If Ralph Waldo emerson had a 19th-century Facebook page, his "Favorite Quotation" (or maybe I should say my favorite Emerson quote) would likely be: "Things are in the saddle, and ride mankind."
For the last six months, events have been in the saddle of the world economy and they might ride us for quite a while. Every day seems to bring bad news, with more on the way. Will commercial real estate crash next? Is General Motors toast? Dow 5,000, anyone?
When President Obama was sworn in, the stock market dropped. When he signed the largest economic recovery package in American history last week, the Dow plunged nearly 300 points. His widely panned bank rescue plan and even his better-received housing rescue plan both laid eggs on the Street.
Obama says he doesn't worry too much about short-term market swoons, and he's right not to. Who elected greedy gamblers to represent us? But the market is now based less on assessments of specific companies than on reaction to the federal government. And that reaction, cascading down to Main Street, is a fair reflection of the nation's pessimistic mood. The new president is popular and refreshing, but still well short of transformative. For all of the legislative achievements of his first month in office, Americans have not yet had their faith in the future restored.
What's a president to do? If he starts in with the happy talk, he sounds like John McCain saying "the fundamentals of the economy are strong," which is what sealed the election for Obama in the first place. But if he gets too gloomy, he'll scare the bejesus out of the entire world. The balance Obama strikes is to say that things will get worse before they get better, but that they will get better. Now he must convince us that's true.
Conservatives smell blood. The Republican National Committee issued a press release saying Obama's first month was all about "wasteful spending, failed bipartisanship and questionable ethics." Columnist Charles Krauthammer called the $787 billion stimulus package "a legislative abomination," and Karl Rove wrote that "the more Americans learn about the bill, the less they like it."
Polls say otherwise. The public likes the signs of action, respects that the new president is willing to admit error and appreciates his constant reminders that there are no easy cures to what ails us.
But that still doesn't make anyone feel any better. The price of lowered expectations is heightened anxiety. Invoking a potential "catastrophe" if his recovery bill wasn't adopted may have been savvy short-term politics, and even accurate Keynesian economics, but it didn't do much for our nerves. Nor did the efforts of Republicans to reduce the size of the stimulus to the point where most economists say it won't be a strong-enough jolt.
We all know that nothing will improve until the arteries of credit are unclogged, but both the old and new Treasury secretaries botched their first attempts at the procedure. Worse, Tim Geithner is pooh-poohing temporary federal takeovers of some banks, arguing that "governments are terrible managers of bad assets."
This attitude ignores history and delays the inevitable. During the 1980s, the federal Resolution Trust Corporation did a fine job selling off the diseased assets of the savings-and-loan industry. Now Geithner and Obama should be preparing the financial world for something similar with banks. Nationalization? Perish the word, not the thought. When Franklin Roosevelt closed the banks in 1933, he festively called it a "bank holiday," and the bank receivers assigned to shutter some and take over others were dubbed "conservers." Obama and his message mavens still haven't found the language to frame their plans and lift our sights.
So why do I still think Barack Obama has a good chance of restoring confidence and pulling us back from the brink? Why do I figure Joe Biden had it about right when he said in his inimitably indiscreet way that their chances of failure were about 30 percent, which leaves a healthy 70 percent chance of success?
Because my take on Obama, based on conversations with him and his team stretching back more than four years and extending into the White House, is that he has a firm grasp of the psychological and substantive challenges of the presidency. Equally important, his 2008 campaign proved that he possesses a superior sense of timing. He knows that now is not the moment to cheerlead, not when the financial players are lying dazed on the field. There will be time for that, when the banks have been "restructured" (see, that sounds better than "nationalized") and the credit starts flowing again.
The psychodynamics of the recession aren't hard to fathom. The people need a vision. They need to see that the president is on their side (which is why he now spends a day a week on the road). And like seriously ill patients, they need a clear yet flexible action plan that takes them beyond blind optimism to well-founded hope.
The critical element, of course, is confidence. Leadership in war is mostly about concrete tactical and strategic decisions. Leadership in a peacetime crisis also involves making the right calls on policy—but at bottom, it's dependent on a subtle understanding of how to make people feel better so that they invest in the future.
