First, I have just read your post and the comments about your surgery. Wishing you the very best for a continued recovery and full credit to you for how you have approach what is an awful situation.

Second, a fantastic post on the communications craziness that surrounds the US bail-out farce. The world is watching of course, and even the most casual of observers (my cab driver yesterday for one) can see that the approach to engaging with the public has been way off the mark. Once the inevitable legislation goes through, it will make the PR scorecard for the last few days seem even worse.

Hi Richard -- this is an excellent post. I blogged about it on my blog, Catching Flack on BNET.com. It really should be required reading for everyone in Washington (and on Wall Street).

Good luck with your recovery!

Jon Greer (Edelman SF 1994-97)

Hello Richard,

"People are being talking at, not engaged" - this is the crucial decider for any major organisation whose project is to engender support.

Followed closely by lack of "Acknowledgement of Error". We 'little people' are not daft, which may be quite surprising to many decision-makers! A genuine, simple 'sorry' and 'here's why' goes a long, long way to oiling the wheels and helping everyone move on together.

The histrionics and browbeating over the last few days on your side of the water has seemed rather more like the knee-jerking bossiness of British politicians than the democratic activity of a country which I well know values democratic and considered dialogue between all sections of the population.

Thank you for this assessment of the sticking points. I'll keep your points in mind as I write elsewhere.

And my apologies - you're an expert, you're sucking eggs now I suspect!

Deb

Richard is right. Clearly, "professional communications advisors were not sufficiently involved from the inception of the process." The question is why not? Why was PR an afterthought? The PR professionals should have been invited to the table from the start. If they weren't, then they should have invited themselves. That's their job.

Good points about crisis communication and consensus building. The nature of a crisis precludes well developed plans of any kind. The Bush administration, fairly or unfairly, will be remembered for its "oops" approach to managing the country. 9/11, Afghanistan, Hamas, post-invasion Iraq, Katrina, Russia/Georgia, now this. It's all been one big surprise. Shouldn't presidents, secretaries of the treasury and fed chairmen be looking over the next hill (admittedly not easy, but what organization is more powerful than the federal government)?

That's the bigger lesson for historians and management gurus.

Great, detailed post. I have been amazed at the antipathy for the bailout (stabilization would have been my word). I can't think of a better example of the bottom line value of PR -- our democratic unity has really taken a hit on this one.

I may be wrong but thinking, it seems;

We are putting too much emphasis to rely on politics, and the presidential election to solve a major crisis in a quick fix. It is apparent, that neither presidential candidate have an acceptable plan to do so. It took tine for this crisis to develop and even with a perfect plan, it will take time to resolve it before it can help the current needed Americans, and banks, that need the plan to go into force yesterday to stay in their home. Millions have already been forced out of their homes and too many banks are closing.

What banks and mortgage companies need to do now is to drop interest rates, lower the home payment so people can pay and stay. This will immediately stop foreclosures, let banks and financial companies, regroup, until an accepted bailout plan has been worked out and accepted. Mean time this temporary fix, will also help the banks and allow them to have time to work out new loan programs that coincide with the new pricing of home values that need to be adjusted.
That means people can make payment at half the loan, until the bailout problem is in effect. A half a payment is better than none, for all.

A financial freeze to stop foreclosures on homes and bank loans could be put into immediate effect. What we need now is a financial guru or group of financial minds to solve our financial crisis.
What is happening currently, it seems that punishing the hard working middle class, who will pay no matter what is said, the working back bone of America, while the rich figure out how to keep their millions. What the working class needs now is a secure roof over their head to focus on maintaining their jobs and having a reason to work. Keep people in their homes, not on the street. Stability at home is the real major issue, at stake along with America losing its world power role. If the American Dream of freedom and homeownership is lost, we lose what the hard working American goes to work for, Freedom and a place to call home. As a result, the unemployment rate will go up, crime, and the homeless rate will be worse than any major hurricane that puts people out of their home and a while a hurricane or acts of nature can’t be stopped, a financial issue can be worked out, no doubt. People need the home security and to work to make the financial crisis end. Putting them out on the streets will create more financial crisis than we cannot even imagine. We need to focus on the crisis, to solace it, and not let the politics and presidential election drive us to a hasty decision.

