President Obama is about to give a speech in which the worth of the words may well be calculated for days to come. Tonight, before a joint session of Congress, the president will address the global economic crisis and his plans for economic recovery. What he says, and how he says it, may well boost markets or cause them to continue their cascade toward an unknown bottom.
In recent days, Obama has incurred criticism for sounding too pessimistic. I’m not sure why it’s considered too pessimistic when the leader says that, absent swift and sacrificial national action, we could well enter a period of global economic catastrophe. Strong words for dismal times.
On the other hand, I do agree with those who are encouraging the president to demonstrate the kind of hopeful leadership that the nation needs right now. Echoes of President Franklin Roosevelt’s call to action — “Nothing to fear but fear itself” — run through the pundits’ ruminations on what Obama should say.
One of the more fundamental problems Obama faces is the stunning philosophical turn-around of once-ardent free market capitalists. With prominent banking institutions now on the verge of nationalization, the capitalist economy seems on the verge of becoming…. well, perhaps “socialist” is too strong a term…. but what we’re seeing sure is not an affirmation of free market principles, that’s for sure. We seem to be in a philosophy-free zone right now where the only guiding principle is to prevent one more major institutional failure. Is that the right place to be?
When the smartest people in town, perhaps in the world, can’t really determine when or how the recovery will begin, far be it from me to offer free market advice from the bleacher seats. But even from this vantage point, it seems clear to me that the president has to stop handing out bailouts, and start insisting on some genuine self-help among financial institutions and consumers alike. Where is the call for a complete restructuring of how companies are organized and how they do business? We see scandalous stories of excessive compensation, but few real proposals for changing the idea of the executive suite entirely. I don’t think government should offer that prescription at all — but private initiative should surely get cracking on a whole new Idea of the Corporation. We should start with a serious examination of the behaviors that caused the current crisis — all very human behaviors fueled by greed and competition and desire for status and prestige. Corner offices and trophy homes, big portfolios and big cars.
Watch the president’s speech tonight with a calculator…. his every word will translate into $$$ one way or the other.