as many newspapers and magazines are headed toward premium memberships, there is no doubt that the links i post here to articles from papers and magazines that i receive may not work in the future without subscription.

i read an interesting editorial in the financial times today by peter haass, president of the council on foreign relations.  in essence, mr haass analogized foreign policy to financial portfolios, and asked of us to perform our annual assessment of our portfolio.  mr haaas claims that as an investment, the war in iraq cannot be completely abandoned, or else we sell that part of our portfolio with a loss instead of breaking even.  from a portfolio management standpoint, he claims that president bush has done exactly what most fund managers would do.  however mr haass’ prescription for our foreign portfolio in the upcoming year is to reduce our investment in iraq and eventually diversify the portfolio to include greater investment in iran and north korea.

i find this to be an interesting analogy for haass to make, given the fact that president bush has an mba and a lot of pundits tend to agree that he manages the country like a business manager, rather than a politician.  as such, it would seem reasonable or feasible that president bush’s actions may carry out in such an fashion.  from a financial perspective, a manager who is facing greater losses will choose to wait until the losses even out, before accepting such a divestment of funds.  in addition, the manager would also want to make sure there still remains enough capital to invest in such other funds.

from a political standpoint, this doesnt seem to be overly acceptable however, as we do not equate the cost of human life the same as we do monetary figures.  kenny rogers once said “you gotta know when to hold ‘em, know when to fold ‘em” and to that extent, there is even some financial truth to that.  knowing when to cut your losses is a crucial element to the political game in washington and the 2006 elections seemed to lock in that reality. finance isnt politics but in the approach to running a country, the analogies can easily become relevant, as evidenced by mr haass.  the faster mr bush is willing to accept these strategies, the faster the united states will find itself back on a more solid foreign policy track.