This is an excellent post and one which reflects the communication shortcomings of both leadership and media in present-day coverage of a full range of events, including the general election. The lack of clarity in the economic discussion is especially distressing as this issue is so critical to our individual pocketbooks and the financial legacy we are creating.
Part of the bewilderment is that there is an general lack of understanding of what got us here in the first place. If we cannot identify nor address the root cause, there is an uneasy suspicion that the proposed "bail-out" will not be sufficient to right the ship. Figuratively, the capital market is behaving as if everyone has responded to the emergency by rushing to one side of the boat at once - a certain recipe for a capsize. The politically unsavory part is that it is impossible for the past 10 years of easy money and dis-saving policy to be unwound overnight, the past beneficiaries of which are doing little or nothing to fund a rescue or fill the informational gaps while they sit on the sidelines waiting to pick up the pieces.
Urgently, the Fed and Treasury need to set a floor on crashing asset values before more damage is done to the wider economy, further deepening and prolonging this initial economic contraction.
Strengthening bank deposit protections is the critical first step, followed by an injection of liquidity into the banking system concurrently with a removal of the most "toxic" assets from the banks. With the banks failing to extend credit to one another, the real danger is that otherwise credit-worthy borrowers cannot receive the funding they need to maintain payrolls and operations, further compounding and spreading the economic slowdown into the non-financial sector (aka the real economy). Aggressive steps to revalue and disclose the composition of bank balance sheets including a full and independent accounting of all the off-balance sheet exposures (hedge funds, securitization vehicles and derivatives) are needed to see the extent of the non-performing assets inside (and outside) the direct banking system. For too long the Fed has been ceding control of the money supply to non-bank financial institutions, who have not been subject to oversight on leverage and other capital adequacy controls while they bulked up and cynically relied on the "Greenspan put" to extricate themselves any impending disaster.
Once the true extent of the non-performing assets is better known, then the market can more readily raise the capital required to re-build balance sheets and focus on core, sustainable businesses. It is the uncertainty and lack of transparency of the risks combined with nasty "surprises" that is the root cause of the current panic.
Clearly we have yet to plumb the depths of the sell-off that brought about the Great Depression. The Fed and Treasury have acted strenuously to focus the leadership on the issues, but it is all happening at the eleventh hour. We have been living in a dream world of inflated asset values for too long and a new, but ultimately more sustainable, reality await us. We need Congress to act resolutely and quickly and start the process of re-building confidence in our markets and financial system.

Richard,

I just read your blog and want you to know that it will probably do more for raising awareness than anything else out there right now. Well done and my very best wishes to you for a full recovery. I have family history as well – get checked out twice a year and with just turning 50 in August I will now be pursuing more extensive examinations. Working with you and Faina is one of the most gratifying efforts I have been involved in and together we will raise the money we need for AdMeTech. Get your rest, heal well and see you soon.

Warm regards,
Tony

Richard,

Good luck with rehab; I am confident that you will recover from your surgery quicker than the U.S. economy and political system will recover from the lack of economic, communications and political leadership that has gotten us where we are today. Your post accurately assesses the situation and, as usual, you're right on all points. I especially appreciate your call to have "someone like me" as a voice in this financial cacophony. Here we are at the end of the week, and while I'm confident the vote will come today the message is still missing.

Thanks and all the best,

Thomas

Richard:
First of all congratulations on your thoughtful remarks. What is amazing to me is that we rely on the government to have intelligent people to evaluate, analyze and think through options. But apparently there is an ongoing arrogance that defies that logical thought. How easy would it have been to call in the experts, senior PR thought leaders to help manage informative communication to the American people and economic leaders to sift through options before a plan is mapped out? The result? an uninformed public that somehow 'smells' a swindle.

Well said Richard!

I keep asking myself if somehow my awareness of such things has drastically changed or has this just been the most poorly managed sales pitch for our tax dollars we've ever heard? Are they getting lazy?

Excellent perspective - following even one of these points would have made a difference. Even though the bailout eventually passed, it was a bitter pill that is not well understood.

Spot on, Richard, and speedy recovery. Let's hope executives across the board -- both in the private and public sectors -- will learn something from this economic crisis, including never underestimate the value of your communication advisors.

In this case, the absence of cohesive messaging made room for the inevitable chorus of "blame the other guy" and political grandstanding amid the backdrop of an election year.

As PR strategists, we know what comes of that. When there is a message disconnect, people fill in their own information, make assumptions and/or accept the messages of less credible and further removed parties. That translates into more problems; the perception of our leaders not leading begins to feed the public panic.

There is a psychological consequence to what our leaders say and how they say it. Confident, unified messaging would have gone a long way in helping to calm markets and Main Street.

Let's hope the leadership of our financial and government institutions will take note of their stumble -- and make sure that, in future, their communications advisors have an early seat and early say at the decision table.