Monday, March 23, 2009

Act like adults, please

March 23, 2009

By Thomas L. Friedman

I RAN into an Indian businessman friend last week and he said something to me that really struck a chord: 'This is the first time I've ever visited the United States when I feel like you're acting like an immature democracy.'

You know what he meant: We're in a once-a-century financial crisis, and yet Americans have actually descended into politics worse than usual. There don't seem to be any adults at the top - nobody acting larger than the moment, nobody being impelled by anything deeper than the last news cycle. Instead, Congress is slapping together punitive tax laws overnight like some Banana Republic, the President is getting in trouble cracking jokes on Jay Leno comparing his bowling skills to a Special Olympian, and the opposition party is behaving as if its only priority is to deflate President Barack Obama's popularity.

I saw Mr Eric Cantor, a Republican House leader, on CNBC the other day, and the entire interview consisted of him trying to exploit the AIG situation for partisan gain without one constructive thought. I just kept staring at him and thinking: 'Do you not have kids? Do you not have a pension that you're worried about? Do you live in some gated community where all the banks will be okay, even if the biggest banks go under? Do you think your party automatically wins if the country loses? What are you thinking?'

If you want to guarantee that America becomes a mediocre nation, then just keep vilifying every public figure struggling to find a way out of this crisis who stumbles once - like Treasury Secretary Timothy Geithner or AIG's US$1-a-year (S$1.50-a-year) fill-in CEO, Mr Ed Liddy - and you'll ensure that no capable person enlists in government.

You will ensure that every bank that has taken public money will try to get rid of it as fast it can, so as not to come under scrutiny, even though that would weaken their balance sheets and make them less able to lend money. And you will ensure that we'll never get out of this banking crisis, because the solution depends on getting private money funds to team up with the government to buy up toxic assets - and fund managers are growing terrified of any collaboration with government.

President Obama missed a huge teaching opportunity with AIG. Those bonuses were an outrage. The public's anger was justified. But rather than fanning those flames and letting Congress run riot, the President should have said: 'I'll handle this.'

He should have gone on national TV and had the fireside chat with the country that is long overdue. That's a talk where he lays out exactly how deep the crisis we are in is, exactly how much sacrifice we're all going to have to make to get out of it, and then calls on those AIG brokers - and everyone else who may have gotten bonuses they did not deserve - and tells them that their President is asking them to return their bonuses 'for the sake of the country'.

Had Mr Obama given AIG's American brokers a reputation to live up to, a great national mission to join, I'd bet anything we'd have gotten most of the money back voluntarily. Inspiring conduct has so much more of an impact than coercing it. And it would have elevated the President to where he belongs - above the angry gaggle in Congress.

'There is nothing more powerful than inspirational leadership that unleashes principled behaviour for a great cause,' said Mr Dov Seidman, the CEO of LRN, which helps companies build ethical cultures, and the author of the book How. What makes a company or a government 'sustainable', he added, is not when it adds more coercive rules and regulations to control behaviours. 'It is when its employees or citizens are propelled by values and principles to do the right things, no matter how difficult the situation,' said Mr Seidman. 'Laws tell you what you can do. Values inspire in you what you should do. It's a leader's job to inspire in us those values.'

Right now, we have an absence of inspirational leadership. From business, we hear about institutions too big to fail - no matter how reckless. From bankers, we hear about contracts too sacred to break - no matter how inappropriate. And from our immature elected officials, we hear about how it was all 'the other guy's fault'. I've never talked to more people in one week who told me: 'You know, I listen to the news, and I get really depressed.'

Well, help may finally be on the way: One reason we've been sidetracked talking about bonuses is because the big issue - the real issue - the President's comprehensive plan to remove the toxic assets from ailing banks, which is the key to US economic recovery, has taken a long time to hammer out. So all kinds of lesser issues and clowns have ballooned in importance and only confused people in the vacuum. Hopefully, that plan will be out today, and hopefully the President will pull the country together behind it, and hopefully the lawmakers who have to approve it will remember that this is not a time for politics as usual - and that the United States, alas, is not too big to fail. Hopefully...


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