Is Obama a Weak Leader? April 28, 2009 at 8:12 pm

President Obama has recently declared that the United States is not a Christian nation at war with Islam. He also bowed to the Saudi King, shook hands Hugo Chavez, and promised the world that America would not torture. For this Obama has been criticized as showing weakness, a criticism most famously made by former Vice President Dick Cheney.

Is Cheney right or wrong about Obama? How do you measure political strength, anyways? When I listen to the debate over the strength of Obama’s leadership, I notice that people seem to prefer either masculine or feminine leadership styles. So what is the difference between them?

Lead me, follow me, or get out of my way.
- General George Patton

Masculine leadership is marked by power hierarchies and deference to authority. A masculine leader understands that his followers need strong and decisive leadership, so he is not afraid to exercise his authority through force and intimidation. Defy his leadership and face clear, merciless consequences. Preemptive aggression serves to solidify his dominant place in the pecking order. Masculine leaders have achieved positions of authority by winning battles in direct competition (politically or militarily). At its best, a masculine power structure provides clear lines of authority, accountability, and effective top-down communication. At its worst, masculine leadership is vulnerable to abuses of power and extremely adversarial relationships. You’re either with us or against us.

What does a strong masculine leader do when called upon as a third party to help negotiate a peace deal? His view is quite simple: don’t do the crime if you can’t do the time.

Bush received a lot of criticism when this video footage was released, however I believe this was actually a strong display of masculine leadership. Hezbollah challenged and therefore opened themselves to retribution. From Bush’s powerful position, the idea of doing something to end the conflict didn’t even warrant a pause in his meal. (It can be argued that Bush did not hold Israel accountable in the same way that he condemned the violence from Hezbollah, but that is beyond the scope of this article.)

Commentator Bill O’Reilly is a pretty accurate example of masculine-style dominance. Regardless of your opinion about him, the man is trained to detect any sign of weakness and pounce upon it. Listen to his interpretation of this exchange between Obama and Hugo Chavez.

Empathy is the biggest negotiation tool. I must try to understand where the other person’s coming from to make points for my side.
-Lee Ducat

Feminine leadership seeks group cohesion and actively builds consensus. A feminine leader recognizes the power of unity and inclusiveness, and her strong communication skills make her an attractive leader. In negotiations, she understands the other side and finds win-win solutions. Feminine leaders come to power by dissolving the competition as opposed to beating the competition. At its best, feminine leadership allows all parties to feel that their voices matter, and therefore have a shared investment in a common outcome. At its worst, feminine leadership is overly accommodating in its attempts to build alliances.

Now let’s contrast these leadership styles with the opposite end of the power spectrum, again through the masculine/feminine voices.

The masculine-submissive type has resigned to the fact that he is not in charge. He avoids conflict because he usually winds up on the losing end. He’s bitter that nice guys finish last, but finds some comfort in being the nice guy who always does what he’s told. He might advocate pacifism and world peace based on his fear of losing the conflict.

The feminine-submissive type seeks to reduce conflict and avoid confrontation by downplaying her own interests. If people are upset with her, she assumes it’s her fault and does what she can to appease them. This style can be summed up as blaming America first.

In light of these distinctions, what type of leadership do you think President Obama embodies? If you say that Obama is a weak leader, please explain what you mean. Do you believe that Obama’s feminine leadership qualities are ineffective, or are you saying that he fails at being a cowboy-style leader? It’s fair and helpful to debate the merits of masculine vs. feminine leadership, but don’t simply equate feminine leadership with weak leadership. Perhaps, as in love, the most effective leaders utilize the best of both worlds while minimizing the shortcomings of both.

The challenge of leadership is to be strong, but not rude; be kind, but not weak; be bold, but not bully; be thoughtful, but not lazy; be humble, but not timid; be proud, but not arrogant; have humor, but without folly.
-Jim Rohn

Tea Party Protest Misses Opportunity: Bailouts April 18, 2009 at 11:29 am

Here’s where I think the tea parties really missed a huge opportunity: bailouts. I heard a lot of talk about wasteful spending, skyrocketing debt, and unjust taxes; I didn’t hear much about the gigantic sums of taxpayer money going straight to failed banks run by highly questionable CEOs. Oh, and good luck getting any details on what all that bailout money is being used for.

