writing such verbose pieces about events in far-away lands. It used to be only the health and well-being of my loved ones that kept me up at night…that, and maybe the stock market. Now look at where we are.
However, It is where we might end up, however, that truly scares the living daylights out of me.
Please stay tuned for more in the days ahead.
—-Jeffrey A. Krames, September 3rd, 2013
Many believe that leadership is about grand and sweeping campaigns and they can be—take Winston Churchill’s magnificent performance during World War II. But more often leadership is about a series of moments and the decisions made during those all-important occasions when it seems all is at stake.
By the nature of the job, presidents of countries—especially the one that heads the world’s lone remaining superpower—get more of those moments than say, leaders of corporations or other organizations.
Obama had such a moment on Saturday, August 31st, in the early afternoon. And he went down without a fight.
It was at about 2 pm Washington time that Obama stunned the world with an abrupt about- face on his tactical policy against one of the world’s worst mass-murderers—instead leaving the decision in the hands of the most incompetent congress in America’s 237 years as a Constitutional Republic. [The 113th Congress—has been called the “do-less-than-nothing Congress” by more pundits and news organizations than one can count].
First a quick bit of history: for 30 months Bashar al-Assad—the dictator of Syria– has been slaughtering tens of thousands of his own people—in a civil war against an opposition made up of many factions. The Western world watched, waited, and did nothing, hoping that the whole thing would simply go away. Instead the situation deteriorated with each passing week as more Syrians—and more innocents—were murdered by al-Assad’s armies, a fighting force which dwarfed anything he faced from the opposition. Even when Obama’s closest advisors and political foes alike told him he needed to arm the opposition, he waved them off and did nothing.
Then on August 21st, 2013, al-Assad did the unthinkable: he used sarin and perhaps other chemicals to murder more than 1,400 innocents, with more than 420 of those being children. Jews around the globe were reminded of another leader and another time in which a different gas was used to produce similar results.
Now al-Assad finally got what he did not want: the world’s attention.
Now let’s turn back the clock a year to when President Obama–in another pivotal moment— made his bold declaration: when asked about his stance on Syria he said that the “game-changer would come when Syria would throw a whole bunch of chemical weapons” around Syria. That was what he called his own “red line,” his line in the sand. No one doubted him. Wait. I take that back. Evidence now shows that his greatest foes—including al-Assad—likely questioned the word of the young American leader. Some say Obama was talking only for himself and not the nation. But the leader of the free world has no such luxury. Anything he says in front of a camera or a journalist becomes the word of the country.
It should come as no surprise that Obama is one of the most reluctant war Presidents in history. It is a good thing that he is called the “anti-Bush,” ending wars instead of starting them. That was one of the primary attractions of the young Senator from the land of Lincoln. He had called Iraq a “dumb war” long before he became president, and as President promised to bring back our heroes from Iraq and Afghanistan. He seized the moment by making good on those promises, for better or worse.
But then the Syrian crisis occurred and Obama’s red line was obliterated. And with the world’s eyes upon him, including al-Assad’s, Obama had the worst moment of his five-year presidency—when he decided to “punt” when he needed to lead. The president appeared indecisive and his foreign policy looked muddled at best. That moment played out on the world stage in a far harsher manner than it did in the U.S. Here four out of five war-weary Americans said they want Obama to get Congressional approval before striking at al-Assad’s war-making tools, even if it involves a very limited campaign with no boots on the ground. But the War Powers Resolution of 1973 gives the President the power to strike at al-Assad’s regime just so long as the attack is less than 60 days in duration.
Across the world reaction— and judgment— was swift. “I think Obama has no desire to act,” said an Israeli statesmen following the press statement. “The Americans have lost the battle even before it started,” boasted the newly emboldened Syrian Deputy Prime Minister on a Pro-Syrian television station.” The next morning the key Syrian newspaper described Obama’s decision as a “historical American defeat.” One could only wonder what other leaders—like those in Iran and Russia and North Korea— thought of President Obama and the United States when the American President decided that he would allow members of Congress to complete their vacations and come back in ten days on September 9th. The urgency of now became the urgency of… whenever. And what did Obama do after the worst moment of his presidency? He went golfing with his Vice-President.
For those of us who have followed and admired the first African American president the optics of the day were truly devastating. This was a President who always had the ability to do the right thing at the right time. But on this day his own decision- making abilities failed him, giving al-Assad a huge gift. It was bad enough that Obama had telegraphed—even televised—every aspect of his entire meager war plan against the regime. No boots on the ground, no regime change, nothing to really fear. Just a few targeted missile attacks, Mr. al-Assad, and you can go on your merry way killing and maiming, just so long as you do not use gas or other weapons of mass- destruction to do it. Now the Syrian leader has at least ten days to move all of his stockpiles of chemicals and weapons and troops. And what if he feels emboldened to order larger scale chemical attacks? What can we do? Congress is on vacation. In other words, even if Congress eventually does authorize force, it will be far too little, far too late. At this juncture, only a very specific and vigorous strategic battle plan with achievable goals could do real harm to the Iranian-backed Syrian regime.
How do we know that Obama failed? By what measure do I make such a judgment? The one leader I have observed and written about most extensively is Jack Welch, the former Chairman and CEO of General Electric. In Welch’s proven “4E” leadership model, he held that the most important two “E’s” of a leader is “Edge” and “Execution.”
