The day when Mr. Obama appeared at the joint session of the US Congress to deliver his much-anticipated speech, I arrived very late in my house. I was tired and ready to go to bed (yes, it is already night here in Europe!), but the excitement and clamor on TV kept me awake. So I decided to watch the 30 minutes speech about the US economy. After all, I am a student of economics, and I have enough curiosity to learn what the President of the world’s most powerful economy have to say about… yes about solving the World’s biggest problem. Which happens to be, at this moment, the sick state of the US economy. And Mr. Obama does not disappoint at makes speeches either. (I am not sure if it is a credit for him, because his opponents are increasingly presenting him as a naïve college professor whose only specialty is mastery of words …)
The US economy has been in tatters for years now. The Great Recession that started 3 years ago has left millions of Americans jobless. After spending more than a trillion dollars to ‘stimulate’ the economy, the government has not yet succeeded in reversing the gloomy state of the economy. In fact, many were talking that the US (and by extension also ‘us’) is just sliding into the second phase of what they call a ‘double-dip recession’.
Across the Atlantic, Europe’s economy is even in a more dire situation. Because of the near bankruptcy of the Mediterranean Euro countries, the Euro is in deep trouble. The situation is so gloomy that many are talking about the collapse of the Euro. And I have to confide to you, I myself has considered moving out my small saving from the Euro….
And there he comes, Mr President - preceded by his cabinet- exchanging handshakes and kisses with seemingly everyone in the crowded congress house. I noted that when you are a president everyone, and yes literally everyone, wants to talk to you. It must be a hard business. Do you run the country or exchange handshakes? Make speeches or kiss all those congresswomen? For a moment, I wondered if it is not just a kissing ceremony.
Everyone is curious about what the President has in stock. The economic situation is not just bad; it is also extremely controversial. If you put together the world’s leading economists and ask them to diagnose and fix this crisis, they won’t be able to do it. Which is why it is not solved yet.
In the beginning of the crisis, everyone agreed with the Democrat’s idea of a stimulus package – that is to say the government’s intervention to step up the economy from the brink of collapse. Three years later, the Republicans argue, and after spending a trillion dollars, the economy is still in tatters. So they recommend cutting back taxes, shrinking the government and reducing the ballooning government deficit. The Democrats think just the opposite. They believe the stimulus was a success because it averted a looming catastrophe. And they add that what the country needs is more government spending. The public debt is large, they contend, but the immediate problem is the state of the economy, not the ballooning debt. The Democrats and Republicans are so divided about the priority between addressing growth and the debt that they nearly led the country into bankruptcy just a few weeks ago. That cost America dearly. Just after the bitter squabble between the two parties ended, S&P downgraded America’s debt rating, claiming that the two parties nearly bankrupted the country and led the world into an economic disaster….
If I were told to be the judge, I would have a hard time because both sides have a point. The economy needs to grow now, so it perhaps deserves more stimulus. And yes the public debt is also already 14 trillion dollars! And something has to be done about that too. The problem is that no one, not a single of the all-too-famous economists, is yet too sure as to which of the two issues should be given a priority. For every argument he makes in favor of one idea, there will be a thousand arguments for its opposite. That is why it is called the World’s Biggest Problem.
And there comes Mr President. He is already on the pulpit now, just in front of the House Speaker John Boehner, who happens to be an arch-enemy Republican, and the Vice President Joe Bidden. Hundreds of congressfolk received him with a standing ovation.
No one is sure what this man will pull out of his hat. On my part, I did not expect much. Considering the deep controversial nature of the problem, I expected a few smart ideas, with pros and cons, and a few hesitant proposals on how to fix the World’s Biggest Problem. And I was sure the Republicans in the congress –including the House Speaker Mr Boehnerwho sat there with a gloomy face– are sure about one thing: they expect no solution from Mr President. They have exactly the opposite idea of what he is to say, whatever that is gonna be. These parties are so divided that I don’t know how they stand each other. I sometimes think it is easier to take the guns and go to the jungle – the African way - than to sit together to ‘agree’ with someone who thinks just the opposite of whatever crosses your mind ….
Then followed the speech. The president detailed his solution for the World’s Biggest Problem. In one very important aspect, the speech was the exact opposite of what I expected. There was a lot of math and economics in it, with some of which I disagreed, but there was something that was exactly the opposite of my expectation.
The president was sure about his answer.
Now, that is striking. Here is the World’s Biggest Problem, about the diagnosis of which even the best economists cannot agree, let alone on its solution, and the president is sure about how to fix it? That is something!
Mr. Obama was in a fired up mood. Delivering his speech in his usual powerful and charming voice, the president made an eloquent and detailed description of his solution. He called it “The American Jobs Act,” or the AJA. Obliviously, the AJA is a meticulously developed proposal, which is reviewed and re-reviewed and consulted with his council of economists multiple times, and most importantly one that takes into account the voices and considerations of the Republicans in the House. But that is not the point. However meticulously you develop your solution, you can never be sure about it when what you are facing is the World’s Biggest Problem.
That is where I learned My Greatest Lesson. And it goes like this: if there is something called the “World’s Biggest Problem” there also is the “World’s Biggest Solution.” When you think about it, that sentence is almost like saying that there is no such thing as the World’s Biggest Problem because all problems have answers. That was what I learned from Mr. President, not any economics at all.
A famous basketball coach called John Wooden claims to have re-discovered the meaning of the word “Success.” He completely disagrees with the definition in the Webster dictionary for the word, which defines success as getting something others don’t have. He thinks that definition is obsolete. His preferred definition is: “Success is the peace of mind which is a direct result of self-satisfaction in knowing you made the effort to become the best that you are capable of becoming.” In other words, the Biggest Solution is the Best Solution You Can Conjure Up. When you think about it, there is no failure according to this definition so long as you did the best. What a rich world, where everyone can be successful!
It seemed to me Mr. Obama has known this definition all along. His attitude for the question was the answer. And it was a big attitude. In his own words: “Man can be as big as he wants to be.” And he wanted to be as big and capable as what it takes to solve the World’s Biggest Problem. And I saw that greatness on tv that late night.
There was one thing the President did not do in his 30 minutes speech. He never emphasized how big the problem was. When he did, it was only to remind the congressfolk that they are greater still. The problem is big, but you are bigger still.
He was so fired up, so inspiring, but at the same time so down-to the earth and meticulous in his math and economics that it was hard not to believe him. Suddenly, I realized that this problem is not big anymore.
That was how I learned the answer to the world’s biggest problem. There is no Big Problem, because we are bigger still.
