Posted by: dstieglitz | November 28, 2012


Whether you’re pleased or not with the outcome, it’s ironic that the most expensive election in history (over $6 billion) produced no change in leadership: Barack Obama remains as president, Harry Reid (D) and Mitch McConnell (R) still reign in the Senate, and John Boehner (R) and Nancy Pelosi (D) rule the House. The good part is that it’s not a lame duck congress – at least not in the classic definition – and they can immediately begin to address the country’s challenges. It’s appropriate – albeit frightening – that the people who created the fiscal cliff must now eliminate it or jump off together. Is it possible for a status-quo election to change the status quo? Is it possible for a grossly partisan campaign to produce bipartisanship action? Yes – if the men and woman in leadership positions erase the leadership deficit.

No Mandate. Neither party earned a mandate in the election. Quite the contrary, many voters felt the candidates were smaller than the issues facing the country. Disappointment starts with President Obama. Voters generally like him even though he regularly engaged in the partisanship politics he so eloquently chastised in his 2008 campaign. The looming threat of the fiscal cliff requires leaders who are above such tactics. Robert Gates, former Secretary of Defense under Presidents Bush and Obama, said: “The inability of politicians to step outside their ideological cocoon prevents the best ideas from being implemented.” Admiral Michael Mullen, former Chairman, Joint Chiefs of Staff, said: “The gravest threat to United States’ national security is the abundant disorder in its fiscal affairs.” These leaders are describing a burning platform – the economic decline of the United States.

The Burning Platform. To change the mindset of the American people and congress, Obama must describe the burning platform in terms so clear that every American and every special interest group will be eager to sacrifice to avoid it. Romney lost the election because he failed to explain the burning platform to voters and, of course, Obama could not have won on a burning platform. Two years ago, Erskine Bowles and Alan Simpson lead an Obama-appointed commission that developed a plan to dig the U.S. of its economic sinkhole. They told the president and congress to warn the American people that they must pay higher taxes, work longer, expect less in retirement and other benefits, and change from consumption and short-term gratification to investment in lasting social and business infrastructure. Obama and congressional leaders ignored those recommendations but we re-elected them anyway.

Clinton-Bush Apology Tour. To drive the message home in a bipartisan way, former presidents Bill Clinton and George W. Bush should jointly tour the country and apologize in ways that probably would offend their political parties. Bush would concede it was a mistake to reduce taxes and take the country into two unfunded wars. Clinton would apologize for not fixing Social Security and Medicare when he had a golden chance. Bush would dispute Tea-Party Republicans’ claim that even modest tax increases would cause economic ruin. Clinton would condemn Democratic attacks that equate vital Social Security and Medicare changes with demolishing those programs. Obama would cease being the main spokesman for his party’s ideology and together with the former presidents offer a vision for America’s future. Such bold leadership would stimulate lively public debate and shake congress out of its entrenchment.

Give Us a Vision. Most voters would say Romney’s vision for America was to shrink government and repeal Obamacare. That vision lost – but it was clear. Ask people about Obama’s vision and they shrug their shoulders. Investments in infrastructure, education, energy, and research are needed; but they won’t reduce unemployment or improve economic conditions in the short term. The country needs a vision to guide its decisions to:

  • regain the middle-class prosperity of the 1960s
  • share prosperity more evenly and eliminate poverty
  • enable the government to deliver entitlements that it promises
  • implement a rational climate-change policy
  • encourage investors to build new Microsofts, Apples and Amazons

Obama must use the bully pulpit to explain the vision and show the world that the U.S. is putting its finances in order.

Management 101. If congress took Management 101 at any business school, it would fail because it is operating the government without a strategic plan, without a budget, and without metrics for success. Most of us agree the government is failing, but how should we measure its performance:

  • What is a healthy GDP growth rate for the world’s largest economy?
  • What annual deficit and national debt are tolerable?
  • What are appropriate tax rates for each economic class?
  • What should our balance-of-trade be?
  • How much should be spent per-capita on medical care?
  • What is the baseline unemployment rate?

Let’s put numbers on success so congressional leaders and the public can use quantitative objectives as the basis for solutions that everyone supports wholeheartedly.

Leadership Takes Courage. Presidents are not great leaders just because they get elected. To be remembered as great leaders, they must present a vision for the future and confront detractors in congress and special interest groups with Lincoln-like courage. Four years ago we celebrated Obama’s election and hoped that a young, charismatic president would heal partisan divides. Obama’s re-election is less inspiring, but it gives him an opportunity to fill the gaps in his record. Hopefully, he will demonstrate the willingness and courage to resolve issues that he has avoided for four years. Courage isn’t easy in politics because the best course of action isn’t always clear. Effective leaders rise above their craving for popularity and persuade people to acknowledge the necessity for essential but distasteful actions.

So What’s Next? Obama should present his vision to Capitol Hill in the form of a bill – and follow up with bully-pulpit speeches to the American people and business executives. His legislative proposal should frame the issues and present solutions in five areas:

  • Long-term fiscal stability. An easy way would be to endorse the Simpson-Bowles plan which is widely accepted as bipartisan
  • Short-term stimulus. The unemployed need jobs – stimulus is economically and politically appropriate if coupled with a credible long-term fiscal plan
  • Taxes. Increase revenue by broadening the tax base, eliminating deductions, and promoting capital investments that produce jobs
  • Entitlement spending. Make adjustments over several years in how payments are indexed to inflation, the eligibility age and criteria, and taxes that fund the programs
  • Discretionary spending. Shrink the defense budget by ending marginal and irrelevant programs. In civilian areas, shift spending to state and local grants and the private sector

These ideas have been proposed and analyzed countless times, of course, but what has been missing is the presidential leadership to make them happen. Closing the leadership deficit will require courage and action!


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