Published: October 07, 2008 07:10 pm            

McDONALD: He’s taking the lead with bailout option

James MacGregor Burns, presidential biographer and an authority on leadership studies said “divorced from ethics, leadership is reduced to management and politics to mere technique.”

There certainly was an awful lot of technique and little leadership in the final passage of the Wall Street bailout last week. You would think with an approval rating of 10 percent, Congress would be a little embarrassed to attach pork to the bailout; but no, they were absolutely shameless and totally devoid of ethics.

Warren G. Bennis, widely regarded as a pioneer of the contemporary field of leadership studies said “leadership is the capacity to translate vision into reality.”

We have just come through a tumultuous week of assessing the economic condition of the country and completed the first hurtle to righting it. Besides the aforementioned pork, what I have not heard articulated is a vision for effective reform to minimize the damage in the short run and the prospects for the long run.

In the wake of the mortgage crisis and failures on Wall Street and with the upcoming election, one asks what the attributes of a leader are.

Authors James Kouzes and Barry Posner identify 20 characteristics of leaders in their “Leadership Challenge.” This list is given periodically in a survey to corporate managers with the most recent list displayed below in ranked order.

1. Honesty

2. Forward-looking

3. Inspiring

4. Competent

5. Fair-minded

6. Supportive

7. Broad-minded

8. Intelligent

9. Straightforward

10. Courageous

11. Dependable

12. Cooperative

13. Imaginative

14. Caring

15. Mature

16. Determined

17. Ambitious

18. Loyal

19. Self-controlled

20. Independent

This survey has been given periodically since 1989 by Kouzes and Posner. While some characteristics have changed drastically, such as ambitious holding a No. 9 spot in the 1980s to No. 17 in the most recent survey. Four characteristics have held steady over the years as the top four to five on the ranking. The current top four characteristics of honesty, forward-looking, inspiring and competence have always been in the top five.

In light of the bailout plan last week, I believe it was necessary for the economy as a whole but it was not very imaginative and it focused on Wall Street and also $150 billion in extras, once again that the Congress should be ashamed of tacking on to the bill.

I am not saying that I have all the answers to how Congress should have responded or how President Bush should have led, but I did have a dream the other night how I might have approached a bailout plan. Firstly, every homeowner with an outstanding mortgage gets a six-month grace period to refinance their mortgage at 3 percent on a 30-year fixed rate.

Let’s say that you have a balance of $150,000 on your mortgage at 5.8 percent. Refinancing at 3 percent will reduce your payment by $300. That money can be placed back into the economy in purchases in the product market, which will then stimulate growth in the factor market.

Perhaps to help with retirement as part of the plan, one third of the savings must be placed into a selection of mutual funds for retirement. Hey, that might relieve some of the pressure on Social Security. There are approximately 82 million primary mortgages out there today and multiplied by $300 equates to $246 million pumped into the economy immediately.

My bill would also eliminate ARM and interest-only loans, which are predatory and make the ability to sustain such loans much like rolling the dice at a casino. I think something along these lines may be more palatable in the long run.

While I’m at it, let’s also place money into taking better care of returning veterans from an emotional standpoint and on-base living conditions and pay for those currently serving.

Wow, I kind of got carried away with my imaginary power. It may or may not make sense, but certainly we could have been a bit more creative and left out the pork. Congress had to do something, as a ripple effect in the world economy would have deep and long-lasting effects.

As we reflect on the recent events in Congress and on the upcoming election, I would be interested to hear your thoughts on your rank order of the characteristics of leaders. Please e-mail me your rankings of the 20 terms.

There is a lot of talk this election cycle about change, experience and leadership; this is a good time to think about what makes a good leader.

Tim McDonald can be reached at timothy.mcdonald@agsfaculty.indwes.edu

        

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