Afterthoughts on the Election

Now that the election is history, I want to review some of my previous hypotheses to see how they worked out in practice.

Politics is a boon to executive coaching. It provides a large and open laboratory where upcoming, and even seasoned, executives, can go to school.

If you follow this blog you know that I believe that good leadership must be based on clearly-defined policies. Policies define actions; they define actions down the chain of command. They must be intelligible and workable. Otherwise, no leadership.

I also suggested that people will vote for a candidate whose policies are clear and wrong over one whose policies are obscure and correct.

I believe that the election bears this out. Obama was always on message. He told us exactly what he was going to do as president. McCain was rarely on message; his campaign was inefficient, ineffective, and filled with psychodrama.

Where Obama told us he was going to lower taxes for the vast majority of the populace, that he wanted to build more windmills and solar power plants, that he will make nice with friends and enemies alike, and that he will spend more money on rescues, bailouts, and handouts.

Now, what was McCain's message. According to his ads, it was: Obama was not ready to lead. That, my friends, is not a policy; it did not tell us what a President McCain would do in office.

That is why John McCain is returning to the Senate.

If this feels trite, consider that the eminent political consultant, Dick Morris, predicted that a series of last-minute ads connecting Obama with Jeremiah Wright would tip the election toward McCain.

Of course, this same Dick Morris insisted that McCain's histrionic gesture of suspending his campaign to return to Washington to provide leadership in the financial crisis was a great idea.

Most sentient individuals believe that that gesture doomed McCain's candidacy.

Now I would add that Obama also took control of the narrative about the financial crisis. Policy and narrative are not the same thing. The first tells what you are going to do; the second tries to explain what went wrong in the past.

While Obama offered his view that the crisis was a verdict on Bush administration policies, John McCain offered a populist narrative blaming Wall Street and Congressional earmarks. His narrative did not comprise the scope of the problem; thus it fell flat.

Life is not a narrative. Yet, in time of crisis, when we endure trauma, when our routines are interrupted, we use stories to provide a semblance of meaning. Stories bridge the time before we can return to our normal life rhythms.

We should not get too carried away with narratives, especially the one that has currently captured the imagination of the world. In that one, the world has been changed by the Obama victory because his own personal story, within the context of the American narrative about race, has a transcendent quality that will inspire and elevate us, while healing and saving the world.

So we have two competing perspectives: narrative and policy. Is the world going to feel uplifted by the Obama narrative or is it going to pass a different judgment on the Obama policy prescriptions.

Clear policies do attract votes, but they are subject to another judgment. Not the judgment of the public opinion polls, but of the marketplace.

As readers of this blog know I have been suggesting that the stock market crash that began in late September was discounting an Obama victory. It coincided directly with Obama's ascendancy in the polls.

For those who did not believe that there was any correlation, the markets have sent an even stronger message these past few days. On the two days after the Obama election the Dow threw down the gauntlet. It took Obama at his word and gave a vote of no-confidence in his economic agenda.

It is a good time to recall the early days of the Clinton administration. At that time, Robert Rubin explained to Bill Clinton that his fiscal policies were going to be judged ultimately by the bond market. To which we should add.... the stock market, the commodity exchanges, and the foreign exchange markets.

No politician can paper over the verdict of reality with soaring rhetoric. In the battle between narratives and the market, the markets, being real, will always win out.

The question we are now facing is this: will Obama understand the vote of no-confidence he has just received and change fiscal course? The world awaits his decision.