Why Libya Right Now Is a Dow at 6,500 Type Moment for the American Foreign Policy Establishment

 

Every once in a while a pitch comes along that looks like the sweetest, juiciest, fattest pitch you are ever going to see. That is what you wait for. — Warren Buffett

In watching the US pensiveness and inaction regarding Libya, I couldn’t help but think of the above Warren Buffet quote. Here we have a moment that is absolutely perfect for US intervention, the fattest pitch US policy makers could have ever hoped to receive, an opportunity to put the failures of Iraq and Afghanistan on the backburner for a while and both do good by ending mass civilian killings and also helping secure oil supplies. Yet we can’t swing. We simply don’t have the capital and wherewithal to do so.

As Warren Buffet and other value investors well understand, you don’t always need to act. In fact it is better be patient and wait until the moments when the course of events throws up an opportunity where the reward is maximal and the risk is minimal. If you act before those moments then you run the risk that when those moments arrive you are not ready. Many of us experienced what that feels like in the spring of 2009. We knew that markets were at a low and it was a great time to buy but we just didn’t have the capital to do so having wasted it on moments where the risk/reward was less obviously skewed.

Libya right now is in many ways a Dow at 6,500 type moment. The rewards for acting far outweigh the risks. However, like many investors in 2009 our capital and attention is too tied up in disastrous investments in this case Iraq and Afghanistan for us to make a move.

So what are the rewards exactly? Well for one, we could get oil flowing again. Libya is the largest oil producer in Africa and the troubles there have caused oil prices to spike above $100. Killing this oil price rise would be worth hundreds of billions of dollars to our domestic economy. Furthermore, we can show the world that our military is still capable of doing good. The Libyans unequivocally want Gaddafi out. He is killing civilians and destabilizing the region so his neighbors want him out as well. America would win this PR battle very easily and see its international reputation which has been battered by the wars in Afghanistan and Iraq rise as a result.

So what are the risks then? Well the obvious risk is the loss in military life and the potential of a protracted expensive conflict. However, a quick glance at the facts would reveal that to be unlikely. First of all, Libya is a very small nation population wise – 6 million versus the 35 million in Iraq. Secondly, the part that is supporting Gaddafi is an even smaller fraction of that 6 million and is centered entirely in Tripoli. If we secure Tripoli, we secure the nation. This likely would not take very long as those soldiers who still are loyal to Gaddafi would immediately become unloyal the second America showed up. Their loyalty to Gaddafi runs no deeper than the money he gives them.

At the moment though, no such military action looks to be forthcoming. America like myself and others in spring of 2009 is passing up on an opportunity to make a move at just the most opportune moment. …

The Man Who Would Be King (If Obama Lets Him)

It has been said that without George W. Bush, Obama would not have been president. There is some truth to that. Had the Bush presidency not gone up in such spectacular flames and had the mood of the country not been so dire it is hard to imagine that Americans would have gravitated the way they did to the message of a young, single term African American Senator.

 A good portion of Obama’s appeal was that he was in many ways the opposite of Bush. Where as Bush was relatively short, Obama was relatively tall. Bush had a father, a famous one, Obama only met his twice. Bush went to schools that had scholarships named after his family, Obama was the one getting those scholarships. Bush had trouble speaking, Obama could always speak.  And then there is the obvious racial difference which underscored the entire campaign.

Democrats were smart in 2008. They knew that the country didn’t just want someone who was the political opposite of Bush but someone who was the opposite in every single way. They had learned from their mistake in 2004 in running John Kerry who was politically opposite from Bush but in every other way cut from the same patrician cloth.

American politics has always been like this. We tend to elect president’s who are not only political opposites of their predecessors but also the opposites in terms of personality and character. It is almost as if Presidents are not so much self-made as they are children begat by the previous President leaving office.

 Do you think a nice, well meaning naïve peanut farmer would have ever been elected President if Americans were not reeling from the Nixon Years and were yearning for someone who was distinctly outside the beltway? Nixon gave birth to Carter. After a few years of the nice but weak, slightly depressing Carter, we were ready for someone who could start carrying the country confidently again. Carter in turn begot Reagan. And so on.

The guys who are able to defeat the incumbent president or party do so because they represent not only an ideological turn but a turn in personality and character. Youthful, dynamic Clinton over stogy Bush I. Religious and moral Bush II over the too slick for his own good Clinton. I know Bush technically ran against Gore but he was really running against Clinton just as Obama was really running against Bush and not McCain.

Now, what does this mean for the 2012 cycle? It means that the Republicans if they are smart will find someone who is in every way the opposite of Obama. Being the incumbent, Obama will have all sorts of advantages going into the election. If they run someone who doesn’t represent a complete break from Obama, both in his or her approach to governing and his or her personality then Americans will go with what they know. Can we go through a process of elimination find the perfect candidate for this 2012 election cycle?

Obama’s experience is limited so the Republicans will need someone who has lots of government and private sector experience –eliminate Sarah Palin.

Obama is young, boyish so the Republicans will need someone who is older, more adult like –eliminate Tim Pawlenty, Bobby Jindal.

Obama is very telegenic and charismatic so the Republicans will need someone who seems more plainspoken and down to earth – eliminate Mitt Romney.

Obama is too over exposed and the media is too saturated with him so the Republicans will need someone who is relatively unknown and not trying to constantly grab face time – eliminate Mike Huckabee and eliminate Sarah Palin again.

So who are we left with after this process of elimination? Who is the anti-Obama? The answer is….

This guy…Mitch Daniels, the Governor of Indiana.

You’ve probably  never heard of him. Let me just give you a quick summary. Mitch Daniels is a short, quiet, not particularly charismatic, plain spoken down to earth Midwesterner who has loads of government and private sector experience and more than anyone else fully grasps the fiscal issues this country is faced with. Hearing him speak reminds you that adults still do exist in this country. He is already building some support and momentum going into this cycle. It still is unclear if he will run or not but a lot of smart people within the party would like him to.

More on Daniels at a later point. …