What began with the collapse of Bear Stearns has transformed into a far more ominous situation. First, Lehman Brothers went down, and then AIG. Next, the first bailout bill was defeated in the House; the stock market responded with a drop of nearly 800 points—its steepest decline since 9/11. Washington Mutual then experienced the largest bank failure in American history and yet the story was so trivial that it hardly made a ripple. Paralysis has gripped our economy, and some have begun to fear a second Great Depression. But this financial crisis has, in turn, led to another frightening revelation: our country is also plagued by a leadership deficit.
The course of history has frequently been defined by individuals whose Herculean efforts matched the enormity of the moment. In our own history, men like Washington and Lincoln, Grant and Eisenhower, stepped forward to secure the blessings of liberty for their countrymen and for their posterity. These men possessed the sagacity to divine the proper course of action, and the fortitude to see it through.
At the present moment, however, no such leader can be found on the national landscape. The most logical place to look, of course, is to our president. But there we find only a vacuum. President Bush, after all, lost the people’s trust long ago. Saddled by lame duck status and abysmal approval ratings, it would have taken an extraordinary effort to cause the people to listen and the Congress to act.
And yet the administration’s efforts tended towards the opposite extreme. Over the last eight years, the Bush White House has consistently lost the P.R. war. At nearly every turn, the administration has failed to define issues and stories on its own terms, and has thus been forced to fight uphill battles on a repeated basis. We saw as much with the first bailout bill. Instead of pitching it as an economic remedy that would cost considerably less than its ostensible price tag, the White House went along with the characterization that the bill was nothing more than a handout to greedy Wall Street bankers—a handout worth more than the cost of the entire Iraq War, no less.
With the terms of the debate so defined, the administration then chose the worst possible surrogate to plead its case. Perhaps no man has labored harder to save our economy than Treasury Secretary Paulson. But the decision to make him the plan’s top spokesman reveals both ineptitude and tone-deafness. For all his expertise, Paulson was unable to explain either the magnitude of the credit problem or the mechanics of the solution in terms that the American people could easily understand. And why were the people so opposed to the bailout, after all? Because they saw it as a reward for corporate greed. And yet the administration trots out the former chairman of Goldman Sachs to argue otherwise?
Whatever mistakes have been made over the last eight years, I still firmly believe that President Bush is a good and decent man who values the interests of the country over his political well-being. But he has been rendered powerless at a time when strong leadership and a reassuring voice are badly needed.
Our other national leaders, too, have failed to rise to the occasion. They, however, do not have the luxury of pleading lame-duck status. While Minority Leader Boehner rather selflessly put his own political future in jeopardy by strongly advocating the bailout bill’s passage, he was incapable of getting more than a third of Republicans to vote yea the first time around. It is hard to imagine DeLay or Hastert falling that far short.
Speaker Pelosi, meanwhile, demonstrated incompetence to the highest degree. After insisting that the House consider the bailout first, she called a vote without knowing how it would turn out. She only knew that it would be close, and that there were people still on the fence. So how did she go about convincing those wavering members? Unlike Boehner’s impassioned plea for his colleagues to set political self-interest aside, Pelosi turned to partisan rhetoric, blaming Republicans and their free-market philosophy for years of avarice and excess. While it is unclear whether Pelosi’s speech cost a dozen or more votes, one thing is clear: this was not Webster’s reply to Hayne. This was not Lincoln at Gettysburg. This was pettiness and smallness at a time when giants were needed.
And while our presidential candidates both played a role in the deal-making process, neither did enough to be heralded as a national savior; the same can be said for Senators Reid and McConnell. In the end, the drop in the stock market and the allure of pork-barrel spending were probably more influential than anything else. And while a trillion dollar drop on the Dow Jones is, of course, apt to make an emphatic point, it cannot change the fact that instead of preventing problems, we are only reacting to them—and poorly, at that.
I am confident that our economic crisis will eventually pass, and that America will once again experience undeniable prosperity. But while that outcome seems a foregone conclusion, I can only hope that superior leaders will one day be equally as abundant.
Best,
Carl