What's the problem, Mr. President? Bush's shifting definitions of the 2008 financial crisis.

Author:Holtzman, Richard
Position:George W. Bush - Report
 
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Introduction

On September 15, 2008, the 150-year-old global financial services firm, Lehman Brothers Holdings, Inc., declared bankruptcy after the Federal Reserve and Treasury Department denied its pleas for a federal bailout. The firm, which had generated more than $3.1 billion in profits during the previous year, saw its stock price drop ninety percent in a single day. Dragged down by Lehman Brothers, the Dow Jones Industrial Average fell over 500 points, its largest single-day loss since the immediate wake of 9/11. The Wall Street Journal declared: "Crisis on Wall Street as Lehman Totters"; (1) the Times of London reported: "Lehman Brothers Collapse Sends Shockwave Round World"; (2) and the Washington Post read: "Stocks Plunge as Crisis Intensifies." (3) Over the course of the day, the dominant media narrative that emerged was characterized by crisis, complexity, uncertainty, and panic.

President George W. Bush defined the situation in far different terms. Rather than shifting into crisis mode by adjusting his schedule and aggressively engaging with the unfolding events on Wall Street, as might be expected, he offered only a brief statement on the matter during a prearranged joint appearance with the visiting President of Ghana. Bush acknowledged that "Americans are concerned about the adjustments that are taking place in our financial markets," but then offered reassurance: "At the White House and throughout my administration, we're focused on them--and we're working to reduce disruptions and minimize the impact of these financial market developments on the broader economy." (4) The president provided no explanation of why the events of the day were "adjustments," rather than signs of a financial crisis as described by media, why they were occurring, or what they meant. And he gave no indication of what his administration was doing to ameliorate the situation or what actions might be taken in the future. Instead, Bush sanguinely declared: "In the long run, I'm confident that our capital markets are flexible and resilient, and can deal with these adjustments." (5)

With these brief comments, Bush offered what policy scholars refer to as a "problem definition"--an interpretation of conditions and events that is constructed "to explain, to describe, to recommend, and above all, to persuade." (6) This study examines the development of Bush's problem definition of the financial turmoil during a five-day period between September 15 and September 19, 2008. Specifically, it explores how Bush's interpretation of events shifted over time in an effort to rhetorically justify his inaction during the first days of the crisis and then, after reversing course, to defend taking aggressive action just days later. In doing so, this interpretive analysis focuses on Bush's rhetorical choices in which he acted. These included decisions to speak or not speak, and when; identification of causes of the crisis; the framing of this causal story and its implicit or explicit attributions of blame; justifications of past policy decisions and administrative actions; characterizations of risk; and the framing of solutions and their merits. These choices are examined within a political context marked by an adversarial Congress; Bush's lame-duck status and low public approval ratings; the ongoing political campaigns, including a presidential campaign in which the Republican nominee had distanced himself from the sitting president; Bush's rhetorical and ideological commitments to the free market; and considerations of his legacy. On a more general level, the purpose of this study is to illuminate an example of how presidents try to shape the public understanding of reality and, by doing so, attempt to influence the political and policy-making environment through problem definition.

This study introduces the notions of the social construction of public problems and presidential definitions of reality with a review and discussion of the seminal literature in these areas. Next, it identifies and examines three distinct stages of Bush's discursive response to the financial collapse and tracks the changes in his rhetoric that occurred during this five-day period. It concludes with both particular and general considerations of the significance of this case study for our understanding of presidential problem definition. It finds that Bush's rhetorical response seemed out-of-step with the dominant public and media discourses on the financial crisis. Rather than defining public problems in a way that augmented presidential power as one might expect, the president appeared to be overwhelmed by unfolding events, thereby undermining his rhetorical leadership. Thus, this study raises the possibility of a more systemic concern--that a confluence of pressures from both within and outside the modern White House have made successful presidential rhetorical leadership much more difficult to achieve.

The Social Construction of Public Problems and Presidential Definitions of Reality

In November 2008, one week after he had been selected as President-Elect Barack Obama's White House Chief of Staff, Rahm Emanuel, while commenting on the financial crisis, remarked: "You never want a serious crisis to go to waste." (7) Critics branded this statement "fundamentally undemocratic ... fear-mongering," and cited it as evidence that the incoming administration was "taking advantage of the emergency to push a partisan agenda" and "drive toward centrali[z]ation and government domination of the economy." (8) And yet, Emanuel had simply reiterated an argument that has long been considered conventional wisdom in both the practice and the study of the American presidency: crises create openings for bold presidential leadership and action. As Michael A. Genovese, a presidential scholar at Loyola Marymount University, explains: "In a crisis, the normal checks and balances neither check nor balance. Power gravitates to the president." (9) Emanuel was merely acknowledging the fact that, for American presidents, a crisis offers "an opportunity to do things that you think you could not do before." (10) Often less recognized is the role that presidents play in creating crises not literally, but rhetorically through their interpretations of reality and definitions of public problems. Presidents use strategic language and images to transform situations and events into crises, which, in turn, can augment their relative power within the American political system. (11) The observation that presidents define crises is not to say that such crises are manufactured or designed to manipulate, but rather that presidents recognize and act on opportunities to define reality advantageously. This view suggests that meaning is socially constructed and that we understand the world by interpreting particular objects, actions, events, and situations within particular contexts, from particular points of view, to accomplish particular goals. Therefore, the difference between a situation and crisis is not a matter of degree; it is a matter of definition. Presidents, as the "chief inventor and broker of the symbols of American politics," occupy an incomparable position from which to define political reality. (12) And while they cannot successfully do so with impunity, by rhetorically ascribing situations and events with particular meanings, presidents are able to create crises and define public problems to their political advantage.

All modern presidents engage in these strategic rhetorical constructions, with varying results. Franklin Delano Roosevelt used the crisis of the Great Depression to reframe the role of the federal government as not only the protector of rights, but of social and economic equality as well. In his interpretation of that crisis, Roosevelt secured his own political success while redefining American liberalism and the modern Democratic party. (13) Dwight D. Eisenhower used the analogy of falling dominoes to draw attention to Southeast Asia and make the case that what might appear to be events disconnected from American interests was instead a potential crisis of global proportions. (14) Lyndon Baines Johnson used the "war" metaphor to identify poverty as a crisis and make the case for his Great Society programs. By doing so, he sought to construct a crisis that demanded an urgent national undertaking and could inspire a public with little knowledge of the issue. (15) In what has come to be known as his "malaise" speech, Jimmy Carter identified a "crisis of confidence" in the United States, which constituted a "fundamental threat to American democracy." (16) The upshot of these examples, for the purpose of this study, is not to identify the most significant cases or draw conclusions about success and failure, but rather to demonstrate that crises do not define themselves--they are strategically crafted through language and, in particular, presidential rhetoric.

In recent decades something of a multidisciplinary convergence of perspectives on the study of problem definition has emerged, with a diverse range of seminal contributions coming from social constructivism, postmodernism, political science, the study of social conflict, and policy analysis. (17) Three crucial characteristics of problem definition are central to this analysis. First, competition to define problems is inherently political. Second, rhetoric is the medium through which this struggle for power occurs. And third, in the definition of problems, context matters. To demonstrate the significance of these ideas in this analysis, these three characteristics are addressed in relation to their respective relevance to the American presidency and its occupant's contemporary role as the national problem definer-in-chief.

The Politics of Problem Definition

Deborah A. Stone, a public policy scholar at Dartmouth University, argues that "problem definition is never simply a matter of defining goals and measuring...

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