Too much confidence makes people and nations hubristic, while those on the receiving end feel conned. Too little confidence breeds timidity and uncertainty, which can be fatal. It doesn't take a shrink to know that finding the right balance is the key to a rounded life, private or public.
For years the country has lacked that balance. Financial and governing elites, of both parties, were too confident for too long in the unerring genius of markets. American consumers somehow came to believe that plastic is a convertible currency and that there's nothing wrong with buying a half-million-dollar house when you only make $40,000 a year.
When the Reckoning came, nearly everyone started moving too far to the other extreme: no borrowing, just burrowing. Hunker down with a DVD and some comfort food, if you can afford it. This is rational enough; consumers can't spend money they no longer have and won't have any time soon. But the effect is a vicious blow to our sense of self.
We know that confidence can be wonderfully contagious. But it has to be merited and genuine. After the excruciatingly close 2000 election, President Bush pretended that he had won a big mandate. This was understandable politically, but artificial. The cocky Texas affect was a cover for deep familial insecurity, but it worked until Americans ran into trouble. When Bush said things were going well ("Heck of a job, Brownie") and the public knew objectively that they weren't, he was done.
It's early yet and much can change, but the new president is showing signs of carrying himself in a more naturally confident way, with the right blend of traits. He's bold enough to add a couple of zeroes to the conversation about spending, but humble enough to utter those three most unpresidential words: "I screwed up."
Obama's confidence is the product of an unusual combination of good early parenting by his mother and grandmother and his own search for racial identity. "The earth shook under my feet, ready to crack open at any moment," he writes in "Dreams From My Father" of a moment of painful clarity when he was in high school. His white relatives, he now realized, could never understand him. "I stopped, trying to steady myself, and knew for the first time that I was utterly alone."
After this confusing period, raising himself—and learning who he was—became an enormous source of self-confidence. Faced with fitting in nowhere, he learned to fit in everywhere, or at least make an attempt to understand whatever new context presented itself. One critical inheritance was his mother's anthropological eye (she studied Indonesian culture). This open and nonjudgmental frame of reference—and his own writerly detachment—give him a rare mental buffer zone that is a great asset in the hurly-burly of the presidency.
From the time I first met Obama nearly a decade ago, all his people have said essentially the same thing about him: the boss doesn't overreact or underreact. He's the Goldilocks man—not too hot, not too cold. When Tom Daschle's cabinet nomination blew up, sending Washington into a tizzy, he stayed calm and blamed himself instead of lashing out. But he also vowed to travel incessantly and escape what he considers to be the trivial intrigues of the capital.
Obama gets annoyed a little more than his staff would like to admit, especially when his sense of control is threatened by self-promoters or people talking out of school. But the public image of an unflappable and even-tempered president is not at odds with the private Obama.
All this offers the president the chance to redefine the classic political confidence man, the fast-talking professor Harold Hill (from "The Music Man") who trades on people's faith for his own benefit. Obama is playing a higher-order confidence game that's more akin to the one played by Joe Mantegna in "House of Games" and "Glengarry Glen Ross" by Chicago-born playwright David Mamet. Whether selling real estate or anything else, Mantegna insists that he is offering his trust and confidence in the potential buyer, instead of asking the buyer to trust him. Similarly, Obama wants voters to judge his performance in office instead of asking them to just trust him. Of course to start the performance, ahem, he needs the money upfront.
At a stop in Florida in mid-February, Obama said publicly what he has confided to aides since early in the 2008 campaign: he could be a one-term president. "I'm not going to make any excuses," he told the crowd. "If stuff doesn't work out and people don't feel like I've led the country in the right direction, then you'll have a new president."
This is an inspired psychological game because it doesn't sound like a game. It sounds like real accountability for results. But Obama is slyly defining downward the standards of judging him, so that if 3.5 million jobs are created or "saved" (whatever that means) and the economy stops its free fall, he can look successful even as hard times continue.
The secret is to stay always in motion, dealing the cards instead of having them dealt to you. During the transition, Obama developed a day-by-day plan for his debut, and he's executing it well. In his first month, the list of achievements is impressive: universal health insurance for children; more pay equity for women; higher fuel-economy standards for autos; the first major investment in inter-urban trains; electronic medical records; hundreds of new charter schools; new money for college loans; help to homeowners facing foreclosures, to mention only a few.
