#48 Sorry, but It’s Complicated

On February 24, 2010

Hello Everyone,

As those of you who have been receiving these musings over the past two plus years may have noticed, their frequency has declined since Barack Obama took office. That, in itself, is telling. It’s hard to maintain the intensity of a campaign. It’s hard to be positive. It’s easier to be critical, to find fault. To blame. Counter narratives take hold.

I remain convinced that this president is the right man at the right time. Because, in a word, things are complicated. And President Obama is supremely suited to handle complication.

Since the election, I have increasingly tuned out the media. I have come to recognize the obvious – the shorter the deadline or more frequent the utterance, the less thoughtful it is. The talking heads on “cable news” or “talk radio” cannot possibly have given much consideration to their “instant analysis” – an oxymoron if there ever was one. The quality of instant coffee.

This was driven home for me as my wife, Penny Bender Sebring, and I have experienced the stir caused by a book that was released last month. It was written by Penny and her colleagues from the Consortium on Chicago School Research at the University of Chicago. You may remember I used this forum to shamelessly shill for it at the time of its publication.

Organizing Schools for Improvement was the product of fifteen years of research on Chicago Public Schools. It took several years to write. Its first, and most generalizable, lesson for me is that it takes the ability to assemble and the time and expertise to analyze evidence in order to draw meaningful conclusions. The second, but more specific, lesson is that there are no silver bullets for improving urban schools because it is a very complicated task. The book identifies “5 essential supports” – that are themselves complex that are requisite for improvement.

Which leads me back to President Obama as he confronts the nation’s many challenges. We all must remember – things are complicated. And, there are no silver bullets.

But, we Americans seem to have little interest in grappling with complex problems and even less patience for seriously trying. We seem to want simple answers and quick fixes. I’ve written before about our “culture of impatience” (Obamagram dated 3-12-09) which is now on full display.

These realizations are the primary reason I supported President Obama and still do with equal conviction. He is intellectually capable of dealing with conditions of complexity, nuance, and ambiguity and temperamentally disposed to being appropriately patient. The impetuous see “differing”, I see diligence.

Radical extremism, climate change, energy independence, health care, fiscal deficits, education, and financial regulatory reform, to name a few. These are immensely intricate problems that need sober consideration and long-term solutions. I can think of no one better able to tackle them then our President.

I have also become more aware of a tendency toward hysteria in the media. And, an “absence of proportion” as Steve Edwards recently pointed out. He is the program director at Chicago Public Radio and an Amherst classmate of our son.

Fox has perverted the seemingly noble phrase “fair and balanced” as has the Microsoft/NBC channel known as MSNBC. Even CNN and NPR are not immune. When discussing climate change, for instance, the media airs both sides. But, as snow buries D.C. and climate change skeptics claim it as proof of their position, the media fails to remind us that the “great preponderance” (or some such characterization) of peer-reviewed scientific research has concluded that the earth is warming in part due to man-made factors. Simplicity. Little sense of proportion.

Hourly or daily commentators also have confused simple and frequently superficial correlation with more difficult to prove causation. Something that my sociology and economist friends at the University of Chicago constantly give warning to. Correlation (never called that by the media) is easy to quickly observe; causation requires more evidence, analysis, rigor, and time.

Speaking of social scientists, I attended a presentation last December on the causes of the hyperbolically-described “Great Recession” which was illustrative of my basic point.

The attached presentation was made by economist Robert E. Lucas, Jr., a Nobel laureate at the University of Chicago (of which I’m proud to be a trustee, as many of you know, and where Penny and I spend a disproportionate share of our time). As far as I can tell, he is not a politically-oriented economist like my friend and classmate Joe Stiglitz. While his displays alone cannot do justice to his presentation, and I can’t pretend to either, I’m sure you’ll get his drift.

Despite the simplistic search for the guilty – sub-prime mortgages, greedy bankers and all the rest – Prof. Lucas makes the case that the lynchpin of our financial regulatory system worked admirably for decades after its advent during the Depression. But, for reasons that probably can be traced to the high-inflation period of the 1970’s, that regulatory regime finally proved inadequate over 70 years after the Depression. (You may recall that I suggested that we may be able to trace the origins of our current situation back to the 1950’s in Obamagrams dated 3/12/09 and 6/17/09). This is not simply a George Bush or Barack Obama problem.

The financial system’s ultimate vulnerability could have been triggered by a number of events at various times along the way; it just happens that the mortgage bubble (or more broadly, pervasive and excessive use of leverage throughout the system as discussed in the Obamagram dated 3/12/09) precipitated the crisis.

Prof. Lucas goes on to say that the evidence indicates that the Bush and Obama administrations, the Federal Reserve, and others in government largely reacted sensibly and avoided a calamity. His analysis also points to what we must now do to update our regulatory framework to reduce the probability that there will be a recurrence in the foreseeable future.

I provide Prof. Lucas’ observations as a prime example of how a cool head can deal with immense complexity without resorting to simple-minded hyperbole.

Prof. Lucas’ analysis also reminds me that free markets are like football. Both have many fans, yours truly included, but they both require rules and referees. Otherwise, there’d be mayhem. But, the rules for football have necessarily evolved as players have gotten bigger and faster and as technology has intruded. So, too, must the rules for the markets.

At the start of the campaign, then-Senator Obama told a small group of us that he wouldn’t “dumb things down” for the electorate. I applaud his continued resistance to doing so. I urge all of us to support him in this effort despite incessant calls to the contrary.

Having said all of that, I do think the President could take a lesson from Prof. Lucas and from Drew Faust, who succeeded Larry Summers as the president of Harvard. Both know the importance of narrative – a story that makes sense of events. In the attached New York Times interview, President Faust says “One thing I learned [as a new president] was that people impute all kinds of things to leaders…So communication seemed to me something very important from early on, so that people not have that sense of mystery about what a leader is up to.” President Obama is probably one of the best writers among all of our presidents. He should put those skills to better use to tell the country the story – however complicated it may be – of where he wants to take the country, so the dissenters are less
able to impute things that are untrue. President Faust makes a final salient point. “As a scholar, you don’t want to repeat yourself ever…As a university president, you have to say the same thing over and over and over.” U.S. presidents, too.

I support President Obama. We are fortunate to have him as our leader, especially during this period in our history. He doesn’t need to dumb it down. He just needs to more fully exploit his narrative-making skills to help us make sense of our very complicated times.

I urge patience and perspective. One key perspective – a lower unemployment rate will do wonders for the country’s mood. As I wrote in an Obamagram dated 12/4/09, President Reagan’s “approval ratings” in 1983, when unemployment was nearly 11%, were comparable to President Obama’s today. Correlation or causation? Who knows? I simply suspect that the appeal of the current counter narrative declines in direct proportion to declines in the unemployment rate.

One final note – I’m actually glad that the Democrats lost the illusion of a filibuster-proof majority. As one of my college classmates, who worked for Tip O’Neill, wrote me recently, “It was a myth that we ever had 60 votes; we had 54 and 6 we had to bribe”.

Please pass it on.

Chuck

Charles Ashby Lewis

Managing General Partner
Coach House Capital
calewis@coachhousecapital.com
ObamagramsByLewis
http://obamagrams.com/
2735 Sheridan Road
Evanston, IL 60201
847/864-9615

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adobe pdf file Attachment: The Current U S Recession

 

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