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Turnover at the White House and a Crisis of Confidence

By Elvin Lim

The Obama White House has announced a series of personnel changes in recent weeks, ahead of the November elections. The aim is to push the reset button, but not to time it as if the button was plunged at the same time that voters signal their repudiation on election day. But the headline is the same as that of the Carter cabinet reshuffle in 1979: there is a crisis of confidence in the Oval Office.

The process this year has been more gradual but equally insistent. Two weeks ago, White House Senior Advisor David Axelrod announced his plan to leave the White House in early 2011. Last week, Rahm Emmanuel stepped down as Chief of Staff to pursue his political ambitions in the mayorship of Chicago. This week, we learned that National Security Advisor James Jones would be stepping down and replaced by his deputy, Tom Donilon. (Earlier this summer, Robert Gates had already registered his intention to leave in 2011.)

The biggest reshuffle has occurred for the economic advisors. Before year’s end, chief economic advisor Lawrence Summers will be out. Meanwhile, White House budget director Peter Orszag and White House Council of Economic Advisers chairwoman Christina Romer have already left the administration. That means three of the top four economic advisors will be out by the end of the year, registering perhaps, the president’s general sense that he really needs to up his game on managing the economy and his particular desire to mend fences with (and via a few strategic appointments from) Wall Street.

There is much truth, then, to the Republican taunt that this is an administration in turmoil. This is a lot more change we are seeing compared to the Bush White House two years in. Chief of Staff Andrew Card stayed on for 6 grueling years; Condi Rice stayed on as national security advisor till 2005 before she moved to State; and even the highly unpopular Donald Rumsfeld lasted till 2006 despite constant calls for his resignation.

The contrast between this and the last White House highlights two profiles in presidential confidence. Bush may have been populist in style, but he stuck to his guns, whether it came to war in Iraq or his management of the White House. The irony is that while Bush was unapologetic about Iraq and Rumsfeld until at least 2006, Obama is already practically apologizing about stimulus spending and health-care reform.

Doubt is a good thing in the classroom, but it does not work in a boardroom or in the White House. If Barack Obama does not believe that government spending will stimulate the economy, then it won’t. Consider the Keynesian multiplier – the idea that every dollar spent by the government becomes income to some consumer who then spends a portion of it. This, in return, becomes income to another consumer who again spends a portion of it. This process is reiterated several times, and the sum of its effects is called the Keynesian multiplier.

Why hasn’t stimulus spending worked, as some argued it did during the Great Depression? Well, maybe Keynes and Hicks were just wrong. Or maybe, according to George Akerlof and Robert Shiller, the missing link this time is the “confidence multiplier” (or the fact that “stimulus spending” have become foul words.) Consumers hold back spending if they are not sure if government spending (i.e. deficits) can continue indefinitely, and even if they wanted to spend, banks are withholding credit because they are not sure if government would be in a position to bail them out when creditors default. Yes, confidence is grounded in real-world conditions such as the size of the US public debt. But confidence is also grounded in raw animal spirits. Myths as real or unreal as the dreams of our presidents.

If Obama lacks faith in his advisors, it must be because he lacks faith, ultimately, in himself. His faith in his proposed solutions to our economic and health-care problems has proven to be tentative because he has been quick to back down. Whereas George Bush dug his heels in and kept a poker-face when challenged, Obama volunteers to change his hand.

If leadership is the audacity of hope, and audacity is the capacity to hope against hope, then as Barack Obama buckles under the pressure of less than instantaneous results in his young administration, he may do well to meditate on his own campaign literature. There can only be as much change as that which the president himself ultimately believes in.

Elvin Lim is Assistant Professor of Government at Wesleyan University and author of The Anti-intellectual Presidency, which draws on interviews with more than 40 presidential speechwriters to investigate this relentless qualitative decline, over the course of 200 years, in our presidents’ ability to communicate with the public. He also blogs at www.elvinlim.com. Read Lim’s previous OUPblogs here.

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