An Absence of Leadership 22 comments
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The New York Times has it right this morning. There is an absence of leadership in this country. (See the lead editorial, “Absence of Leadership.")
Over the past six or seven months, I have tried to emphasize two things. First, leadership must begin at the very top of an organization. The leader determines the culture and he or she must project this culture in everything that the leader says or does. My experience in business, government, and the not-for-profit sector is that if there is a leadership void at the top, even though others in the organization attempt to pick up the leadership reins, they cannot completely succeed. This is because there are others that will not go along because there is no one to “hold them in line” if they don’t follow those that are trying to pick up the leadership. Thus, things just aren’t done efficiently or effectively, and morale deteriorates.
Last night, the President referred several times, to what “his” Administration has been trying to do under “his” guidance. Yet, as the Times editorial points out, the whole rescue effort led by Hank Paulson has been highlighted by the fact that the President has been nowhere in sight. The President was pulled out of his bunker last week to speak to the press about the need for a bailout package, but his performance was like a puppet on strings and the voice that came out of his mouth was not his own. (See my September 22, 2008 post.)
Last night, with the entire Congressional effort lagging, the President was pulled out again to tell the American people that the thing we need to fear is fear itself, and if the bailout bill was not passed quickly, Congress, and not the Administration, would be held responsible.
Again, the performance was less than believable, put on by someone that has no credibility. In fact the show looked like a feeble re-run of past claims of impending disaster.
What does the absence of leadership get us?
- It gets us a bailout bill with little or no specifics.
- It gets us a Congress that is not cowered anymore by the idle threats of a lame duck.
- It gets us a nation that is not rallying to the call and is more opposed to the bailout bill, than for it.
- It gets us a brewing class war between the common person on
- It gets us a market that has no idea where to go.
This is the second point I have tried to make: the increase in uncertainty faced by the financial markets. Yes, there are very wide swings in the stock market on a day-by-day basis. Yes, there has been a rush to quality and shorter-term bonds. Yes, lending has dried up. This is what happens to markets that have little, or no idea about what the future holds for them. We get greater and greater volatility!
This, to me, is the bottom line of the current situation: there is little hope that we will get any leadership from the White House and the leadership of the Secretary of the Treasury does not substitute for the leadership of the President. There is a void in terms of “the leader of the people.” Hence, any bailout package that is forthcoming at this time will be less than satisfactory, and I believe that this is an understatement. This will mean continued uncertainty for the financial markets, which can only lead to more volatility surrounding a weakening economy.
I fear that the pain is far from being over.
I guess, what further disturbs me is that I don’t see the candidates for president “stepping up to the plate” to fill the void in leadership. They, of course, have to be careful in what they say with the pending bailout bill before Congress. However, people are claiming that the time is the worst since the Great Depression and that we are heading for a Second Great Depression. They claim that those living have never faced anything like this, and so on and so on. The President says that times could get really, really, bad and the responses we have gotten from our potential “Leader,” sadly, leave us with little confidence that the role will be adequately filled come January 20, 2009.
Financial markets and the economy thrive on confidence and trust. Confidence and trust allow market participants to make projections about the future and then confidently commit on an action plan. Without this confidence and trust, the future looks extremely hazy leading to only a tepid willingness to commit resources to any possible action plan.
The consequence of this, in general, stays as risk free as possible and as short as possible.
People may argue that this is not in the common interest. My answer is that, no, it is not in the common interest but our leaders have brought us to this point.
I bring this same answer to the comment that “unbridled greed” brought us to the chaos that we are now experiencing. The leaders that set the economic policy of this country created the environment that rewarded people for acting in the way they did.
People respond to the incentives that are created by those individuals that determine the culture in which we live. It is always good to refresh one's mind on this point by reading and re-reading “Freakonomics.” It is also good to refresh one's mind to the fact that it is as normal for human beings to respond to ‘negative’ incentives as it is for them to respond to ‘positive’ incentives. For example, see why Sumo wrestlers are like grade school teachers in
Until we get some real leadership at the top in this country, my prediction is to hang on for the swings!
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This article has 22 comments:
Now is the chance for the United States to take a does of tough love, thus ending our "living beyond our means".
This demonstrates that capitalism and free-market economy is worth eating crow over. We can get through this, but government intervention, particularly of the orchestrated "surprise" caliber of recent only makes China stronger.
WE NEED TO LEAD BY EXAMPLE AND SAY NO GOVERNMENT HANDOUTS TO ELITIST BAD BEHAVIOR!
You have it right. Waiting for leadership from this group is like waiting for Godot.
A leader can become a politician, but a politician cannot become a leader. It's hilarious to hear Bazooka Hank speak in terms of battle. Along with policymakers of all stripes, he took his charge ("the economy") into harm's way and turned it broadside to torpedos. If he, and others, understood military leadership they would resign in disgrace. Rest assured, that won't happen. Like good politicians, the Republicrats and Democans will provide cover for each other as election day comes nigh. The public (the sheep) will trudge to the polls and dutifully cast their votes to prevent the other guys from winning (as if it matters, since the two parties are one and the same).
Thomas Jefferson warned us...."Warring against [the principles] of the people,... there is no length to which [the delusion of the people] may not be pushed by a party in possession of the revenues and the legal authorities of the United States, for a short time indeed, but yet long enough to admit much particular mischief. There is no event, therefore, however atrocious which may not be expected." --Thomas Jefferson to Samuel Smith, 1798.
Wake up and look past the panic. More banks are making money than have lost money. Look at USB or WFC.
I think that's enough leadership on this issue from this president.
(Citation: www.washingtonpost.com... )
1. The distribution of the bailout funds must be subject to oversight by a bipartisan committee every step of the way.
2. Every dollar spent to rescue financial institutions must be returned to the American taxpayer when the crisis was over.
