The State of the Head of State

America watched as the economy collapsed at the end of the Bush administration – millions lost their jobs, millions lost at least half of what they had saved over all the years, millions lost their homes, and then things slowly got better, except that “better” had to be redefined. The government bailed out the banks to the tune of seven hundred billion dollars, except some had to fail and only five or six of the biggest were left standing, bigger than ever. They ate up all the weaker banks, although that’s politely put as consolidation, and that means that now, with so few of them left, they really are far too big to fail. Those left standing, however, are making money hand over fist again, and finding ways to do just what they had done before – selling each other complex bundles of hypothetical assets of indeterminate value. There’s a lot of money in that, far more than can be made lending money to businesses seeking to expand or folks wanting to buy that first house, no matter how qualified the applicant. The banks aren’t dumb – this is a simple return-on-investment calculation. A thirty-year mortgage is a low-yield affair. So is a business loan. Their shareholders expect a big profit, and they’re getting those big profits again. The lawsuits about the banks’ deception and fraud four or five years ago are a bit of a bother, but a manageable expense, if they can make enough money now. They’re covering the costs of being bad boys back then by making a bundle now. And no one has to go to jail. It’s all corporate liability, not personal liability, so we’ve reached a new equilibrium. Small businesses and would-be homeowners know that even with sterling credit ratings, and verified revenue streams or verified steady income, and low interest rates they can afford, banks aren’t going to lend them that money. Why would they? They have better uses for it. That’s the way things are now, and how they will probably remain.

It’s the same with the stock market, which reaches new highs every week or so. Those who can afford to play, as traders not investors, can make a bundle in the flash market, where millions of shares of this and that trade hands in microseconds, if your massive computer system has the right algorithms. That’s about seventy percent of all trading now. The other thirty percent are investors, wealthy individuals and pension funds and mutual funds, who think that Acme Widgets is well run and something they might want to hold onto for a year or two, as it grows. Neither has much to do with ordinary folks, who are just scraping by. Those who have a 401(k) simply hope for the best – someone else is managing their investments. It’s just that all the action is in flash trading, not in long-term investment in anything in particular. Long-term investment is almost quaint now, even if the markets continue to rise and that 401(k) grows slowly but steadily, for now – so we’ve reached a new equilibrium there too. The stock market isn’t what it used to be, and will never be what it used to be ever again. Investment is now a side-business there.

In both cases things got better – there was a recovery that’s there for everyone to see – but it’s one that few feel. Corporate profits are at record highs too – Apple and others are sitting on hundreds of billions in cold hard cash they have no way to spend – but few are hiring. The Federal Reserve has spent years doing their quantitative easing thing – buying up all the leftover toxic assets from the crash by essentially printing money, keeping the economy afloat by injecting fifty billion dollars or so into the money supply each month, so things don’t seize up – but the Republicans have countered that with years of winning all the battles over whether austerity is the best fiscal policy. That means they’ve blocked what stimulus efforts they could, and made sure the government spends as little as possible on infrastructure and other investments in the future, and as little as possible on the safety net that keeps the unlucky from total disaster. Government employment at the local and state and federal levels is now at record lows, and of course government spending is now meager, given their victory with the sequester arrangement – an across the board ten-percent cut in all government spending of any kind, with no exceptions. That means that there are fewer and fewer jobs out there, because in spite of what they say, government jobs are actually jobs, as are jobs created by government contracts to do useful things.

In this case we’ve reached another new equilibrium. The efforts of the Federal Reserve to goose the economy, through monetary policy, have been perfectly offset by the efforts of the Republicans to smother the economy, on the general idea that if the government just stopped doing things, an unregulated free market would take care of all our problems, if left to its own devices. We tried that in the Bush years and it didn’t work, to say the least, but that’s their story and they’re sticking to it – and their fiscal policy precisely counters the Fed’s monetary policy – a stalemate. Either way, there are few jobs out there. We’d better get used to it.

