The American political system responds rather well to a national security threat.
We're united, we identify the enemy, and we debate various strategies for countering the threat. However, we're conflicted with an economic crisis of the magnitude we see today.
These problems are especially vexing because they're so complex and interrelated, both here and in our relations with other countries. It's one thing to hear opinions about offshore oil drilling or capital punishment. But dealing with the nuances of the banking world - swaps, repurchase agreements, financial intermediation, derivatives and stock market procedures - eludes our common understanding.
There are more questions than answers. Who should get bailed out? Under what conditions and for how long? How much deficit spending can we afford? Should the opposition party give the president time to see if his policies will work, or should they oppose those they think are wrong from the get-go?
A spirited debate about how to stop the economic free fall and rebuild the economy is understandable, because politicians and officials have to chart the course without any recent experience to guide them.
If they succeed, then we'll be better off in two or three years than we were five or six years earlier. If they fail, then we've had an expensive lesson in what not to do.
The economist John Kenneth Gailbraith once said, "The only function of economic forecasting is to make astrology look respectable." This isn't reassuring, given the enormous sums of money that have been committed to stabilizing the economy. Yet the alternatives could be far worse.
During most any major crisis, we look to the president for reassurance that the government understands the emergency and the appropriate steps are being taken to end it. We want a leader who is articulate in explaining the problems and one who balances their seriousness with realistic optimism that we will prevail before long. We don't want to see panic at the top.
In 2008, President George Bush sought to stem the economic collapse with the Troubled Asset Relief Program (rescue 1), a stimulus plan Congress ratified to help the Detroit automakers, big banks, government mortgage lending institutions and the insurance giant AIG. After his election, President Obama said this crisis was exactly the time to focus on three major issues that impact the economy: health care (costs too much for individuals and businesses, too many noninsured), energy (become free from dependence on foreign oil), and education (reduce high school drop out rates, increase college graduation rates).
President Obama successfully pushed his stimulus plan (rescue 2) through Congress, one that is intended to help states with infrastructure funding, but without the bipartisan support he wanted. His budget for FY 2010 ($3.6 trillion; rescue 3) reflects his resolve to tackle these issues and provide needed funds for other projects but at a substantial increase to the national debt. Bipartisan concerns about the size of the budget proposal will force spending compromises in Congress.
Both Congress and the president have to be on the same page if constructive policies are to be enacted to resolve the crisis. This is where politics becomes most difficult. Republicans and Democrats, business leaders large and small, workers, retirees and the common folk all want the same outcome: an end to the recession and a robust economy tomorrow.
The dilemma is how to achieve this. Should we focus on the short term or the long term or both? President Obama has a long-term goal in mind, though he's well aware most of us operate on a two-year cycle that corresponds to our elections - if whatever the crisis is hasn't been resolved in two years, then time for a change in leadership.
President Obama's stimulus initiatives advance loans for small businesses, offer to stem the number of home foreclosures, provide loans to large banks which they will extend to the public, aid the auto industry (to a point), and provide tax breaks for most Americans as an incentive for them to purchase more consumer goods. Aspects of the proposals still are being fleshed out, but the details will draw fire from all sides.
A much anticipated plan to relieve banks of toxic assets is being formalized. Basically, it builds on the original goal of TARP to stabilize banks. Thus far, the president has the public supporting him, although skeptical that the right course of action is being taken.
The president has promised a lot and expectations are high. Like former President Reagan, President Obama has a rhetorical style and personality that resonates with the public.
These attributes enable him to leave the confines of Washington, D.C., to take his message to the public in different states, big cities and small burgs all struggling with the recession.
The psychology of rallying the public works best when he speaks candidly at the gatherings. Don't anticipate photos of Obama on a golf course anytime soon.
John Culver is a retired professor of political science.
He lives in Durango.