Rex Tillerson arrived as Secretary of State in 2017 with deep experience in the oil politics of the Middle East and Russia and a successful 42 year career at Exxon Mobil. The hope was that the responsible adult would bring gravitas to the cabinet as well as understanding and personal relationships which could help in the post-Iraq, post-Syria, post-Ukraine world of American foreign policy. The generals could handle the military clean-up work; Tillerson would handle the soft side. What went wrong?
The complexity of foreign policy is reflected in the core membership of the President's National Security Council - the Vice President, the Secretary of State, the Secretary of Defense, the the Secretary of the Treasury, and the President's Assistant for National Security, advised by the Chairman of the Joint Chiefs of Staff and the Director of National Intelligence. The three dimensions of foreign policy - diplomatic, military, and economic - are all represented; each needs a champion who has the confidence of the President and a who can draw upon an experienced and motivated staff which prepares the briefing papers and implements the decisions. This assumes competent staff down several levels, and NSC members who are aligned with the president. Both requirements proved to be missing in the case of Rex Tillerson's State Department.
To be fair, the fixation about Russian meddling in the 2016 election has made it very difficult to engage with what Mitt Romney had rightly called our number one national security threat. Tillerson knew Putin, at least peripherally, understood the importance of energy in Russia's economy and foreign policy, and had direct experience dealing with Russian negotiators. Before the Democrats settled on the "Russia cost Hillary the election" meme and Mueller subpoened anyone who had ever talked to a Russian, there was a chance to sort out the interests of Russia and NATO in the former Soviet republics and to agree on a plan to stabilize the Muslim nations lying to Russia's south. Tillerson could have been central, but the Trump administration was denied the opportunity, and Tillerson's resume became less relevant.
Tillerson, Trump, and the Senate all deserve blame for the mis-management of the State Department. Trump has had an overall problem nominating people for positions requiring Senate approval, with no nominee yet proposed for one third of the 640 such positions. State, which is facing a 30% budget reduction, is at the forefront with no nominee yet recommended for 54 positions, 61 confirmed and 28 pending before the Senate. As happened to George W Bush, but not Obama, Clinton, or HW Bush, the Senate required resubmission of nominations after the end of the year - a sign that Mitch Mcconnell is as much of a problem as is Chuck Schumer. At State, a majority of the senior positions remain unfilled, and no ambassadors have been nominated for Saudi Arabia, Jordan, Turkey, Qatar, Yemen, or South Korea - all hot spots requiring expertise and personal contacts. If Tillerson has been complaining about White House interference, it has not made the media.
On broad policy, former Exxon CEO Tillerson would have agreed with the establishment, globalist wing of the Republican party in the Make America Great Again debate about free trade and the ability of American companies to prosper amid global competition. His experienced voice will be missed in the foreign trade debates which will follow the replacement of Gary Cohn by (choke) Larry Kudlow as President Trump's chief economic advisor, and the administration turns away from multinational agreements toward individual country negotiations. Down with the influence of the embassy staffs and the Foggy Bottom experts; up with their counterparts at the Commerce Department and the office of the Trade Representative.
The turn from Tillerson to Mike Pompeo - US Military Academy; Harvard Law; House Intelligence Committee; CIA Director - suggests closer alignment than with Tillerson for a hawkish approach to the remaining two members of George W Bush's "Axis of Evil" - North Korea and Iran. Each has a story, but Tillerson was apparently not in the loop with Mike Pence and Ivanka on North Korea, and would have cautioned against scrapping President Obama and John Kerry's Iran nuclear agreement which does not include inspection of Iranian military sites or cover missile development. The first may be an opportunity; the second a risk.
Tillerson left Exxon a little better than he found it when he became CEO in 2006 - up about 25%; he won't be able to say that about the State Department, but he will have his XOM stock to cushion the blow, unlike many others who have given up good careers to join the administration and found that they cound not navigate the Senate or the top CEO.
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This week's bonus video is for those who couldn't get enough of the curling competition at the recent Olympics.
bill bowen - 3/16/2018
DISRUPTION as a Political Strategy. As Amazon continues to disrupt (some would say destroy) much of America's retail (soon to be many) businesses, we see a new strategy of disruption spread to most market. The strategy seems to be to take advantage of the availability of large sums of Angel capital followed by even larger sums of public capital to develop pricing strategies with negative margins to gain market share at the expense of profit making businesses until economy of scale allow small margins to be achieved which in the end add up to enough total profit to make investors willing to bet that the future will bring larger margins. As such the stock value is driven higher and higher despite price to earnings rations in the hundreds. The rising prices allow more and more capital to be raised to continue, even accelerate the strategy and expand the target markets to disrupt. Ironically, this strategy is producing similar results to the overseas movement of US industry overseas to undercut the US producers in the days of our youth. Instead of empty factories and unemployed steel workers, today we see empty retail stores. Technology companies are taking aim at every segment of American business and using the internet, software and computer networks to attract the capital and launch their disruptive strategy. There are many wrinkles. So be it.
Americans are in shock as they experience this business place war. Truck drivers can see it coming with driverless trucks and robots to unload them. So can cashiers. Military pilots and foot soldiers as well. 2 or 3 more years and we will clearly see the effect of the internet of things advancing inside offices of most of us.
Enter "the Donald". He disrupts the political world. He has no rules. Not even polite behavior. He picks fights as an opening position in negotiations. He always seems to throw the first punch. He scares the "hell" out of most Americans as he takes on everything we have taken for granted since we won WWII for our friends and rebuilt their countries for them. For 70 years we have paid their defense bill at the expense of our infrastructure, our education system, our healthcare system and our drug treatment programs. Not only did we do all that, but we gave up our per family income as we tolerated our jobs going overseas, our balance of trade shift our dollars overseas to return as investments in US bonds and ownership of US companies. Our allies taxed our exports with unfair tariffs. We did all that under the watch of both parties. But, it was accelerated under President Obama. And, the result in the culmination of all this was the rise and election of President Trump. He is the political equivalent of the disruptor. He is in a hurry to get on with it. Lead, follow or get out of the way is a well known management saying. He personifies it. Not many of us like the disruption of our businesses. Now we have the political disruptor. If just a few of each political party stop defending the "old way" that gave us "stalemate" and join him then things will get done and problems will get solved. Stopping him is not going to be as easy as it is to filibuster your way to stalemate. Why is anyone surprised this came about?
Posted by: Bill McCormick | March 21, 2018 at 03:20 PM