Selling America Short: Democrats' Defeatism Courts Disaster
by Chris Gabriel
Posted: August 14, 2007

John Pierpont Morgan, the legendary financier, famously opined that one would go broke betting against America. History over the past century has proved him to be correct.

Unfortunately, the Democratic leadership of this country seems to have missed out on Morgan’s advice. Aside from the noble Joe Lieberman, nearly everyone else of note in the party has hitched their star to the wagon of American failure in Iraq. This will have disastrous consequences either for America or for the Democratic Party—or both.

I have to emphasize that I am writing here about the party leadership and not the millions of well-meaning Americans in its ranks. In fact, I appeal to the sensible and serious majority among Democrats to consider what is being done in their name. Their elected leaders, instigated by a rabid and venomous minority, seem to have lost their bearings. I hope that these misguided standard-bearers can be reined in before massive damage is done to the Democratic Party. I may be a Republican, but this country needs two parties sincerely dedicated to its betterment in order to function as it was designed.

Now, please stick with me for a moment as I set up this piece with a bit of background from the world of investments where I work.

J.P. Morgan’s admonition against being bearish on the U.S. refers to the process of short-selling a stock. When an investor has an unfavorable opinion of a company, he or she can profit from any future decline in its value. Mechanically, this is accomplished by borrowing shares of that stock from a securities broker, selling them in the marketplace, and then buying them back at some point in the future at a (hopefully) lower price to repay the loan. The difference in value between the initial, higher sale and a subsequent, lower purchase is profit to the short-seller.

This all is well and good, but anyone engaging in short-selling receives a stern warning from their investment firm that the risk in such a scenario is unlimited. Buying shares of a company has limited risk. If the company fails all that you can lose is the amount of money you put into the stock. Potential losses from short-selling, on the other hand, are infinite. If the stock goes up rather than down, a short-seller will keep losing his bet. Moreover, there is no inherent limit to how far up a stock can go. Thus, a short-seller has no limit to their potential losses.

Someone needs to share this analogy with the Democratic leadership. It is one thing to be the reasoned voice of opposition. Likewise, legitimate disagreements over something as important as a war are vital to the decision-making process in a republic. Certainly one can find much to fault with the way in which the Bush administration has pursued the War on Terror. In contrast to principled opposition, however, Democrats have veered over the past several years to mindless antagonism. The difference is as fundamental as it is clear. Aside from Senator Lieberman, one can’t find a single prominent Democrat who seems to want us to win in Iraq.

In truth, Democrats have profited to date in their relentless criticism and obstruction of Bush’s foreign policy. Major mistakes in the conduct of the war played into this success, as any sensible observer would agree. The key question is, what do we do now? The answer from the Bush administration has been a wholesale change in military leadership and strategy. It is too early to tell whether this new approach will work, but it is far too early to tell that it will not. It is clear, however, that leading Democrats have committed themselves and their party to short-selling the strategy. As in the case of stocks, there potentially is something to be gained in this course. Likewise, however, there is much more to be lost.

As with short-selling stocks, Democrats have borrowed from their party’s vault of credibility to make a bet on our future. So far lacking any coherent solutions to our national security challenges, their potential gains are limited to the short-term damage they can wreak on Republicans. Democrats’ potential losses, however, are nearly infinite. Democrats swept to power in Congress last November on a wave of frustration largely stoked by their own relentless attacks on the President. If those assaults prove to have been mistaken, the stage is set for a long exile as the minority party.

Similar circumstances have existed in the past. A commander-in-chief found himself leading during a period of tremendous partisan strain in the 19th Century. A military conflict began and quickly turned for the worse. An already vocal opposition first demanded a change in strategy and then outright surrender. The President was stubborn and stuck to his belief in the cause for which he was fighting. He went through several unsuccessful military solutions and commanders before finding a winning formula.

Admittedly, this analogy is not perfect. George W. Bush is not Abraham Lincoln, and the war in Iraq is not the same as the bloodiest and only wholly intra-national conflict in U.S. history. Still, Democrats, as in Iraq, vehemently opposed Lincoln through every step of the Civil War. The cries of “disaster” and “unwinnable war” rained down after major Union losses like Bull Run and Chancellorsville. Only Sherman’s timely capture of Atlanta in 1864 enabled Lincoln to win re-election. Only Lincoln’s gamble on a hard-drinking, hard-fighting general named Grant finally turned the tide.

The outcome of the Civil War (like nearly all wars) was far from certain until the very end. Wars, like most things in life, don’t amount to much without the assumption of considerable risk. In the 1860s, the result of the military struggle was not only defeat for the Confederacy but disaster for the Democratic Party. In a serious of bitter, partisan elections that followed the conclusion of the war, Democrats failed to win the White House until 1884. That is an unprecedented 24-year exile from executive power. Horatio Seymour (forgotten loser in 1868), meet Hillary Clinton?