The GOP did a good job trivializing the stimulus, but Obama may have the last laugh. The package is so big, and stretches across so many states, that it provides him at least four years of photo ops as Daddy O on tour, bringing home the jobs right in your local media market. It was hardly a coincidence that video of bridge repair in Missouri began airing only moments after the president signed the bill.
Obama is betting on two things: first, that people are so tired of being bamboozled that a little straight talk about their woes will make them feel more in control, the prerequisite for genuine confidence. And second, that he'll get props for trying, that the very effort of riding events instead of letting them ride him will at least offer the illusion of mastery. Once these mental pieces are fastened in place and we're fully "in recovery," to use therapy lingo, the enduring problems won't seem so terrifying anymore.
Obama knew last fall that he would have to move swiftly and pragmatically to confront the crisis. Abraham Lincoln is his favorite president, but his model right now is FDR, whose New Deal was based on his faith in "bold, persistent experimentation."
"Here's the bottom line," Obama told a group of columnists on the day his recovery program was approved. "We will do what works. It is going to take time to lay out every aspect of this plan, and there are going to be certain aspects of any plan which will require re-evaluation and then have some experimentation— if that doesn't work, then you do something else."
Obama has the chops to sell that approach, starting with his already-proven ability to be the nation's teacher in chief. This was FDR's secret weapon on the radio, and it can be Obama's on TV and the Web. He's the smart, cool instructor, trusted by the class to explain something important even if a little complicated. All that's lacking is a bit more humor and a few catchphrases to simplify the message.
Obama is rightly allergic to canned sound bites, which he finds phony. But as Ronald Reagan showed ("Mr. Gorbachev, tear down this wall!"), the right one-liners and vivid metaphors can help communicate complex ideas. They also generate confidence-building "razzle-dazzle," as Billy Flynn, the character played by Richard Gere, puts it in the musical named for Obama's hometown. The Windy City president could use a little less University of Chicago and a little more "Chicago."
Even without razzle-dazzle, Obama will need all of his theatrical skills. He must be like one of those performers who balances a dozen spinning plates at once. If he steps too abruptly toward one plate, another might crash. Nearly every decision can shatter on impact.
Inside the White House, the central tension so far is between speed and thought. Rahm Emanuel coauthored a book in 2006 that divided Washington into hacks and wonks. The hacks want speed—get something done ASAP. They figure any problems can be fixed later. The wonks (who recently showed up to a White House meeting wearing beanies after Obama dubbed them "propeller heads") want policy implications carefully weighed from the outset.
Confidence depends on the right balance between the two camps. If the wonks keep the hacks from moving quickly, political victories (and renewed confidence) will be delayed. But if hasty action leads to sloppy, half-baked solutions (as in the initial Geithner bank-bailout plan), confidence will erode.
Witness the speed with which the recovery package was pushed through by Obama aides who had just found out where the bathrooms were located. This raises the odds that some of the money will be spent poorly. We'll know soon if the White House's special auditor teams and new crowdsourced accountability system (run through Recovery.gov) can really work, and if Obama will be praised for identifying waste in his program, or crucified for it.
That, in turn, depends partly on how the follow-the-money story plays out on cable TV, a major Washington player nowadays that poses its own trade-offs for the White House. If the president and his people pay too much attention to the Beltway chatter, they'll get dragged into the same old partisan battles they hope to transcend. But ignoring all the capital noise can leave them flat-footed, as they were for a few days during the stimulus debate. The same thing happened a year ago during the Reverend Wright imbroglio.
So far, the hacks still set the pace. For all the talk of failed bipartisanship, the president has close to complete control of Congress and plans to press the advantage. The longer the recession lasts, the more points Obama will put on the board, because doing nothing amid adversity is not an option, at least not to Democrats. Just as President Eisenhower got education funding and the interstate highway system approved as "national defense," so Obama will likely package and sell health-care reform, a new energy policy and even national service as "recovery and reinvestment."
President Obama's first month in office was bracketed by plane crashes. It's tempting to ask whether he'll land our plane safely in the Hudson or crash it into a house in Buffalo. Probably neither. Obama, like most successful presidents, will likely end as he is beginning, with some wins, some losses and some sense that he helped us fly through the turbulence with our heads held high.