Financial Crisis #3: Presidential politics

Sorry this has come out so late. Today was so busy on this topic that I didn't feel prepared to write this post until now.

Obama

Mostly, the financial crisis will help Obama. He's a member of the Democratic (:-P) party and the president is a Republican. On the face of it anything that goes bad on the other guy's watch helps. So this is bad, it'll likely help Obama. Add to this the polling data that suggests on these sorts of issues the American people tend to trust Democrats more than Republicans and tend to believe that they'd be better stewards of the economy as it benefits every day folks.

All of this has led to Obama erasing McCain's narrow lead and even pulling out to a little one himself. It's still probably within the margins, but when every poll agrees those margins of error are more narrow. Sorry, I'll do a post about polling someday... I swear.

This is still sensitive. This is not a down swing that is unfortunate but doesn't really require any policy to correct. That happened in 1990-2 and again in 2000-3. In both of those cases the fundamental system was not particularly at risk, rather it was just a hiccup on a generally upward trend. Also, both of these slowdowns were just that... slow downs. The economy kept growing, just at a reduced pace. The current financial crisis is more like the 1987 or 1929 episodes, thus there is a requirement for leadership to actually implement policies that reassure the markets and fix the problem before it gets worse. Obama has done this... some, but here McCain has an opportunity.

McCain

After spending a week flailing from one bold and brash policy pronouncement to an opposite bold and brash policy pronouncement John McCain, today, attempted to take the bull by the horns. By going on TV, using the bully pulpit and involving things beyond politics into actually governance he's taken quite a risk. Suddenly, if things really do go bad he has to take the blame. However, he's also demonstrated some things that Obama has not. He's managed to work himself into a position of providing decisive leadership. Often times in crises any answer, right or wrong, is better than no answer at all. McCain has at least gotten off the fence, and I believe he might benefit from it.

McCain is now tied to the successful passage of a bailout plan by Monday. If it works, he'll be lauded, if it doesn't he mine as well pack up and go home on Tuesday.

Leadership

I was disturbed today by Obama's press conference. He deferred to Harry Reid and Pelosi and Paulson and anybody that he could when asked what he thought was the best policy. I'm not sure he realizes that Barack Obama is now the leader of the Democratic party. He's the one who is responsible for advancing an agenda and he would be irresponsible to pass that buck onto someone else's shoulders. It struck me as a particular lack of executive flair that is needed to be successful as a president. If present in too great a quantity it can be a bad quality. Many would point to GW Bush as an example. However, most effective presidents (Washington, Madison, Jackson, Lincoln, Roosevelt, Wilson, Roosevelt, Truman, Reagan are examples) lead from the front and bent the body politic to his way of thinking... I just didn't see that spirit in Obama today and found it disconcerting. It's true that there are examples such as Nixon and Clinton of presidents who were effective without being a particularly good leader, however, Obama's campaign has defined him as an advocate for change if he doesn't have a backbone he'll be another Carter not a Kennedy.

Conclusion

So on balance I think that this entire episode helps Obama. It's mostly structural, he's done nothing particularly to deserve the bounce in the polls but he hasn't done anything to sabotage himself either. He's doing a good job of just keeping the news on an issue that he's naturally at an advantage. If McCain could push the election back onto foreign policy you'd see the same behavior from him. McCain has thrown a bit of a hail marry to try to steal some of Obama's thunder... it might work. We'll just have to see.