Edge is the ability to make the really tough yes/no decisions and avoid the maybes.
Execution is the ability to transform a leader’s vision into reality.
On the final day of August of 2013, President Obama had neither edge nor execution. He never got to “execution” because he lacked edge and went straight to “maybe,” the very worst signal to send to the world at that pivotal moment. As a result, the word and reputation of the United States —and the presidency—will suffer for years to come. As he himself said, it does not matter who occupies the office when a decision like this is made. The office itself suffers. And perhaps the worst thing about this entire affair is that there is no way to turn back the clock, nowhere to go to get our reputation back. And who can the Syrian people go to now, as al-Assad continues his war with impunity against his own people?
— Jeffrey A. Krames, September 1, 2013/September 2, 2013
The Limits of Charisma: The “Sequestration is Dumb” Edition (a.k.a How on God’s Green Earth Did we Get Here)?
Having written about some of the greatest leaders of the 20th century, I have always believed that charisma and leadership have little to do with each other. That idea is hardly new. It has been espoused most eloquently by the late, great Peter Drucker (the “Father of Modern Management”) when I met with him in 2003—as well as in several of his classic books.
Drucker also asserted that charisma, as defined by Merriam Webster as “a special magnetic charm or appeal,” could also be used as a construct to explain the evil influence of some of the worst leaders of the 20th century, like Stalin or Hitler. But, for the sake of this piece, we will use “charisma” to describe a positive leadership trait.
Before moving on, let’s get back to Drucker for a moment. To underscore the difference between leadership and charisma, he wrote: “Harry Truman had no more charisma than a dead mackerel,” but accomplished great feats of leadership and legislative victories nonetheless. In contrast, Drucker asserted, “John F. Kennedy was perhaps the most charismatic president of his day, but “few presidents got less done.” I take exception with that characterization, since Kennedy both inspired a generation, and saved the world from a potential nuclear exchange during the Cuban Missile Crisis.
Let’s fast forward more than five decades to today’s occupant of the Oval Office. In ways that were similar to JFK, Barack Obama has the gift of oration and charisma, two qualities that helped to get him elected twice. Obama is a gifted and intelligent president. His command of the bully pulpit typifies at least part of what makes a great leader, but only a part. For leaders of states and nations, there is no substitute for authentic leadership and effective legislating. Consider them as two sides of a coin. Opponents of Obama have labeled him the “campaigner in chief,” because whenever a difficult choice must be made by him and the congress, he takes his argument directly to the people, passing “go,” both houses of Congress, and the media in one fell swoop. But presidents must do much more than campaign.
The most effective leaders don’t just talk, they act. They articulate a path forward—a vision of the finish line—and get others to follow; this is true for people they don’t like or who hold different views than themselves…especially those that think differently from themselves. That was the best part of Lincoln—the President (as well as the movie). It is in this regard that Obama has consistently let us down, especially when it comes to the economy. Even though his common sense ideas are almost always more popular than any that emanate in Congress, he still comes up short when it comes to getting others in Congress to follow his lead. Recently Obama has reached out to members of congress by hosting a lunch and a dinner with key members of congress (but not the leaders of either house of congress).
Of course, John Boehner and the other House Republican’s obstructionists (e.g. think Tea Party zealots) have actually made congress less popular than cockroaches (I kid you not). Their responsibility in sinking the U.S. economy into the sequester quagmire is equal—and even greater—than President Obama’s. Most Americans blame Republicans for hurling us into this mess which according to the government, could easily spark the loss of 750,000 jobs just when the United States was getting on solid ground following the great recession of 2008/2009. One very recent Bloomberg headline summed it up as follows: Congress Budget Cuts Damage U.S. Economy Without Aiding Outlook
POISONING THE WELL
And in one way important way, Republicans spoiled the well in a way that Obama will never forget.
Several years back, on the floor of the Senate, Leader Mitch McConnell announced that his main priority was to “make sure that Obama never gets a second term.” That is unprecedented—and politics at its worst. One would think that creating legislation that leads to a stronger economy and the ending of two wars would rank higher than ridding the White House of its current occupant—or any sitting president for that matter. Think of it. What if one of your colleagues at work said the same thing to the entire company you work for—that getting you fired is his main priority. There is no way that would be tolerated by the leader of that organization. But the 2013 Republican party is both a leaderless and rudderless party. That did not happen overnight. They had to work at it to be so out of touch with the American mainstream.
I view Obama, who boasts a more definitive swagger after his second term win, as a determined prize fighter landing blow after blow on the entire Republican party. Don’t misunderstand me. He did not want this sequester to go into effect, but, as many pundits pointed out, he “miscalculated” by overplaying his hand. He thought that the Republicans would cave again because they could not tolerate the cuts to the Defense Department. Clearly he was wrong. And there are more “cliff-like” moments coming at the end of March and in the ensuing months that follow.
In the early days of March, no one knows what effect the Sequester will have on the economy and the financial markets. That’s because this is an unprecedented event for the U.S. (a self-inflicted $850 billion wound). People in far-away lands are incredulous—they can’t believe that the greatest country on Earth cannot get their fiscal house in order. In light of that, who knows what they will think of us if we are unable to come up with a new budget in the next few months. Stay tuned!!