Why doesn’t this piss you off? This is why some on the Left suspect sinister theories that the Wall St. elites are secretly using your tea party protests to divert attention away from the sweet deal that they’re getting. (For the record, I don’t believe this in the strict sense. However I do think that they egg you on from the background, like a coward tries to instigate a fight in order to avoid getting in one himself.)

At least with the stimulus bills, we’re getting concrete things that will directly improve our quality of life. I’m positive that some politicians used it as an opportunity to return favors and fund prestige projects, but by and large that was not the case. Unemployment benefits and health services help us regular folks. I’m not so sure about this steaming pile of bailouts, bonuses, and plans to buy up toxic assets.

Are conservatives afraid to protest the crooks in the private sector? Don’t wanna seem too Ralph Naderish? Members of government and private industry are both tainted in this economic crisis.  So let’s reform government (Treasury, Dodd, etc.) and reform financial regulations. And let’s decide whether we’re going to force these banks to reform (As in resigning executives, deconsolidation) or let them fail. No more half-steppin. I’d like to think that, for all that we’ve lost in this recession, we’ve at least purchased the knowledge to prevent it from happening again.

The Baseline Scenario is a source I trust for unbiased information about the economy.

Do Tax Cuts Really Create Jobs? March 5, 2009 at 11:07 am

Context: I feel the need to examine the claim that tax cuts will stimulate job creation and/or prevent job losses in the US. There is a heated partisan debate in Washington about how to stimulate the economy and prevent a severe depression. Conservatives have been very critical of the liberal solution: massive government spending and a tax increase on the wealthy.  The Republican solution: reduce spending and cut taxes, especially the taxes of wealthy business owners and investors who (presumably) create jobs/wealth.

Tax cuts create jobs in a recession?

Disclaimer: I’m speaking in general terms here without getting too bogged down in details. I’m not a business expert or economist. Just a regular person willing to put in the effort to understand. I did take an undergraduate course in the philosophy of economics, so it may get a little geeky here.

My Premises: (1) The clear purpose of business is to profit. (2) The government has an active role in both encouraging economic growth/productivity and keeping unemployment low. (3) Government must balance the interests of business and labor, producers and consumers.

My Perspective: The statement that tax cuts create jobs is misleading.

First, I accept that some strategic tax cuts will stimulate economic growth. The rationale is simple enough; the more income that businesses get to keep, the more money they will have to expand and employ more Americans. Cut taxes and there will be more (taxable) money circulating in the economy. Eventually you will see greater tax revenue from booming business and the workers they employ. If a business owner or corporation is required to pay higher taxes, then that could lead to layoffs, salary cuts, or consumer price increases – all of which hurt the middle and lower class to boot. Looks a lot like big government getting in the way of prosperity. Keep in mind that this argument loses its effectiveness if the tax rate is already relatively low, e.g. an increase from 5% tax rate to 6% does not carry the same effect as an increase from 30% tax rate to 50%.

Here’s where it get’s sketchy: Just because a company can create more jobs doesn’t mean it will or even should. The purpose of business is to earn profit (premise 1) not to create jobs. From the business perspective, job creation is a means to an end and not an end in itself.

So let’s say we give a generous tax cut to the top earners, mostly business owners and investors. That additional money can be used (or not used) on any number of things. In this poor economic climate, many businesses will just be using those tax savings to pad their losses or meet their earnings projections. CEOs are under enormous pressure to make their companies profitable and that often involves cutting jobs, outsourcing, automation, and increasing employee workload. Especially since our country faces an uncertain future, I would fully understand the business decision to simply pocket the extra money and continue streamlining operations. Likewise, investors will not be rushing to put their money back into the market just because they now have more money from their tax cut; only when the market conditions are favorable will trading and investing pick up.

