I spent a lot of time in the car this weekend, and while driving up I-95 I had the chance to hear Jack Welch speak at a forum hosted by Donna Shalala at the University of Miami. The forum had taken place just a few days before the inauguration, but one of the points that Welch made would seem to hold up just as well now, after Obama has had some time to get settled in office. Welch said that every time Obama addresses the current economic crisis by warning that the worst is yet come -- an expectations-lowering rhetorical device that Obama has frequently deployed -- he spooks the markets and further undermines the confidence of the American people.
It may well be that the worst is yet to come, but the only person who is served by Obama's relentless negativity is Obama. During the election, Obama presented himself as the man capable of telling Americans the hard truths -- and as the candidate who was so in-touch with the American people that he knew precisely what those hard truths were. McCain, on the other hand, got blown out of the water for saying that the fundamentals of the economy were sound even after it had become apparent that the economy was in total meltdown.
Obama's negativity was great politics then, and his continued negativity may also be good politics. The economy is probably not going to bounce right back and Obama doesn't want to have some soundbyte tossed in his face four years from now in which he is seen promising a speedy recovery that four years later has still not materialized. But who else is served by Obama's negativity? The assumption, true or not, is that the President of the United States has access to better information about the economy than the rest of us do. When he goes out and says things are going to get worse, people will believe him. The markets will be spooked, Americans will be a little less confident in their own prospects, and consumers will be a little more reluctant to open their wallets. It's not good for anyone, except Obama.
McCain made a mistake to go out and talk up the underlying strength of the American economy, but the sentiment was correct. McCain was acting presidential, as one of the president's many jobs in a time of crisis is to calm jittery nerves and assure the American people that everything will be okay (even if it might not be). If President Obama wants to put the country's interests ahead of his own, he might take to reassuring the American people, rather than frightening them, about the country's current economic challenges. Or at least that's what Jack Welch suggested.
