Tuesday, July 21, 2009

Continuity or Drift?

The new person in charge often wants to emphasize from their first day on the job that they want to keep things going roughly the way they are. We saw this earlier this year at Yahoo, where the new CEO needed to reassure employees that she wasn’t there to shut the company down or auction it off in pieces. It is also the usual strategy of a new U.S. president. When a president takes office, he needs to nominate hundreds of people for executive, administrative, and diplomatic positions and deliver a budget proposal all within the first few weeks, so it’s not the right time for any sort of soul-searching about changes in direction.

Take this too far, though, and continuity turns into drift. Six months in at Yahoo, the biggest initiative we’ve seen is a home page redesign that looks like it might have been cribbed from AOL in a couple of hours by a summer intern. And when you look at President Obama’s policies, at least when it comes to the economy, they still seem mostly geared toward making his predecessor look good. The “economic stimulus” package was little more than a dressed-up repeat of Bush’s tax rebates of eight months earler — and as we are not in the kind of recession that responds to stimulus, it was no more effective in turning the economy around. Obama’s other headline-grabbing economic initiatives are continuations of measures adopted last year, with nothing important changing. The Wall Street bailout is still going on with every cash transfer that the Treasury sends to the big financial companies in New York. General Motors and Chrysler are still limping along with their futures very much in doubt.

It’s a track record that’s hard to explain, especially when you stop to consider the source of the policies that Obama is so studiously continuing. These are policies that were adopted in an atmosphere of panic by leaders who were in denial and advisors who were unqualified. They were meant as stopgap measures. When the Bush administration agreed to prop up the two failing Detroit automakers, it was supposed to be to give the new administration a chance to do something about them in February — not to have both companies still paralyzed by indecision as we go into August.

The whole strategy of continuity is a stopgap measure in its own right. It’s not supposed to go on for a whole year, unless you are another Gerald Ford, a caretaker executive who is just expected to hold things together until a real leader can be brought in. The U.S. economy is on the brink of depression — after just 3 or 4 million more job losses, some economists will consider it that — and action is needed. When it comes to the economy, the Obama administration seems to be stuck in neutral. The country is correct in expecting more than this from its president.