Sound Strategy: Jimmy Carter and SVB show thinking long-term is best course of action

Sound Strategy: Jimmy Carter and SVB show thinking long-term is best course of action

March 16th, 2023

Two things have happened this month on the national stage that are worth our reflection regionally. One is more obvious while the other less so, but they are both deeply related.

The comparison between the two is rooted in what we know to be a good starting definition – in this case, the art of strategy doesn’t look at any one thing alone in its analysis; in fact, good strategy is based on understanding context around multiple moving things at the same time.

Let’s look at an important recent example of that comparative art form. We begin with an announcement that many may not realize is significantly related to the current state of the nation’s economy.

Former President Jimmy Carter is now in hospice care. Aside from wishing peace and honor to his family during this time – and we do – it’s also worth pausing for a moment to reflect on what might be his most enduring and courageous act while in the Oval Office.

Carter, battling record inflation in the late 1970’s, was faced with a difficult dilemma. Drastically raising interest rates was in the best interests of his country and at the same time politically risky.

Carter, to his unending credit, chose the tougher option – appointing Paul Volcker to shock the financial system and, partially as a result, Carter became the first incumbent president since 1932 (Hoover, in another economic moment) to not be re-elected to the presidency.
Volcker would go on to solve the crisis for another President.

Carter chose the country ahead of politics. And while Carter wanted what all presidents want – to be re-elected – he also knew that legacy matters more than duration in many cases.

One of the top stories this week is yet another round of financial contagion–bank failures, most notably Silicon Valley Bank, rumors of failures, and the rise of fear in a banking sector reacting to long-term commitments and short-term deposit rates.

Overall economic conditions are similar to what Carter faced: stubborn inflation, the approach of an election cycle, pressure from many different angles, and a nation deeply divided.

Our elected leaders today will face another round of tough decisions that suggest courses of action in the weeks, months, and years to come.

Our hope, in deciding a strategy, is that the needs of the country be fairly considered (even prioritized) in light of political realities.

It will be tempting, in other words, to solve for political expediency – reversing course on rate increases, for example, or using the situation for systemic political gain.

We are reminded of Carter’s cool courage in the moment and his willingness to do the right thing even as emotions ran high.

More locally, both Carter’s example and the unfolding banking contagion remind all of us that our elected leaders are in positions to make tough decisions.

We hope that, when faced with choices around either short-term expediency or long-term gains, our leaders remain candid and transparent in their calculations with the long-term in mind.

That long-term focus is in the best traditions of political leadership and would do much to quell the financial fires of the present.

“Sound Strategy”, a weekly commentary from our publisher Clark Twiddy, features issues, ideas and information focused on our mission statement of “Covering the Business News of the Greater Outer Banks”.

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