"WE WON," an Iraqi militiaman in Falluja crowed to reporters, "We didn't want the Americans to enter the city and we succeeded." The Iraqis there have created a no-go zone every bit as effective as the old no-fly zone imposed by America. Better still from the locals' point of view, a few hundred "thugs," to use the president's term, were gloating as American Marines loaded their gear onto trucks to prepare for their retreat from the city. Best of all, Major General Jassim Mohammed Saleh, late of Saddam's Republican Guard and a Saddam-look-alike, rode triumphantly through town on April 30 to cheers. Whether he announced, "Mission accomplished" is not recorded.

That was too much for the Bush administration. So after handing the Iraqi militants and foreign terrorists a public relations victory, the administration announced that General Mohammed Latif, an allegedly anti-Saddam, Iraqi intelligence officer, is in, and Saleh is out. Well, not really out: Saleh will command one of the battalions of the new security force, to the consternation of the Shiites, who remember his role in crushing their 1991 uprising against Saddam. And the Marines, who had already dismantled many of their positions, were told to hang around should the Fallujans refuse to accept the Baghdad-based Latif. Given all of this confusion, it is little wonder that some observers say Saddam sits comfortably in prison, penning notes to relatives and awaiting an eventual return to power, which is just what happened the last time he was thrown into prison by a legitimate Iraqi government. One high level administration official tells me that the to-ing and fro-ing is due to a military chain of command that is in disarray, and to a breakdown of civilian control over the military.

All of this despite George W. Bush's repeated pledge not to allow a few thugs and remnants of the old regime to recapture Falluja. They will be killed or captured, he promised, as would the radical cleric Moktada al-Sadr, who at last report had been neither, but had settled comfortably into a mosque in Najaf, protected by his militia, and in no fear that Bush's threats would result in any attempt to dislodge him.

As if these reports from Iraq were not disturbing enough, it is beginning to occur to many of the president's supporters that the Falluja climb-down is just the latest in a series of examples of what the president's Texas friends would call "all hat and no cattle"--an epithet said to have been applied by then-governor Ann Richards to Bush in an effort to classify him as a pretend cowboy who dresses and talks the part, but is pretending to be what he isn't. In New York and Vegas, the phrase is "four flusher," to denote a poker player holding a worthless hand, one card shy of a powerful flush, but bluffing in the hope that opponents will mistake his smirk for strength. In Chicago, a big-talk-no-substance guy flashes what is called a "Chicago roll," a large wad of single dollars around which a $100 bill is wrapped.

Start with the budget. The president has railed against those wasteful spenders in Congress, while presiding over the largest expansion of the welfare state since the glory days of Lyndon Johnson. Nonmilitary, non-homeland-security expenditures have skyrocketed, and are headed higher. The prescription drug program alone is likely to end up claiming 2 percent of GDP, a price considered by Karl Rove a bargain if it purchases Florida's key electoral votes. Indeed, were it not for obstructionist Democrats in the Senate, the flood of red ink would be even greater: The president can't get the Senate to pass his multibillion dollar energy bill that anyone who knows anything about energy markets says will do nothing to reduce our reliance on oil imported from the Bush family friends in Saudi Arabia.

Then we have the fiscal situation. The president quite properly nodded to the memory of John Maynard Keynes, and persuaded Congress to cut taxes so as to stimulate the economy and reduce the severity and length of the recession he inherited from the Clinton administration. But that was then and this is now. The economy is booming, growing at a rate of about 5 percent. The housing market is moving from strength to strength, the manufacturing sector is experiencing its fastest growth in five years, the job market is recovering, consumer confidence is on the rise, Wall Street is again showing big profits and paying outsized bonuses, smiles are returning to the faces of Silicon Valley options-holders, and pricing power is returning to boardrooms.

The tax cuts have done their work. But rather than turn to the problem created by a budget deficit that is approaching an unsustainable 5 percent of GDP, and this before the baby boom generation has begun to claim its Social Security benefits, Bush continues to increase spending and press for still more tax cuts. True, he occasionally threatens to rein in spending by vetoing Congress's most outrageous spending bills, but all the while the cap has remained firmly screwed onto his veto pen. The time is long past when anyone believed that the tax cuts would be self-financing, or had any hopes that the president's proposed budget had any chance of being adopted. Unless the president has signed on to the theory that deficits don't matter, his talk about cutting the deficit in half is nothing more than that--the talk of a man with a large hat and a very small herd.

