http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2005/12/04/ING00G0OG61.
DTL
Has 'War' become a leading brand for United States?
How Bush's imperial policies are being linked to economic woes and CEO
angst in America
Mark Engler
Sunday, December 4, 2005
We hear a lot about the government largesse flowing toward Halliburton,
Bechtel and a handful of other favored firms chosen to rebuild Iraq.
Less often do we consider the possibility that the administration's
bellicosity has been a major business blunder.
Breaking with the Clinton administration's advocacy for a cooperative,
rules-based international economy -- a multilateral order known to
critics as corporate globalization -- the Bush administration has
fashioned a new model of imperial globalization, aggressive and
unilateralist. This agenda, 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.
If Bush is an oil president, he's not a Disney president, nor a
Coca-Cola one. If Vice President Dick Cheney is working diligently to
help Halliburton rebound, the war he helped lead hasn't worked out
nearly so well for Starbucks.
A year ago, Jim Lobe of Inter Press Service reported on a survey of
8,000 international consumers released by Global Market Institute Inc.
of Seattle. 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," said Mitchell Eggers, Global Market's chief operating officer
and chief pollster.
Brands the survey identified as particularly at risk included Marlboro,
America Online, McDonald's, American Airlines, Exxon Mobil, Chevron,
United Airlines, Budweiser, Chrysler, Mattel, Starbucks and General
Motors.
In past months, a litany of stories in the financial press featured
unnerving questions for business. Typical were the Financial Times in
August ("World Turning Its Back on Brand America") and Forbes in
September ("Is Brand America In Trouble?").
A U.S. Banker magazine article in August relaying the results of an
Edelman Trust Barometer survey found that 41 percent of Canadian opinion
leaders were less likely to purchase American products because of Bush
administration policies, compared with 56 percent in the United Kingdom,
61 percent in France, 49 percent in Germany and 42 percent in Brazil.
It's not just snooty foreigners who are negative, either. American
business leaders have been starting to link economic woes to imperial
policy. The U.S. Banker article warned, the "majority of American CEOs,
whose firms employ 8 million overseas, are now acknowledging that
anti-American sentiment is a problem."
Regularly featured in stories about U.S. image problems is a group of
corporate executives who have come together as Business for Diplomatic
Action. While avoiding an explicit stance on the Iraq war, the group
argues: "The costs associated with rising anti-American sentiment are
exponential. From security and economic costs to an erosion in our
ability to engender trust around the world and recruit the best and
brightest, the U.S. stands to lose its competitive edge if steps are not
made toward reversing the negativity associated with America."
Compared with the adverse impacts of Bush's imperial globalization, the
administration's efforts at Karen Hughes-style brand rehabilitation are
laughable, and Business for Diplomatic Action knows it. Taking
diplomatic matters into their own hands, spokesmen for the group flatly
state, "Right now, the U.S. government is not a credible messenger."
Is the problem just one of perception, or have the wages of war cut into
business profits?
In June 2004, USA Today reporter James Cox wrote about how financially
ailing companies are pointing to the war as the culprit: "Hundreds of
companies blame the Iraq war for poor financial results in 2003, many
warning that continued U.S. military involvement there could harm this
year's performance. In recent regulatory filings at the Securities and
Exchange Commission, airlines, home builders, broadcasters, mortgage
providers, mutual funds and others directly blame the war for lower
revenues and profits last year."
Among those complaining was Hewlett-Packard, which claimed that the
occupation of Iraq has created uncertainty and hurt its stock price.
While fingering the war might just be a convenient excuse for some
underperforming executives, the level of grumbling is noteworthy, as are
the comments of outspoken fund managers profiled by Cox. "The war in
Iraq created a quagmire for corporations," David Galvan, a portfolio
manager for Wayne Hummer Income Fund, says in his letter to
shareholders. Vintage Mutual Funds concludes that "the price of these
commitments (in Iraq and Afghanistan) may be more than the American
public had expected or is willing to tolerate."
In an SEC filing, Domenic Colasacco, manager of the Boston Balanced
Fund, calls the U.S. occupation "sad and increasingly risky."
Of course, we know that companies reconstructing Iraq are posting
profits. Sales of gas masks and armored Humvees are also up. But such
war-supported companies are a small minority.
On the other hand, the diverse businesses in the tourism industry have
taken a huge blow. JetBlue, Orbitz, Priceline.com, Morton's steakhouses
and Host Marriott, to name just a few, have blamed disappointing returns
on the war.
Travel industry leaders have warned that the United States is losing
billions of dollars as international tourists are deterred from visiting
because of a tarnished image overseas and bureaucratic visa policies.
"It's an economic imperative to address these problems," said Roger Dow,
chief executive of the Travel Industry Association of America, tourism's
main trade body. He stressed that tourism contributes to a positive
perception of the United States. "If we don't address these issues in
tourism, the long-term impact for American brands Coca-Cola, General
Motors, McDonald's could be very damaging."
The potential costs of war also include the possibility that spreading
guerrilla warfare and terrorism will include escalating sabotage against
vast and largely indefensible stretches of oil pipeline in the Middle
East.
Then there's domestic spending. Whether fiscal conservatives are right
that deficits bloated by the Iraq war and tax cuts are necessarily bad
for business, or whether Military Keynesianism has actually been helping
to soften a periodic economic downturn, the idea of war without
sacrifice seems suspect in the long term. Take direct war costs running
in the hundreds of billions, add in medical bills for disabled veterans,
then throw in the costs of National Guard reservists being pulled from
small businesses, and pretty soon you're talking real money.
A year after the election, approval ratings for the victorious president
continue to sink to all-time lows, and "staying the course" remains
official Washington policy for Iraq.
In this context, it's not surprising that Republican realists like Brent
Scowcroft (who warned in a Wall Street Journal essay before the war that
"it undoubtedly would be very expensive, with serious consequences for
the U.S. and global economy") are making noise again. And it would make
perfect sense if an increasing number of those Bush CEOs were by now
pining for a return to Clinton- style multilateral globalization of a
sort still championed by many Democrats.
Neither of these camps will seem particularly appealing to progressives,
but they pose a genuine threat to the imperial globalists who seem
incapable of extracting themselves from Iraq. Indeed, intra-party
rivalry among the Republicans, which is likely to increase as we enter
an election year, could play a vital role in turning White House hawks
into dead ducks.
All the better if this transformation is sped by dissatisfaction from
corporate leaders re-evaluating the costs of Bush foreign policy and
deciding that empire just doesn't pay.
Mark Engler, a writer based in New York City, is an analyst with Foreign
Policy In Focus. A longer version of this article appeared on www.
tomdispatch.com. Contact us at insight@....
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Mike