Rich people are rich for a reason. They make consistent decisions according to a clear objective: make money. Businesses don’t need a tax break as incentive to grow and expand. Growth and profit are in the DNA of every strong company. But they will do it on their own terms unless forced to do otherwise or offered a deal they can’t refuse (tax cuts with conditions).

From the government perspective, (assuming that government does in fact represent the will of the people) job creation is an end in itself. Meaning that Americans believe that this is the Land of Opportunity and jobs should be available for those willing to learn skills and work their asses off. If we expect the government to represent both business interests and worker interests, then it needs to assert itself in some direct way to stimulate job creation. Tax cuts alone will not persuade a company to hire more workers. Only the bottom line will convince them. Employing American workers is expensive.

Tax cuts may help boost the overall wealth in this country, but is it worth it if all the additional wealth goes to those who need it least? Would it still be worth it if the rest of Americans were worse off for it?

The Bush-era (2000-2008) of deregulation and upper class tax cuts appears to be a Kaldor-Hicks move: the overall US economy (GDP) grew, the number of jobs increased but at a slower rate, and the wealthiest 1% of Americans were the ones who were rewarded. The middle and lower class are actually worse off on average now, with (inflation-adjusted) salaries staying about the same while the cost of living rose.

The claim that tax cuts for the wealthy will stimulate job creation is badly oversimplified. Will some jobs be created as a result? I’m sure of it. But I believe the real impact of tax cuts is widely misunderstood and exaggerated in both directions.

Sources I used to write this post:

New Data Show Extraordinary Jump in Income Concentration in 2004, Revised 10/13/06

HISTORICAL EMPLOYMENT: B-1. Employees on nonfarm payrolls by major industry sector, 1959 to date

Wikipedia: Household income in the United States

U.S. Department of Commerce, Bureau of Economic Analysis: Table 1.1.6. Real Gross Domestic Product, Chained Dollars and Table 1.7.5. Relation of Gross Domestic Product, Gross National Product, Net National Product, National Income, and Personal Income

Decision Making and Leadership in the Economy February 20, 2009 at 3:41 am

Now that the world has accepted that we are in a serious economic recession, we’ve moved on to the tougher step of what to do about it. President Obama has emphasized the need for fast government intervention to prevent a total economic collapse. In his public statements, Obama seemed willing to negotiate the content and size of the American Recovery and Reinvestment Act, but it was clear that a swift passage of the plan was not negotiable.

Some Republicans opposed the plan altogether. These folks fixate on the partial truth that free markets are self-correcting. When you are sick, your body has the ability to heal itself. Government interference would have “unintended consequences” that could harm the economy even further by upsetting its natural course, or at best would be a huge waste of taxpayer money. This is a reasonable argument that is marketed to voters in an unreasonable way: “government-based solution = socialism”.

To move the discussion forward, Obama firmly rejected this view largely (if not completely) out of pragmatism. When you are sick, you can boost your body’s ability to heal itself. We have many brilliant minds at work researching ways to manipulate the economy; now is the time to use them. Doing something is better than doing nothing.

By dismissing the do-nothing subset of Republicans right away, Obama effectively pushed the decision making process forward. He made clear that the rejection was a matter of their argument’s merit and evidence. It was a dispassionate (in the academic sense) response that must have stirred a strong emotional response within the gut of many hardcore free market capitalists. As we saw in the 2008 elections, the rhetoric of anti-socialism still invokes strong emotions among many Americans. I believe that there was potential to throw the stimulus plan completely off the rails, and we would be watching the business cycle turn into a death spiral while social cohesion wears thin. I thought President Obama was charitable and decisive in how he handled this segment of the Republican Party, projecting both an open mind and the confidence to be “the decider.” Doing nothing requires no courage and always leaves you with somebody else to blame.

Here’s the video of President Obama’s first press conference that informed this post, in particular his comments at 10:10 of the video. Bonus fun: replace the words “a hat” with “my ass” at 11:45.