07 November 2008

Decision elision elects Obama

McCain loses when he shows the content of his characterisation

It's an inspiring and historic thing that America can transcend race and elect a black man to be its president. My residual concern is that however storied this triumph of the great American experiment in democracy may be, they may not have got the right guy for the job.

It is not enough that he is black. He really does need to be good enough too. If America is to live out the true meaning of Martin Luther King's words that a man should be judged, not by the colour of his skin, but by the content of his character, it seems quite possible that America has again chosen poorly.

If McCain had won instead, we might also have had cause to have doubts on this too. I know that the conventional wisdom is that McCain's true mettle for this job was already tempered and battle tested as authentic by his experience as a POW and as a working Senator with a real resume of achievements. How can one not respect and admire this courageous and stalwart individual? But McCain did not deliver on the most highly visible and proximate test that came his way during the campaign: the Bailout.

A true measure for whether a person is fit and proper for this highest of offices is whether they have enough intellect, moral fibre, good judgment and humanity to make difficult and important decisions correctly. By my reckoning neither of these guys measured up in this true test, though Obama deftly ducked the opportunity, so we don't actually know about him yet, even if his evasion is not a good portent.

These thoughts were prompted by an insightful post of Todd Zywicki's at The Volokh Conspiracy entitled "Was the Bailout the Turning Point in the Election?"

Todd Zywicki agrees with Dick Morris:

I agreed with Dick Morris then and agree with him now that if there was a turning point, that was it. Would McCain have won had he followed Morris's advice? My intuition is that it very well might have. That he didn't seize this opportunity, however, might speak to why McCain lost and what it revealed about why he shouldn't be President. He may be a leader and he may be decisive, but that doesn't mean he actually understands what is good or bad policy to be decisive about.

And I agree with Todd. Though from this distance and with my very inferior perceptions of what actually took place in a political campaign in another nation on another continent, my view remains completely derivative and necessarily malleable. Zywicki's and Morris' view does however capture my disappointment with McCain that he didn't take the opportunity as a leader with a grasp of the essential issues and the courage of his convictions to step in and re-fashion Hank Paulsen's legislation and message for the "Bailout". It needed to be focused on and sold as a regulatory adjustment to facilitate the specific task of buying back badly infected securitised housing loan instruments held by institutions, at a deep discount, with the dual intention of injecting liquidity into these financial institutions and the holding of these instruments for re-sale in calmer times at a profit. This was not how it was packaged or marketed. We got some generic mush about giving a discretion to experts in Government to spend $700 billion as and when they saw fit and a clear message that it was too important to sweat any details because of the urgency. As a consequence the world now sees the Bailout solely as a market failure . And it is already being used around the globe to justify all kinds of other government interventions in a similarly generic way in all manner of other areas of life. Authoritarian collectivists thus garner still more irrevocable power to extend their amorphous tentacles into the community and to suck a bit more of the marrow out of individual human freedom.

But, as my posts here at the time show, I too was scared that the system would meltdown, at the time the package was rushed through Congress. And although it seems we have been spared an immediate financial conflagration, the economic and cultural toll has been awful. The prevailing perception has become that the government was required to squander $700 billion of taxpayers' hard earned to keep banks in business. The reality is that there has been a structural adjustment to the way capital adequacy and liquidity in credit markets are going to be maintained in major financial institutions by the regulators for a few years, and that taxpayers money is being used for the very purpose that we have central banks and governments, to keep the essential infrastructure intact and maintained. A true leader could have and should have changed the perception development, so that whilst affirming the role of Government as a protector of community infrastructure, the understanding that people and enterprises need to take responsibility for their own poor pricing decisions needed also to be reinforced. Free markets must allow investment decisions to play out their consequences for the dispassionate force of price discipline to benefit society.

A clearly articulated expression of the specific course required and taken was needed. McCain didn't do this. He took the opportunity, a plus (and more the Obama did) but he failed his own test. He muddled through to a poor outcome driven by other players. It's not enough to want to be in the position to act and to put yourself there. You have to also make the right decision when you get there. He didn't. He was seen not to make a difference. He lost.

But as Todd Zywicki goes on to say:

On the other hand, I'm not sure that the experience told us much about Obama's ability to be President--other than that he was savvy enough to stand back and let McCain drive himself off the cliff. (It is also interesting that Obama coasted when he was elected to the Senate because his opponent self-destructed). Obama did remain cool and above the fray throughout that time. At the same time, one of my biggest concerns at this point is that the flip side of Obama's coolness and desire to form consensus is his possible tendency toward indecisiveness and undue compromise and to avoid being pinned down and taking responsibility for difficult decisions. I'm not sure that his response to the financial crisis provided much insight one way or the other in determining whether he was cool or just indecisive.


Obama has by his clever elisions on this, like so many issues before, reinforced a real suspicion that he has prospered to date simply by not being found out. It seems pretty clear that pretty soon the fawning media will no longer be able to protect him from being tested, and we will see whether or not he is up the task of making hard decisions correctly.

A greater fear however is that he may be so inexperienced in taking responsibility for decisions that he may not even fully appreciate the magnitude of the decisions he must make, and the toll they will take on him. From the little we know of his past it remains possible to project that he might just blithely continue to believe that making compromises that keep his constituency happy, just as he has done as a successful community organiser and campaigning politician, is all that will be required of him.

Surely the searching examination that Obama has undergone from the media and his opponents during this hard fought election campaign has preserved America from electing such a feckless individual to this highest and most powerful office? Yes, we can only hope.

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