Desperately Looking for Leadership

André Pratte is cynical about the potential of weak democracies to solve complex problems.
By: /
September 23, 2011

As the world is on the verge of a second economic crisis in fewer than five years, western political leaders seem unable to act in as unified and determined way as they did in 2008 and 2009. All are very good at lecturing others, specially at the Europeans (as John and Jennifer have mentioned in earlier posts).

I could not believe my eyes when I read that US Treasury Secretary, Timothy Geithner, would press the EU to do more to solve its sovereign debt crisis. Then on Thursday, our own Finance Minister Jim Flaherty said Europe needed to do more: "Certainly, in Europe, we need an exercise in political will, we need decisiveness, we need clarity." Who are we to provide advice on political courage?

It  is easy to criticize European leaders for not being decisive enough. Yet we should recognize that most are, locally, in a very difficult political situation. Chancellor Angela Merkel, for instance, has seen her grip on power considerably weakened as Germans get ever angrier about footing the bill for the continent’s less disciplined nations. On the opposite side of the bill, it is difficult to imagine what more Greece’s PM George Papandreou could do to satisfy the country’s creditors.

Managers and consumers desperately need to be reassured. "We need a conductor," said the head of an investment firm quoted by the Globe and Mail. "If we don’t get that conductor, it is going to be a very messy orchestra." Of course. But who could it be?

Herself calling for strong, collective action, IMF Managing Director Christine Lagarde added a note of realism: “There is obviously a gap between very solid, very strong governmental commitments at the highest level and the implementation time. That’s inherent to parliamentary life … we are no longer in Napoleonic times when a leader could just snap his fingers and make it happen. We are in democracies and it takes time.”

So the kind of leadership the world needs is not only one that will convince fellow heads of government to act but also that will persuade the citizens of each country to support the measures necessary to avoid the precipice.

In the US, not only is the economic situation dire but the political gridlock renders any government action impossible. President Obama may look like a great conductor but half the orchestra is looking the other way. As Mr. Geithner recognized after his first unfortunate intervention in Europe, the Americans "are not in a particularly strong position to provide advice» to other countries about political will." Who knows how high the unemployment rate will be before the November 2012 elections free Washington.

As far as Europe is concerned, most experts believe that in the longer term, the common currency will survive only if the member countries agree to a closer coordination of their fiscal policies. European Central Bank’s President, Jean-Claude Trichet, has even called for a European Finance Minister.  But such changes would need popular approval through referendums; in the current context, such a result is highly improbable.

So yes, extraordinary political leadership is desperately needed in these troubled times. But what if the world has become so complex and are democracies too weak (cynical politicians, embittered citizens) that finding and implementing solutions is beyond our capabilities?

Photo courtesy of Reuters.