We are getting used to it. Everyone keeps saying there are three people seeking work for every one job out there, on average, but that’s getting old. That’s how it is now. We also have more long-term unemployed than at any time since the war with Hitler and Tojo ended, but that now seems a given. No one is going to hire a fifty-eight-year-old electrical engineer these days, after his job was shipped to Asia or wherever. Age is a factor, as is globalization, as is automation. We simply need fewer and fewer workers. Even recent college graduates can’t find work, and no one’s going to law school anymore, although a world with fewer lawyers might be nice. Still, this new world is pretty dismal. The overall unemployment rate keeps dropping a tiny bit now and then, but the workforce participation rate is at an almost forty-year low – the highest number of those who have just dropped out of the labor market entirely, just giving up on the whole thing, than we’ve seen in a long time, or ever. That’s why the unemployment rate keeps dropping. Those folks aren’t unemployed, as such. They gave up. Will any of this get better? That’s unlikely. That’s the way things are now, and how they will probably remain.

That means that few remember what a job interview is like, with those questions that make your ass twitch. What is your greatest weakness? What is your greatest strength? How do you handle a challenge? Describe a decision you made that was unpopular and how you handled implementing it. Tell me about yourself.

Don’t worry. The interviewer expects bullshit and knows you’ve rehearsed your answers to such things. You’ll be judged on whether your bullshit that day is vaguely plausible and entertaining – the interviewer just wants to get a sense of how you handle yourself, particularly under stress. The decision to hire you was already made, or not, days ago, and this is just an exercise to confirm that judgment. Dress well, be polite, look alert and interested, don’t fart or pick your nose, say something appropriately acceptable, and you’ll be fine. Only a very few will now ever face an interview like this ever again, but that’s the general idea.

It’s different for politicians. Their whole life is one long job interview, trying to convince the public that they’re vaguely plausible and entertaining, and know the right bullshit answers about their greatest strength and greatest weakness and all the rest. Everyone also knows they’ve rehearsed their answers, which mean little in and of themselves. It’s all in the attitude they display, and that’s why it’s interesting to see that David Remnick, the editor at New Yorker, snagged a long interview with President Obama, Going the Distance:

On the Sunday afternoon before Thanksgiving, Barack Obama sat in the office cabin of Air Force One wearing a look of heavy-lidded annoyance. The Affordable Care Act, his signature domestic achievement and, for all its limitations, the most ambitious social legislation since the Great Society, half a century ago, was in jeopardy. His approval rating was down to forty per cent – lower than George W. Bush’s in December of 2005, when Bush admitted that the decision to invade Iraq had been based on intelligence that “turned out to be wrong.” Also, Obama said thickly, “I’ve got a fat lip.”

That morning, while playing basketball at FBI headquarters, Obama went up for a rebound and came down empty-handed; he got, instead, the sort of humbling reserved for middle-aged men who stubbornly refuse the transition to the elliptical machine and Gentle Healing Yoga. This had happened before. In 2010, after taking a self-described “shellacking” in the midterm elections, Obama caught an elbow in the mouth while playing ball at Fort McNair. He wound up with a dozen stitches. …

This time, the injury was slighter and no assailant was named – “I think it was the ball,” Obama said – but the President needed little assistance in divining the metaphor in this latest insult to his person. The pundits were declaring 2013 the worst year of his Presidency. The Republicans had been sniping at Obamacare since its passage, nearly four years earlier, and HealthCare.gov, a Web site that was under-tested and overmatched, was a gift to them. There were other beribboned boxes under the tree: Edward Snowden’s revelations about the National Security Agency; the failure to get anything passed on gun control or immigration reform; the unseemly waffling over whether the Egyptian coup was a coup; the solidifying wisdom in Washington that the President was “disengaged,” allergic to the forensic and seductive arts of political persuasion. The congressional Republicans quashed nearly all legislation as a matter of principle and shut down the government for sixteen days, before relenting out of sheer tactical confusion and embarrassment – and yet it was the President’s miseries that dominated the year-end summations.

That’s the opening, and you can see this is more narrative than straight interview, but it serves the same purpose, to confirm or not confirm a hiring decision that had already been made, in two elections. Things had turned very sour for most Americans just before he took office, and got no better, and he himself had had a very bad year. Describe a decision you made that was unpopular and how you handled implementing it? He could describe every day of his presidency. That’s the job.