3. There would be no golden parachutes for CEOs of failing financial institutions.
4. Help must also be extended to home-owners and ordinary Americans who have fallen victim to the crisis.
All this to protect financials!? The normal investor has had a year to get out of financials and they did, hence the drops. The only "people" in the financials are greedy little investors/hedge funds looking for a quick fit. And they just got it by us gambling with your children's future.
How is anyone in american government supposed to go over to a second and third world country and tell them to receive our funding you have to do as we have in creating our great nation. Free markets, joke. Limited government intervention, lie. Power to the individual versus the government, shame. Well at least we will be able to finally "fit" into the United Nations family. We are of them now.
What country are we now? Not America. Shame on us all. Shame indeed.
Oh by the way, did any of your representatives listen to anything you had to say on this matter? We are Fools. Looking forward to that Carter era inflation.
We will never find leaders if we the people do not deserve them.
Good luck.
Congress just ok'd the $700B bailout along with miscellaneous car loans and student debts al included... talk about promoting bad busienss and TOO BIG TO FAIL mentality..more ike worrying about their own AIG healthcare plans and pensions!!
The federal government should also buy homes, and not securities backed by mortgages, he wrote in a Sept. 23 letter to the U.S. Congress.
“This is a housing value crisis,” Allison wrote. “It does not make economic sense to purchase credit card loans, automobile loans, etc. The government should directly purchase housing assets, not real estate bonds.”
In his letter, Allison questions how the government will pay the proper price for distressed real estate assets. Overpaying will harm taxpayers, while underpaying will hurt real estate markets. He also believes allowing homeowners to use the bankruptcy to restructure their loans will “force losses on banks.”
He adds the primary beneficiaries of the proposed rescue are The Goldman Sachs Group Inc. (NYSE:GS) and Morgan Stanley (NYSE:MS). The U.S. Treasury, he says, is “totally dominated by Wall Street investment bankers,” and “cannot be relied on to objectively assess all the implications of government policy on all financial intermediaries.”
Allison also said it is “inappropriate that the debate is largely being shaped by the financial institutions who made very poor decisions.”
He pins the responsibility for the crisis on Freddie Mac and Fannie Mae.
Winston-Salem, N.C.-based BB&T (Branch Banking & Trust Co.) is a $136 billion banking company with 1,500 branches. Although the company (NYSE:BBT) has been hurt by the slowing real estate markets, it continues to turn a profit. It posted second-quarter net income of $428 million, or 78 cents per diluted share. It made $458 million, or 83 cents per share, in the second quarter of 2007.
Allison is scheduled to retire at the end of the year.
Why were the last two elections a choice between bad and even worse? Given those choices, we have bad in the White House.
In a little over a month, the country will go to the polls and choose between dumb and dumber. I can already tell you that dumb will win, and he will be a terrible leader.
I have absolutely no idea if Colin Powell would have made a good leader or not. He seemed to do a fine job in the military, but the instant someone suggested he might run for president, the press started digging through his *wife's* medical records.
Was Clinton a good president? I am not sure -- but I do know he had sex with all sorts of women besides his wife.
Will McCain / Palin be good leaders? Thanks to the news folks, we know one guy was in a POW camp decades ago, and the other one likes to shoot moose. We still don't know if either of them know how to lead.
Obama / Biden? Well, his mom may or may not be a rebel / anarchist and hate whities. His preacher says some pretty stupid and inflamatory things. Obama is really good at making soaring speeches without any specifics. We still don't know about the candidate's leadership abilities.
People run for President and all we want to know is who they had sex with and what extra curricular activities they participate in that might alienate a special interest group.
Mr Mason dribbles on for many paragraphs saying that Bush has been completely devoid of any leadership ability -- but in the exact same article he blames Bush for every single wrong that ever happened in the last 7-8 years.
Some of the problems were already in place before Bush even decided to run, while others are a reflection of his **BAD** leadership. Mr Mason is too lazy to differentiate.
The GSEs (Fannie and Freddie) were destroyed by Franklin Raines (a Democrat) and his counterpart at Freddie. They took sleepy little mortgage insurance companies and turned them into over levered hedge funds invested in subprime garbage.
The ^*(& may have hit the fan on Bush's watch, but the problem was very clearly caused by someone else acting *during* Clinton's watch. I don't even know if its proper to blame Clinton for Raines crimes.
But lazy foolish "commentators" like Mr Mason judge every politician using his powers of ADD. Absolultely no effort to find the real problem, just blame the opposing political party for everything.
Why would someone with actual leadership skills want to jump into this mess? Freedom of the press guarantees Mr Mason's right to make unsubstantiated partisan accusations without any consequence to himself.
It should not surprise anyone that the smartest people don't want any part of the media circus. Leaders have to have thick skin -- but they should not be subjected to never ending libel.
We have the leaders we deserve
The next 4 years will seem like an eternity. Yes, we are in for one long nightmare. Best investment in the market may be brewers and distillers. Better yet, skip the stock and just buy the product.
the glassy eyed unfocused look on our maximum leader's face these days is very similar to the dazed appearance when (in the schoolroom) he was confronted with the news of the 9/11 attacks.
> jack
All I see is the "selfishness of bureaucrats (A. Lincoln)".
Dumb & dumber?
after they're elected you can't tell them apart.
My question to John Mason is - what in the system is causing this drought of leadership?
Suggestions:
(1) the media presents opinion & slant without reliable factual documentation leaving the public unable to make informed decisions
(2) getting and staying elected is so expensive that politicians no longer can afford to be statesmen
I don't know the answer, but the country has slipped badly (and the next four years look worse) - we need answers.