Conor Clarke talks to Robert Shiller about his new book. On the subject of economic confidence:
…the thing is that people are really savvy about someone trying to instill confidence in them. And the classic example of that is Herbert Hoover, who was President when the Depression started. He thought that the best thing for him to do was to keep talking up the economy, saying that there’s nothing wrong. In fact he went so far as to give predictions, that the recovery will start in two months. And then two months passed and things were even worse, so he just extended his deadline for the recovery. And eventually he became the laughingstock. See that’s the problem, it’s more subtle than that. My wife is a psychologist and sometimes I will say something like ‘You’ve got to get control of yourself,’ or ‘Pull yourself together’ and she will say ‘That’s not an enlightened way to talk. We don’t say that as psychologists.’ You can’t tell people to pull themselves together, it doesn’t work. So, I guess the best thing we have is a stimulus passage.
The job of president is not easy right now. It requires enough sobriety to remind Americans of the profundity of the crises bequeathed by his predecessor – two perilous and unresolved years-long wars, a bankrupt Treasury, an economy in post-bubble collapse, a disastrously short-sighted detainee policy; and enough hope and optimism to keep us from deflationary despair. I’m not one of those eager to pounce on the new president’s record in balancing all these things. It’s been a month; and if there’s one thing we’ve learned about Obama, it’s that he’s already thinking in terms of four years.
The Dish 