Sunday :: Jan 15, 2006

Why CEOs Should Never Wage War


by pessimist

It is only one who is thoroughly acquainted with the evils of war that can thoroughly understand the profitable way of carrying it on.

So said Sun-Tzu in The Art of War, chapter II-7. This may be one reason America regularly selects victorious ranking military officers to be President: George Washington, Andrew Jackson, Willian Henry Harrison, US Grant, Teddy Roosevelt, Dwight Eisenhower.

If not the top man, mid-level officers with wartime combat experience would be selected: Rutherford Hayes, James Garfield, Chester Arthur, Benjamin Harrison William McKinley, Harry Truman, John Kennedy, George Bush.

Those who served but didn't see combat, however, don't fare well as President for some reason: Lyndon Johnson / Richard Nixon (Vietnam), Jimmy Carter.

Considering the above, are we surprised that Bu$hCo - whose only members with any military experience were THE Donald Rumsfeld and Colin Powell - aren't doing so well with their Crude Cru$ade?

If wars were run like shareholding businesses, the shareholders would be ousting the Board of Dictators - er, directors for, at the very least, misfeasance - i.e. for negligently and improperly performing the obligation.

The evidence is fairly clear that Bu$hCo is in over its head.

In their first venture, Petroleum Pieline Pathways of Afghanistan, after almost five years (yes, it has sadly been that long!), there is still no progress on the construction of that project. The local project leader, ex-UNOCAL exec Hamid Karzai, has been attempting to approach local leaders to back the project - without success - after a hostile takeover also failed to yield profitable results. In fact, there are reports that a counter-takeover may well be in the works. The coming proxy fight should enliven discussions in the Oval Office!

Bu$hCo's partnership with Mushareff Enterprises is suffering some strains as well, as a recent effort to eliminate a competitor seems to have not achieved the desired result. Relations between the partners are reported to be strained as executives of both partners meet to discuss the poor performance of field operatives.

In yet another disappointment to Bu$hCo shareholders, the leveraged buyoff of the Iraqi petroleum industry is still incomplete almost three years after announcing a successful conclusion. Local conditions are quite unsettled, and the recent demise of an important local official isn't helping any.

In addition, a legal action taken against a former director of the Iraqi petroleum industry has run into difficulties as the lead jurist trying the case has resigned after declaring he was considering such a step for a while.

With local election results considered untrustworthy, and with a new scandal developing, local citizens are expressing unhappiness over the increasing costs of vital commodities.

Economically, this leveraged buyoff has now cost shareholders $1 TRILLION dollars - an amount which is beginning to cause unrest among those financing the venture.

Said one observer:

"If Bush had come to the American people with a request to spend several hundred billion dollars and several thousand American lives in order to bring democracy to Iraq, he would have been laughed out of court," said noted political scientist Francis Fukuyama

It turns out the eventual cost of the war in Iraq will not be several hundred billion, but according to a new study at least a thousand billion dollars - US$1 trillion, in other words. This figure dwarfs any previous estimate by orders of magnitude. Given the projected cost of $1 trillion to $2 trillion, one might imagine that American taxpayers are now rolling on the floor in hysterical laughter while gasping for air.

Efforts to bring about a successful conclusion to this long-running buyoff have met with opposition, a condition confirmed by a Bu$hCo employee:

Lt. Gen. John Vines, the No. 2 American commander in Iraq, told Pentagon reporters by teleconference from Baghdad on Friday that "the indicators are that it was due to hostile fire." Reuters cited witnesses in Mosul who said men armed with heavy machine guns had opened fire on the helicopters, causing one to crash.

Ever seeking new opportunities, Bu$hCo is expanding its operations and expresses interest in energy generation facilities. In this expensive venture, Bu$hCo has formed a partnership with British Blair in seeking a controling interest in the facility at Natanz, a move which is meeting with opposition from Iran Power and Light. Observers are giving the advantage to Iran Power as the Bu$hCo/Blair bid isn't seen as affecting ongoing operations. This situation is expected to become more contentious with time as a third party appears to be interested in Natanz.

The consequences of this confrontation could be catestrophic for Iran Power:

"In fact," said Hari Vasudevan, professor of international relations at Calcutta University, "Iran enjoys a unique strategic advantage because of the highly troubled situation in Iraq, which the US has failed to quell." He added: "Sixty percent of Iraq's population is Shi'ite, and Iran wields enormous influence in Iraq. It has so far desisted from fomenting further trouble in Iraq, but could do so if cornered and provoked by the US and its allies."

"All this might only frustrate US efforts to diplomatically isolate Iran," said Qamar Agha, a Middle East expert at the Center for West and Central Asian Studies at the Jamia Millia Islamia university in New Delhi. "Western Europe is far too dependent upon Iran's oil and gas to go to extreme lengths in sustaining sanctions that cripple Iran's energy generation. Therefore, the US might be tempted to use military force, jointly with Israel, to bomb select facilities in Iran."

A former Indian intelligence officer, Vikram Sood, said that such an attack might use nuclear weapons. "A conventional attack on Iran would be expensive and not quite cost-effective. It would allow [for] Iranian retaliation." To preempt retaliation, the US might use tactical nuclear weapons against Iran's underground facilities. The fear also is that unlike in the case of Iraq when considerable time was spent in building the case, this time the attack will be sudden and actual justifications will be given later."

So - are you ready to invest YOUR retirement nest egg in Bu$hCo?

What about investing your children?


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