Table of Contents
The global financial crisis that started some time in 2007 and continues to unfold is a pure example of a trans-boundary crisis: it washes over geographical boundaries and leaves no sector of economic and social life untouched. It is hideously complex and thus hard to map and comprehend; it escalates through ‘tipping points’ and rides reversed feedback loops. The damage is staggeringly high and mounting. The ‘new normal’ that will emerge after this crisis will likely look very different from the one we had before.
Comparisons with the depression years of the 1930s often suggest the current crisis is not nearly as bad and is mostly under control, but the debate raging among economists tells a different story: nobody knows how bad it really is and what is still in store for us (for instance, Bradley et al. 2009). Economists disagree about how many toxic assets are still out there, what the consequences of worldwide stimulus packages will be, whether lost manufacturing jobs will ever return to Western economies and when it will be over. For political leaders, the global financial crisis is terra incognita.
How can political leaders navigate this unknown terrain? Traditional crisis-management skills—making ‘hard calls’ under pressure and with little information—are no longer sufficient according to crisis researchers. It is not just what they do or decide; what truly matters is what leaders say, the way they say it and the way it is understood by others. Great crisis leaders—Abraham Lincoln, Franklin D. Roosevelt, Winston Churchill and John F. Kennedy—are remembered for their eloquence and their words of consolation and inspiration when it mattered most.
In the early months of his presidency, Barack Obama was frequently referred to as the ‘cheerleader in chief’ and the ‘psychologist in chief’ (tellingly, perhaps, it remained unclear who the ‘economist in chief’ was). The US President was chastised alternately as being ‘too pessimistic’ and ‘naively optimistic’. The attitude and words of leaders still matter a great deal in times of crisis.
Crisis leadership, in this perspective, is essentially about the use of discourse aimed at shaping a shared understanding of adverse events and providing guidance for dealing with them (’t Hart 1993). The underlying assumption is that incumbent elites try to frame the events and persuade the public (through the media) to accept their definition of the situation. The hypothesis is that a well-executed meaning-making strategy will help win the framing contest and thus shore up political capital and the policy commitments of leaders (Boin et al. 2009).