Obama's message machine hummed like a Corvette (prior to GM's collapse) through the campaign and into the first six weeks of his Presidency. But when the public blew a gasket over AIG's plans to award misfits with bonuses, the administration appeared to be backtracking. As a result, today's storylines characterize the administration as out of sync with the public, rather than in control of the situation.
What could have been done differently?
Set Expectations
From his acceptance speech on Election Night through virtually every publicly utterance since, Obama has tried to prepare the public for a prolongue economic slump. Strangely, that kind of perception-shaping was neglected in the case of AIG.
This predicament underscores the importance of setting expectations and releasing bad news on your own terms. We're learning today that the Administration knew about the bonuses for months. It would have spared itself some damage if it had disclosed months ago that 1) the bonuses were planned; 2) it would be legally difficult to derail them; but 3) the administration would do everything it possibly could to outmanuver the lawyers and stop the gluttony at AIG.
Had that transpired, recent stories might be focused on and administration fighting to keep greedy bankers in check, rather than an administration giving greedy bankers a government check.
Practice Message Discipline
Perhaps because it didn't anticipate the intensity of the public wrath against AIG, Obama Administration members exhibited a rare display of mixed messages over the past 48 hours, alternately expressing resignation to the bonuses and determination to undo them. From the NY Times:
Still, the president’s directive to his Treasury secretary to “pursue every legal avenue” against the payments seemed to conflict with statements over the weekend from the Treasury Department and from Lawrence H. Summers, Mr. Obama’s chief economic adviser in the White House, that the Treasury already had reviewed its legal options and concluded the administration had no power to stop the payments .
“We are a country of law,” Mr. Summers said on ABC-TV’s Sunday show. “This Week”:There are contracts. The government cannot just abrogate contracts. Every legal step possible to limit those bonuses is being taken by Secretary Geithner and by the Federal Reserve system,”
Unfortunately, by getting behind the story, today's coverage has focused less on the substance of the President's proclamation than the political expediency that informed it. That threatens the authencity of the message.
With today's statements, Obama may be well on his way to regaining control of the message. But for a day, at least, it appears that the Administration paid a price for bankers run amuck.
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