The Coming Crisis
In a crisis, people either turn to their institutions or they turn to their leaders to provide a path forward through the emergency. This is especially true when the path forward is waiting out the emergency. People respect action, so they have to have faith in their leaders if the right course is patience. Alternatively, if the leaders and institutions are not up to the task, then the people turn on each other.The French Revolution is the perfect example of what happens when leaders and institutions fail in a crisis.
It has been a long time since American faced a real crisis. The closest we came to anything major was the financial crisis a decade ago. For people foolish enough to take on the crazy mortgages, it was a very real emergency, but for most people it was more of an abstraction than a real crisis. Unemployment ticked up and the stock market took a header, but it was not the Great Depression. There was a concern, for sure, that the wheels were about to come off the cart, but it never materialized.
Of course, one could say that the leaders and institutions stepped in and guided the country through the crisis. People tend not to think of the Federal Reserve as an essential institution, but it is probably the most important part of government now. The head of the central bank is every bit as important as the President. In fact, he may be more important, as we saw with Greenspan and George Bush. An overly tight monetary policy led to a slight downturn in the economy at just the right time to sink the Bush election bid.
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