The only question is the plausibility of his answers to the standard questions:

“I have strengths and I have weaknesses, like every president, like every person,” he said. “I do think one of my strengths is temperament. I am comfortable with complexity, and I think I’m pretty good at keeping my moral compass while recognizing that I am a product of original sin.”

There are two possible answers to that question. One is that you are deeply passionate about everything, even if you’re wrong at times – because passion is everything, and nothing is ever really that complicated after all. That’s the George Bush answer. Obama gave the other answer – thinking things through and worrying about doing the right thing is everything. There was nothing new here. That confirms America’s hiring decision, or it doesn’t.

As for the dismal economy and inequality and the disappearance of economic opportunity, Obama pointed out his limited capacity to address the issues there:

“The appetite for tax-and-transfer strategies, even among Democrats, much less among independents or Republicans, is probably somewhat limited.” Obama said. “A Marshall Plan for the inner city is not going to get through Congress anytime soon.”

Hey, interviewers do want to know if you understand what just can’t be done. No one wants to hire someone who keeps trying to do the impossible, wasting everyone’s time. That’s also really, really irritating. Maybe this was the best answer to questions about the economy, although Remnick asked Obama about what he must get done before the end of 2016, and Obama said this:

“I will measure myself at the end of my presidency in large part by whether I began the process of rebuilding the middle class and the ladders into the middle class, and reversing the trend toward economic bifurcation in this society.”

That was a careful answer, about beginning a process and reversing a trend – as in a job interview it’s best to show you know your limits. Obama also said that even the greatest presidents – like Abraham Lincoln – understood that:

“Despite being the greatest President, in my mind, in our history, it took another hundred and fifty years before African-Americans had anything approaching formal equality, much less real equality. I think that doesn’t diminish Lincoln’s achievements, but it acknowledges that at the end of the day we’re part of a long-running story. We just try to get our paragraph right.”

Remnick concludes that part of the interview with Obama saying this:

“I just wanted to add one thing to that business about the great-man theory of history. The President of the United States cannot remake our society, and that’s probably a good thing.” Obama then adds, “Not ‘probably’. It’s definitely a good thing.”

The guy doesn’t want things to be exactly as he alone wants them to be. Would you hire this guy? He doesn’t even think much about race, even if his being black might make some difference in how some Americans see his presidency. He just he doesn’t think that has a major overall effect one way or the other:

“There’s no doubt that there are some folks who just really dislike me because they don’t like the idea of a black President,” he said. “Now, the flip side of it is there are some black folks and maybe some white folks who really like me and give me the benefit of the doubt precisely because I’m a black President.”

It doesn’t matter, either way – he’ll just do his job, like continuing to try diplomacy with Iran, not war, as that could bring real stability to the region:

“It would be profoundly in the interest of citizens throughout the region if Sunnis and Shias weren’t intent on killing each other,” Obama said. “And although it would not solve the entire problem, if we were able to get Iran to operate in a responsible fashion – not funding terrorist organizations, not trying to stir up sectarian discontent in other countries, and not developing a nuclear weapon – you could see an equilibrium developing between Sunni, or predominantly Sunni, Gulf states and Iran in which there’s competition, perhaps suspicion, but not an active or proxy warfare.”

Obama said he feels confident that he has made the right decisions on Syria, have Assad get rid of his chemical weapons but not moving to rid Syria of Assad, although he admitted he is “haunted by what’s happened” there. One the other hand, ridding Syria of Assad has its problems – “It is very difficult to imagine a scenario in which our involvement in Syria would have led to a better outcome, short of us being willing to undertake an effort in size and scope similar to what we did in Iraq.”

There’s also that other matter over there. Obama defended his strategy of using drones to kill terrorism suspects there, and elsewhere, but said his “preference” remains to capture and prosecute them. But if that proves infeasible, “I cannot stand by and do nothing.” We just need to be more careful – “What I’ve tried to do is to tighten the process so much and limit the risks of civilian casualties so much that we have the least fallout from those actions. But it’s not perfect.”

