Feb 18, 2009
OBAMA’S CONFIDENCE STIMULUS
President Obama signed his economic stimulus plan yesterday. It’s the most massive recovery package ever seen. And one of its principal aims is the restoration of confidence. As Obama warned last week in his press conference:
Doing a little or nothing at all will result in even greater deficits, even greater job loss, even greater loss of income, and even greater loss of confidence.
This puts confidence on a par with jobs and income. That might seem odd at first, but it appears to be the general consensus. Certainly according to the entrepreneur Sir David Tang, who writes on the BBC website that “pessimism is the most serious cause of the global economic tsunami”. Even David Brooks agrees.
A contrary view comes from economist Kevin Hassett on Bloomberg News. According to him, confidence – or overconfidence – was the principal cause of the credit crunch. He blames the inflated sense of entitlement felt by the MBAs on Wall Street desk, quoting a study which equated narcissistic traits with leadership potential:
The results of the study had large implications for real-world settings, because “narcissistic leaders tend to have volatile and risky decision- making performance and can be ineffective and potentially destructive leaders”.
It may be that Hassett is referring to a different kind of confidence to Obama and Tang. He’s talking about personal confidence, they’re talking about consumer confidence. But it seems to me there must be a connection – otherwise why use the same word? So who’s right? Is confidence to blame; or is itwhat keeps the economy afloat?
Perhaps - and this is just a thought - both are right. Confidence does drive the global economy. But, like capitalism itself, it is fundamentally volatile. When the going is good, confidence is the rocket fuel of innovation and entrepreneuralism. But it always overreaches, because it is based on a faith in the future that can never be fully realised.
Not evidence for this, but a sign of something: the State Street Index (below) shows a record jump in global confidence in February:
I would ask if the world has gone mad. But I know the answer to that already.
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I think your conclusion is right. It seems quite coherent to say that confidence can be the cause of a problem and part of the recovery from it
It’s confidence that makes you ride a bike with no hands and confidence that gets you back on the bike after you fall off and knock your teeth out.
But it does raise the question of how one segments confidence? Are there qualitative differences between different forms of confidence? Are they really the same thing?
“there must be a connection – otherwise why use the same word?”
Well maybe, though those of us who squandered our youth on French philosophy wouldn’t see it that way…
Agreed - I beleive that confidence, one of the factors, will certianly play a vital role in getting us out of the recession as lack of it which put us into this in first place. However, this confidence will be hard to build again on these city high flyers…
Oh really? What do the French philosophers have to say on the subject?
I know that reasoning’s a bit dodgy - but I still think there’s something in it. I mean, we don’t use the word chair to describe a table, do we, because we know that you sit on one and eat supper off the other.
Doesn’t the same apply to confidence?
Arbitrary signifiers, differance and all that jazz….
It’s true that we don’t use the word chair to describe a table, but we do use the word table to mean both the thing we eat our super off and a grid in which we present data and they’re not at all the same thing.
And we do use the word chair to describe the thing we sit in, and the person who runs a meeting and a professorial post and while these things have a metonymic relationship they are not in the end very similar…
I wouldn’t claim that French theory is a particularly fruitful way to go, though in the case of confidence there may be something in Derrida’s idea that a word takes its meaning not from some platonic ideal of what it is but through constant differentiation from what it is not?
Alright, alright. No need to be quite so thorough in your demolition of my point!
I’d say Derrida’s take sound just about right - that’s really helpful, actually.
Is that idea always opposed to the notion of any definition, or is it possible to combine it in some way with a basic definition of what confidence is?