This is what it all boils down to…
Saturday, the Wall Street Journal put it on the line. In an editorial titled “Bernanke’s Market Week”, the Journal states that “The most precious commodity a Fed Chairman has is credibility.” The article goes on to say, “the Fed has a growing credibility problem” related to the weakness in the value of the dollar. You can find the editorial at http://online.wsj.com/article_print/SB121400288407493271.html.
Unfortunately, this is only one piece of the picture. This whole administration has a credibility problem. And, it starts right at the top. (You might note Thomas Friedman's column for Sunday June 22: "Mr. Bush: Lead or Leave." http://www.nytimes.com/2008/06/22/opinion/22friedman.html?em&ex=1214366400&en=fd288df78dd325e6&ei=5070)
The culture of an administration…whether it be a business…a family…a non-profit organization…or the national government…is determined by the leader. Everything that a leader says…or does…should reflect the culture that he or she wants to see permeate his or her administration. It is reflected in the people that the leader chooses to join the administration. It is reflected in what happens to people once they join the administration. That is, everything that is done by the leader “hangs together”.
The consequences of the culture created are ultimately there for all to see.
The leader cannot control events…the leader can only control how his or her administration anticipates or respond to events. And, the actions of an administration reflect the thing that it can directly influence…the culture established by its leader. And this culture engulfs all who are a member…the talented as well as the less talented.
This administration only has a few more months left. Lost credibility cannot be regained in that period of time. The world has begun to focus on the credibility of the people now seeking to become the leader of the United States. What kind of culture will these people create once they achieve the goal they are chasing?
Within this kind of environment, it is hard to imagine that the financial markets will settle down. There will be rallies here and there. There will be sell-offs here and there. Given that there is little or no credibility to be found these days in Washington, D. C. who can place a bet on what anyone says.
In the waning days of this administration…
this is what it all boils down to!