The job candidate recognizes complexity, but also recognizes the need for action in the face of complexity. Would you hire him?

That’s just a taste of the New Yorker interview – it’s over seventeen thousand words long – and others will find what jumps out at them, like the folks at ThinkProgress finding this:

President Obama said pot is no more dangerous than alcohol – and that marijuana legalization in Colorado and Washington state is an “important” move towards a more just legal system. “I smoked pot as a kid, and I view it as a bad habit and a vice, not very different from the cigarettes that I smoked as a young person up through a big chunk of my adult life,” Obama told reporter David Remnick. “I don’t think it is more dangerous than alcohol.” In fact, the president went on to admit pot was actually less dangerous “in terms of its impact on the individual consumer.”

Obama also dived into the vastly disproportionate effect marijuana arrests and incarcerations have on non-white Americans. “Middle-class kids don’t get locked up for smoking pot, and poor kids do,” he said. “And African-American kids and Latino kids are more likely to be poor and less likely to have the resources and the support to avoid unduly harsh penalties.”

That might be important to some, or others might find this appealing:

President Obama doesn’t have a son, but if he did, he wouldn’t let him play pro football. The president disclosed that fact in the latest issue of the New Yorker, where he also compared playing football to smoking.

“I would not let my son play pro football,” Obama said. It’s important to point out that Obama said pro football, meaning there’s a chance he’d let his son play Pop Warner football.

Okay, fine, if one has to choose between teaching kids about manliness and the risk of permanent brain damage, we know where he stands. He’s not in favor of brain damage. Is he against manliness? The folks at Fox News will get around to discussing that soon enough.

There will be more. At the moment, this Remnick item has be out there for only one day, and it is damned long, so there’s much more that many will find outrageous or comforting, but it’s really a job-interview kind of thing. America has settled into an awful new equilibrium of misery for very many and all sorts of goodies for a very few, and see that as how things will be from now on. It could be that Obama is to blame for that, but that’s unlikely. He’s just the guy sort of in charge now. Did we hire the right fellow? A late job interview is better than none. Few people, if any, get those these days.

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About Alan

The editor is a former systems manager for a large California-based HMO, and a former senior systems manager for Northrop, Hughes-Raytheon, Computer Sciences Corporation, Perot Systems and other such organizations. One position was managing the financial and payroll systems for a large hospital chain. And somewhere in there was a two-year stint in Canada running the systems shop at a General Motors locomotive factory - in London, Ontario. That explains Canadian matters scattered through these pages. Otherwise, think large-scale HR, payroll, financial and manufacturing systems. A résumé is available if you wish. The editor has a graduate degree in Eighteenth-Century British Literature from Duke University where he was a National Woodrow Wilson Fellow, and taught English and music in upstate New York in the seventies, and then in the early eighties moved to California and left teaching. The editor currently resides in Hollywood California, a block north of the Sunset Strip.
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1 Response to The State of the Head of State

  1. Rick says:

    You nailed it on answering one question I’d had since this Great Recession hit:

    Why, all of a sudden, had banks, who had up to that point never minded loaning all sorts of money to would-be homeowners and small businesses, suddenly stopped lending?

    When they suddenly wouldn’t refinance mortgages to folks who were underwater, weren’t banks just just leaving money on the table? Were they just so set in their ways that they couldn’t find a way out of this mess? Were they, in essence, stupid?

    And your answer (a good one, I think), is no, they’re not stupid — in fact, probably just the opposite. They’re smart enough to know there was no real money in it anymore. There’s better money to be made doing something other than doing what’s good for the country.

    Which suggests a solution. Since the proper role of government can be described as doing what the country needs getting done, but that can’t be accomplished by the free market …

    Well, you can probably see where I’m going with this. Maybe we need the government to step in to somehow persuade banks to make loans that they don’t see as being in their interest, or something else that has the same effect, like government making the loans themselves?

    Maybe not, but we still need to give all of this some serious thought. Otherwise, we risk the country sinking into perpetual dystopia.

    Rick

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