Monday, July 05, 2010

The Pessimism Bubble

Ross Douthat points out that national moods are contagious:  both euphoria and pessimism can get out of hand and that currently we are suffering a 'pessimism bubble'.  I tend to agree.  This is why it is so essential that our leaders understand that there first and most important job in any recession or other reverse is to buttress and restore confidence.  Indeed the reason for 'stimulus' spending is not the likelihood that it will increase activity by itself but that by showing that the nation's leaders are 'on the job' it will increase optimism that things will get better.

Likewise, when the national leadership does things that increase uncertainty (healthcare, energy policy, taxes) they increase pessimism.  Also damaging is for leadership to do things that destroy confidence in its own ability to cope.  People watching the Obami flail and finger point in the Gulf are not getting the message that the administration is on top of things.  If the executive hadn't become so overmuscled with regulatory and other powers this wouldn't make much difference (the nation didn't freak when McKinley was shot because back then the President had very little say in people's day to day lives).  But now that the President is a demi-God his incompetence is a very real contributor to pessimism.

BHO needs to step back and figure out what he can do to restore the confidence of the American people in the future. If he does that, they might regain confidence in him and give him another term.  Right now?  A vote of no confidence is his fate.

No comments:

Post a Comment