Unfortunately for leading Democrats, early signs from Iraq are that the new commander, General David Petraeus, and his team are producing worthwhile results. At the very least, reports indicate that the situation on the ground is changing in meaningful, positive ways.  Compelling evidence of this came on July 30th in The New York Times (hardly a den of Republican apologists) in the form of an opinion piece from two Democratic analysts at the left-leaning Brookings Institute in Washington.

Michael O’Hanlon and Ken Pollack based their arguments on recent first-hand experience in Iraq compared to their own earlier observations. “As two analysts who have harshly criticized the Bush administration’s miserable handling of Iraq,” they wrote, “we were surprised by the gains we saw and the potential to produce not necessarily ‘victory,’ but a sustainable stability that both we and the Iraqis could live with.” They further concluded that it is well worth continuing on the present course at least into next year in order to see what happens.

This is good news, right? A “miserable” failure has the chance to be salvaged? There should be thoughtful scrutiny from all Americans on how best to proceed from here, yes? Not according to leading Democrats. First-term Congresswoman Nancy Boyda (who narrowly unseated a Republican incumbent last fall) typified the attitude of her colleagues by storming out of a Congressional hearing last week saying that positive testimony about Iraq did not “deal with the reality of this issue.”

Representative Boyda’s prejudices aside, anyone who has studied war knows that change in military circumstance while engaged in combat is constant. The winners most often are the side that ends up learning better and more quickly than their opponents what it will take to succeed. The signs from Iraq are beginning to show that our marvelous military (arguably the finest in the history of the world) is adjusting to its circumstances and is developing plans that are working.

The Democrats’ problem is that they cast their lot with failure ages ago and are acting like they have too much invested now in that course to pursue any other. It is hard to forget that Senate Majority Leader Harry Reid declared the war “lost” in April before the initial increase in troops and reorientation towards counter-insurgency warfare had fully begun. The inadvertently candid Jim Clyburn (no crackpot back-bencher, but the Democrats’ Majority Whip in the House of Representatives) went so far in early August as to say that positive reports out of Iraq would be “a real problem for us [Democrats].”

I don’t think that it takes much to be disturbed by that last remark. In essence, Democratic leaders have put their own personal and partisan interests against that of the country as a whole. No sane person could argue that America is better off losing in Iraq than winning. Surely, every American needs to support victory if it is at all possible. Reflexive defeatism, on the other hand, is entirely self-fulfilling.

Even if the Iraq mission eventually does fall apart, Democrats now will share part of the blame due to their relentless negativism. It is clear that such an organized front of failure has made the struggle in Iraq more difficult than it might have been. Our enemies see our news reports and, like all guerillas, judge the intensity of their effort based on their perception of our will to defeat them. They have had much encouragement from the left side of our political aisle.

This point was driven home powerfully in The Wall Street Journal. The highest ranking KGB officer ever to defect from the Soviet-bloc, Ion Mihai Pacepa, published an opinion piece on August 7th likening what Democrats inadvertently are doing to American credibility abroad to what the Soviet Union purposefully attempted to do through its propaganda smear-campaigns during the Cold War. As he put it, “[I]nternational respect for America is directly proportional to America’s own respect for its president.” A proud American now, Pacepa pleaded with Democrats and Republicans alike to put aside partisan bickering for the sake of a nation at war. As he put it, “[I]f America’s political leaders, Democrat and Republican, join together as they did during World War II, America will win. Otherwise, terrorism will win.”

The irony in all of this is that Democrats have put themselves in a potentially hazardous position even if their doomsday predictions come true. Pure short-selling of stock, even when it works, is considered unseemly by most investors. There is something un-American about actively rooting against the hard work of others.

Habitual short-sellers are a furtive bunch who would win no popularity contests (or elections). I think that the middle-of-the-road American public is beginning to feel this way about leading Democrats (which would help to explain why Congress’s approval ratings are even lower than Bush’s.) Moreover, if Gen. Petraeus and the men and women under his command achieve some measure of success in Iraq, the Democratic leadership surely will be judged harshly by both history and the American electorate as undermining their country in a time of trouble.

In sum, neither the potentially short-lived Democratic “victory” if the Iraq mission fails nor the long-term catastrophe for Democrats generated by success in Iraq are outcomes I would be excited about if I was planning Democratic strategy, not just for the next election but also for the next generation. Pleas for what best serves the nation aside, pure political cynicism would suggest that it is better to give Bush all of the rope he wants at this point. If he hangs himself with it, Democrats surely will use that failure to their advantage. If Bush succeeds, at least they won’t overtly have stood in his way. (Although it is a bit late to avoid that impression.)

Hopefully, rank-and-file members in the proud party of FDR, Truman, and Kennedy will draw the conclusion that the current course chosen by their leaders does not make sense. Respectful discussion and disagreement can help direct America towards success if it honestly attempts to be constructive. Knee-jerk partisan sabotage undermines our prospects for victory and has the potential to backfire terribly on the would-be saboteurs.

At present, leading Democrats obviously are playing politics with America’s security. That just can’t be a winning strategy. It never pays to bet against America.

Copyright © 2007 Chris Gabriel