Which brings us back to Iraq, and the question of whether resolute rhetoric can carry the day in the war on terror. It turns out that a few generals were right, and that the Rumsfeld-Wolfowitz duo was wrong about the number of troops needed to eliminate resistance in Iraq so that reconstruction might proceed. This magazine has long argued that the military needs more money and more troops. No one any longer denies that is the case. For one thing, there are not enough boots on the ground in Iraq, where we can field no more than 20,000 fighters at any one time. For another, after scraping up soldiers from around the world and from behind desks, the Defense Department has left us vulnerable to the lunatics who run North Korea, and to any other regime that, sensing our lack of resolve in Iraq, decides that now is the time to strike against American interests. That very much includes China, should it decide to assert its title to Taiwan while it believes our military is too thinly spread around the world to intervene.

The army, which had 18 active-duty divisions (about 700,000 troops) in 1991, now has only 10 divisions (and about 490,000 troops). Which puts a heavy burden on the National Guard and Army reserve units, consisting of dedicated but less well-trained men and women, many of whom never expected to do prolonged service overseas.

There is no cheap route to victory in the war on terror, which is, after all, affordable by our $12 trillion economy. But the president seems intent on accomplishing the incompatible tasks of persuading us that we are in a war for the survival of our values and way of life, while at the same time doling out tax refunds to keep us happily in the malls, resisting measures to reduce our reliance on Middle Eastern oil lest higher-cost gasoline crimp our summer driving vacations, and promising to take us to Mars. No pain, lots of gain--good for a reelection campaign, but not exactly in the national interest.

It is not only a question of being willing to spend what it takes to win this war. The president succeeded in getting Congress to authorize the expenditure of some $18.4 billion on reconstructing Iraq. But he can't even get his bureaucrats to spend that money. A full year after major combat operations in Iraq have ended, less than 5 percent of that money has been spent. Bush seems to have surrendered control of the pace of reconstruction to form-fillers, drafters of requests for proposals, auditors who have no sense of urgency, and a host of folks who seem to care not at all that Baghdad will swelter through the summer with only erratic supplies of electricity. While the bureaucrats are dotting every i and crossing every t, the reconstruction program languishes. This is, after all, George W. Bush's government, and it is difficult to believe that a single, jobs-on-the-line meeting of the relevant departments, in the Oval Office, wouldn't shake the money tree.

FORTUNATELY FOR THE PRESIDENT, he remains our best bet to lead us to victory in the war, and to prosperity in the future. John Kerry is as eager to call it quits in Iraq as is Bush, the main difference being that the Democratic candidate would have our troops hand over their responsibilities to blue-helmet U.N. peacekeepers with an unblemished record of failure, while Bush would hand off power to some version of a sovereign Iraqi government cobbled together by the U.N.'s Israel-hating Lakhdar Brahimi, and at least hang around long enough to restore some semblance of order to the country.

Give Bush the edge on this one, especially since Kerry's conceit that he can persuade a Franco-German-dominated Security Council to ride to the rescue is about as likely to be realized as the president's plan to cut the budget deficit. And Kerry's long history of opposing increases in military spending, and his commitment to the left of his party to step up spending on domestic entitlement programs, suggests that he is even more likely than the president to look for victory on the cheap. Besides, Kerry has said that every fire engine we put in Iraq, and every school we refurbish there, comes at the expense of an American city. Which is why he voted against the $18 billion appropriation right after he voted for it. Bush, at least, recognizes that it is not in America's interest to leave a ravished Iraq in our wake; Kerry either doesn't see that, or is so beholden to his Come-Home-America constituency that he has no choice but to ignore the needs of Iraq.

Both men will have to do something about the budget deficit. Kerry proposes to raise some $850 billion over 10 years by increasing taxes on families earning over $200,000 per year, but to spend it on expanding health care coverage rather than on deficit reduction. Bush proposes to spend that $850 billion on more tax cuts. As far as the red ink is concerned, this is much of a muchness, although tax cuts generally have an efficiency edge over more government spending. What can be said in the president's favor is that, if reelected, and relieved of the necessity of ever again seeking voters' approval, he is in a better position than Kerry to fight for the reforms needed to keep the Social Security and Medicaid/Medicare systems solvent, and to begin the long slog towards fundamental tax reform (those reforms are already on Bush's drawing board).

And while we are thinking about economic policy, it would be well to ask ourselves which candidate is more likely to introduce environmental regulations the costs of which exceed their benefits, which is more likely to appoint an EPA administrator who is insensitive to the trade-off between jobs and environmental enhancement, and which is more likely to satisfy trade union demands for protectionist measures and workplace rules of the sort that have brought European economies to their knees. The name Kerry comes up every time.

Not exactly inspiring reasons to fight for the reelection of the president, but reasons of sufficient weight to hope that Kerry continues his feckless wandering about the country in search of a message other than "I want to add 1600 Pennsylvania Avenue to my portfolio of homes."

Irwin M. Stelzer is a contributing editor to The Weekly Standard, director of economic policy studies at the Hudson Institute, and a columnist for the Sunday Times (London).

Next Page