The NYT asked me to give policy advice to our President elect. Here is my piece and here is an excerpt from my very simple argument:
Rebuilding confidence might seem a small matter, but it is not. The
truth is this: America is a wonderful and magnanimous nation when it is
a winner, but Americans are not used to losing and Americans are not
used to panic.
Often we respond to negative events badly, so we need to be especially careful when we are in a losing or risky position.
bad events can cause a panic among the citizenry or its leaders, which
translates into subsequent bad decisions. For a classic example of a
negative policy dynamic, look at 9/11. The United States lost 3,000
lives and a great deal of wealth and confidence. The government then
took actions, most of all the Iraq war, which led to even greater
We are in danger of getting stuck in another negative
dynamic, but this time in the realm of economics. We might follow up
the financial crisis with some worse responses and policies.
not just the country’s future that is on the line. Despite the
commonality of anti-American rhetoric, the United States sets the tone
for much of the world.
Addendum: Here are related pieces.