Society + Culture,

Mark Engler on the War Woes of Business

By MWC Editor At Large Tom Engelhardt

The Bush administration, with its crony corporations in two, essentially sallied forth into the world with the collective mentality of a plunderer, ready to strip mine the planet. While its plans for global -- and energy -- domination (as well as the military conquest of space) have been aimed at forever, its business plans seemed more focused on tomorrow and the day after. For a while, it looked as if the President and his friends might even make back to Crawford for a life of Mai Tais and brush-cutting without the economic chickens coming home to roost. This now looks less likely.

Mark Engler takes up a distinctly under-attended subject -- just how bad for business (at least as measured by the post-Cold War presidencies of Bush the Elder and Bill Clinton) this administration might prove to be. He also explores the question of whether significant sectors of the business community will turn on the administration's war in Iraq and allied policies. Though largely forgotten, it happened once before -- in the Vietnam era. Tom

Bush's Bad Business Empire
Making the World Unsafe for Microsoft and Mickey Mouse
By Mark Engler

The Bush administration has a reputation for creating an unusually business-friendly White House. Put Dick Cheney's secretive Energy Task Force and massive tax cuts together with corporate lobbyists writing regulations for their own industries, and you've made an argument that seems pretty persuasive.

There are reasons, however, to consider a contrary notion: Maybe George Bush and Dick Cheney aren't very good capitalists at all.

George W. Bush's history as a failed businessman is well known. Dick Cheney, portrayed by conservatives as a brilliant ex-CEO and by progressives as a Halliburton shill, also has a suspect past. While he certainly increased Halliburton's profile in four-and-a-half years as its chief, his foremost accomplishment was the $7.7 billion acquisition in 1998 of Dresser Industries, a rival that turned out to be plagued with staggering asbestos-related liabilities. In the wake of Cheney's reign, multiple Halliburton divisions sought bankruptcy protection and the company's stock price plunged. Rolling Stone magazine reported in August 2004, "Even with the bounce Halliburton stock has received from the war, an investor who put $100,000 into the company just before Cheney became vice president would have less than $60,000 today."

Many analysts hold the Vice President accountable for the downturn, arguing that Dresser's asbestos problems, which cost Halliburton billions, were predictable. Less harsh critics nonetheless question his success as a business leader. For instance, Jason E. Putman, an energy analyst at Victory Capital Management, argues that, as Halliburton chief, "[o]verall, Cheney did maybe at best an average job." Newsweek's Wall Street editor, Allan Sloan, is less complimentary, suggesting Cheney was a "CEO who messed up big-time."

When it comes to Iraq, we hear a lot about the government largesse flowing toward Halliburton, Bechtel, and a handful of other favored firms. Less often do we consider the possibility that the administration's "war on terrorism" has been a major business blunder. If you start, though, with the lackluster corporate records of Bush and Cheney, the administration's foreign policy comes into quite a different focus. Even if you believe that the White House is designing its overseas crusade to benefit U.S. corporations, there's no reason to assume that it has been doing so successfully.

Increasingly, the business press is suggesting that corporate leaders, who once hoped the current administration would push the corporate globalization of the Clinton years to new heights, now fear another fate from the international order Bush has created. Tax cuts and deregulation on the domestic front have been obvious bonuses, but otherwise many U.S. multinationals face a troubling scene. The White House's failed CEOs have pursued a global agenda that, at best, benefits a narrow slice of the American business community and leaves the rest exposed to a world of popular resentment and economic uncertainty.

When it comes to the interventions of Bush, Cheney, Condi, and the neocons in the global economy, "at best an average job" might be a charitable judgment, and "messed up big-time" could be closer to reality. Those business people who have yet to join the majority that opposes the president's handling of his war in Iraq -- or the increasing chorus of conservative critics who have begun questioning the administration's foreign policy -- may soon have a long list of reasons to get on the bandwagon, starting with the bottom line.

Not KFC's War

In recent years, KFC has had some trying moments in the Muslim world. In early September, a bomb exploded inside one of the company's fried-chicken outlets in Karachi, Pakistan. It was not the first time the chain had been targeted. In May, a Shia mob, angered by U.S. backing for President Pervez Musharraf and by reported abuses at Guantánamo Bay, set fire to another KFC outlet -- one decked out with large images of Colonel Sanders set atop fields of stars and stripes. Two other branches were destroyed shortly after the U.S. attack on Afghanistan in 2001.

The woes affecting KFC go well beyond one fast-food chain -- McDonald's, too, has been attacked in Pakistan and Indonesia -- and the torching of fast-food outlets is only the most dramatic sign of the new business climate being fostered by a changing American foreign policy. If Clinton's diplomatic affairs could be described as a sustained effort to make the world safe for Mickey Mouse, Microsoft, and popcorn chicken, the Bush/Cheney agenda represents something altogether more dangerous for business.

The Clinton administration served as a steady advocate for building a cooperative, "rules-based" international economy -- a multilateral order known to critics as "corporate globalization." The Bush administration, while purporting to be interested in issues like "free trade," has offered up a very different set of policies. Aggressive and unilateralist, it has fashioned a new model of "imperial globalization" which has even put multilateral institutions like the World Trade Organization, decried by globalization activists, in jeopardy. Rather than working through such bodies, the current administration has regularly shown intransigence in international negotiations around trade and development; it has focused on tying its aid for other countries directly to its militarist prerogatives; and it has tried to deny war-weary "Old Europe" its traditional role as a junior partner in the globalization endeavor. In the process, it has begun dismantling an international order that served multinational corporations very well in the booming 1990s, and facilitated their rise over the past 30 years.

In short: If Bush is an oil president, he's not a Disney president, nor a Coca-Cola one. If Cheney is working diligently to help Halliburton rebound, the war he helped lead hasn't worked out nearly so well for Starbucks.

A Bungled-Brand America

Whether the administration's bold gamble for U.S. global dominance will prove profitable either in the near future or in the long run, the business costs of this approach are already becoming evident. For starters, the new wave of anti-Americanism sweeping the planet goes far beyond KFC bombings in South Asia or widespread hostility in the Middle East. In Asia, the South China Morning Post has noted that a "strong, growing hostility" toward the United States has complicated Disney's expansion plans in the area. The Bush imperial foreign policy, moreover, is inspiring consumer backlash even among traditional allies.

In December 2004, Jim Lobe of Inter Press Service reported on a survey of 8,000 international consumers released by the Seattle-based Global Market Insite (GMI) Inc. The survey noted that

"one-third of all consumers in Canada, China, France, Germany, Japan, Russia, and the United Kingdom said that U.S. foreign policy, particularly the ‘war on terror' and the occupation of Iraq, constituted their strongest impression of the United States... 'Unfortunately, current American foreign policy is viewed by international consumers as a significant negative, when it used to be a positive,' comments Dr. Mitchell Eggers, GMI's chief operating officer and chief pollster."

Brands the survey identified as particularly at risk at the time included Marlboro cigarettes, America Online (AOL), McDonald's, American Airlines, Exxon-Mobil, Chevron Texaco, United Airlines, Budweiser, Chrysler, Barbie Doll, Starbucks, and General Motors.