Posted on 29-9-2002

Business Con-fidence
By Frank Rich

You had to sympathize with Democrat Tom Daschle when he erupted on the
floor of the Senate this week. After months of playing Clark Kent to George
W. Bush's Superman, the guy looked unhinged. Mr. Daschle's real frustration
is his inability to change the subject of the national conversation. As the
election nears, the Democrats want to talk about the economy, and every
time they try, Mr. Bush drowns it out with "Iraq," a word so overpowering
it can make grown Americans forget that their pensions are in the toilet.

What Mr. Daschle and the rest of his incoherent party have failed to
articulate (along with so much else) is that this presidency is all of one
consistent piece, whether it is managing our money or managing a war. Now,
as pre-9/11, it reflects the C.E.O. ethos of the 1990's bubble at least as
abundantly as the previous administration did the promiscuous 1960's. Two
weeks before his inauguration, Mr. Bush invited Jack Welch, Ken Lay and a
bevy of C.E.O.'s down to Texas, and he has always run the White House by
the cardinal rules in their playbook. A chief executive can do no wrong.
The directors (for which read Republicans in Congress) and outside
directors (that would be the Democrats) are expected to give him a blank
check and question nothing, including the accounting, while the grateful
shareholders (the benighted voters) watch their portfolios bulge.

Now that we know that this model was a sham, with even Mr. Welch's General
Electric under scrutiny for fiscal sleight of hand, you would think the
Bush administration might revisit it. But instead it is following a
discredited modus operandi more slavishly than ever, even as it prepares to
fight a new war. "There is a fine line between arrogance and
self-confidence," said Mr. Welch in "Jack: Straight From the Gut," his
Bushian-titled memoir. "Arrogance is a killer." Mr. Bush and the C.E.O.'s
around him seem as oblivious to this maxim as the C.E.O. who coined it.

The "fuzzy math" of this White House's tax cut and budget projections,
chronicled by my colleague Paul Krugman from the start, is compounded daily
rather than corrected. When we poor shareholders worry too loudly about our
growing economic pain, the administration's antidote to our woes is not
more honesty in bookkeeping but Ken Lay-style cheerleading. This month Mr.
Bush's S.E.C. chief, Harvey Pitt, went so far as to tell Americans it is
"more than safe" to get back in the market — as the Dow plummeted for its
sixth consecutive month. It's the same pitch Mr. Lay offered his employees
in an e-mail — "I want to assure you that I have never felt better about
the prospects for the company" — on the day Jeffrey Skilling resigned as
chief executive in anticipation of Enron's collapse.

But this administration no longer cooks the books merely on fiscal matters.
Disinformation has become ubiquitous, even in the government's allegedly
empirical scientific data on public health. The annual federal report on
air pollution trends published this month simply eliminated its usual (and
no doubt troubling) section on global warming, much as accountants at
Andersen might have cleaned up a balance sheet by hiding an unprofitable
division. At the Department of Health and Human Services, The Washington
Post reported last week, expert committees are being "retired" before they
can present data that might contradict the president's views on medical
matters — much as naysaying Wall Street analysts were sidelined in favor of
boosters who could be counted on to flog dogs like WorldCom or Pets.com
right until they imploded.

It's when such dishonesty extends to the war on terrorism, though, that you
appreciate just how much a killer arrogance can be. Even with little White
House cooperation in its inquiry, this month's Congressional intelligence
hearings presented a chilling portrait of the administration's efforts to
cover up its pre-9/11 lassitude about terrorist threats. Exhibit A was
Condoleezza Rice's pronouncement from last May: "I don't think anybody
could have predicted that these people would take an airplane and slam it
into the World Trade Center . . . that they would try to use an airplane as
a missile, a hijacked airplane as a missile." In fact, the committee
reported, U.S. intelligence had picked up a dozen plots of a similar sort,
over a period from 1994 to pre-9/11 2001, with some of them specifically
mentioning the World Trade Center and the White House as potential targets.
In the weeks before the attack the C.I.A. learned that in Afghanistan
"everyone is talking about an impending attack."

The past cannot be undone, and the intelligence committee found no smoking
gun to suggest that the administration could have prevented the horror. But
as we ready our own attack on Saddam Hussein, that's not the issue. What we
need to know now is if any of these catastrophic failings in preparedness
have been corrected in the year-plus since. The Congressional report says
that Al Qaeda learns from its mistakes, flexibly adjusting its organization
and plans. Do we?

While the administration says yes, the factual backup is again fuzzy.
Certainly it's hard to be reassured by anything said or done by John
Ashcroft, who in May 2001 testified to the Senate that "our No. 1 goal is
the prevention of terrorist acts." We now know that he was just putting us
on. On Sept. 10, 2001, he refused a F.B.I. budget request to add 149 field
agents, 200 analysts and 54 translators to its counterterrorism effort. He
did so despite the fact, unearthed by Congressional investigators, that the
F.B.I. then had only one analyst monitoring Al Qaeda.

The attorney general drives liberals crazy with his assaults on civil
liberties, but we do have courts to sort that out (as they are already
doing). What's truly frightening about Mr. Ashcroft is his incompetence.
Even as we learned this week that the Justice Department's prosecutors are
so sloppy that they mistakenly turned over 48 classified F.B.I. reports to
Zacarias Moussaoui, Seymour Hersh reported in The New Yorker that the
attorney general may have blown our chance to get useful Qaeda information
out of Mr. Moussaoui by mismanaging his prosecution.

Nor is there any evidence that our intelligence operations have been
repaired over the past year. Coordination between the F.B.I. and the C.I.A.
remains so spotty that as of the 9/11 anniversary Congress still had not
received an updated, cross-agency accounting of Iraq's nuclear, chemical
and biological arms capabilities. The administration's conflicting accounts
of Saddam Hussein's nuclear prowess and his alleged links to Al Qaeda
change by the day. "The dots are there for all to connect," said Donald
Rumsfeld last week; this week Ms. Rice's spokeswoman said: "Have we
connected those dots? No."

Is our information about other, possibly even graver terrorist threats just
as slipshod? Like it or not, we have a new, pre-emptive defense policy
built on the principle that we strike the bad guys before they hit us. But
how can it be executed if our intelligence is too inconsistent to determine
which bad guys are first on the horizon? As Hezbollah militants mobilize in
Lebanon and non-fuzzy math suggests that more Qaeda operatives are in Iran
than Iraq, we have chosen a first-strike target, however thuggish, that may
be tangential to the stateless, itinerant Islamic terrorism of the youthful
Mohamed Atta generation.

But there's no point in debating that now. We are already on our way to
Baghdad. It's our C.E.O.'s choice as the most profitable target for the
next fiscal year, and we are assured that it will go better than some other
C.E.O. pet projects, like Dick Cheney's "win-win" Halliburton -Dresser
merger. What's more, it is cost free: the chief White House economic
adviser, Lawrence Lindsey, said it won't even dent that fine economy the
president keeps telling us he is so optimistic about. Maybe there will be
some price in blood, but the battle plans leaked daily from the Pentagon
never seem to offer any casualty projections, reassuringly enough.

Mr. Daschle and his fellow outside directors, meanwhile, have their own
politically profitable business plan, to be executed as soon as they sign
off on the war resolution. They will be all too happy to let Al Gore worry
about Iraq in San Francisco, or wherever he is, while they whip up
election-eve fears about something truly scary, like Social Security