Spin Doctors And Central Bankers

By Harmesh Bhambra ‘16

Harmesh Bhambra '16

Harmesh Bhambra '16

Alastair Campbell was Director for Communication and Strategy for Tony Blair, the former UK prime minister, between 1997 and 2003. He was the Labour government’s master of spin, famous for enforcing “message discipline” throughout government. After leaving government he has turned into a prolific writer. As part of this second life, he visited The University of Chicago on October, 8 to promote his new book, ‘Winners: And How They Succeed’.

At the interview with David Axelrod, Campbell mentioned that he thought he knew how to win -- he helped guide the Labour party to three successive election wins. And politicians think they are at the “height of leadership and strategic thinking”. But in carrying out research for the book, he came to conclude that leaders in other fields “do better than politicians” and they are winners for longer periods of time.

Winning with Strategist Alastair Campbell. Credit: Institute of Politics

Winning with Strategist Alastair Campbell. Credit: Institute of Politics

Campbell focused on the value of data in how politicians and business leaders can learn from sport. “Politicians use data for confirmation bias”, whereas in sport data is used to “drive change and innovation”. This approach has been made famous by David Brailsford, former performance director of British Cycling, who obsessed over data to find “marginal gains”. In politics, “people think they are doing well and are scared to know whether they are doing badly”. Alastair Campbell for Managing in Organizations professor?

Campbell described the importance of winners overcoming weaknesses. He first pointed to Diego Maradona, the former Argentinian professional soccer player, who visualized victory and would practice his victory lap before a match. Campbell rubs his fore finger and thumb together in pressured situations. He used this technique when testifying to the UK Iraq inquiry -- “You are taking control. The guy intimidating you doesn’t know that you are doing it”.

Quantitative easing: another book on the financial crisis

A week later in downtown Chicago, Ben Bernanke, chairman of the Federal Reserve from 2006 to 2014, was interviewed by Martin Wolf, associate editor and chief economics commentator at the Financial Times. Bernanke was also in town promoting his new book ‘The Courage to Act’.

Ben Bernanke with Martin Wolf on the Global Financial Crisis Credit: The Chicago Council

Ben Bernanke with Martin Wolf on the Global Financial Crisis Credit: The Chicago Council

Bernanke mentioned that the talk was the “second most popular event this evening’, alluding to a certain sports game further north. Martin Wolf, known for his belief in Keynesianism, fired questions at Bernanke with a notable liberal edge. He proclaimed the importance of Bernanke’s leadership of the Fed throughout the financial crisis “without which we would be in the second Great Depression’, which earned Bernanke a resounding round of applause from the audience.

Bernanke insisted that he wrote the book for himself. To experience the “day by day” and “the fog of war”, and his account, in his view, has advantages over other books due to the sheer length of time he spent at the Federal Reserve.

Bernanke gave a spirited defense of his decisions during the financial crisis as Martin Wolf challenged him about the Fed’s controversial actions, such as quantitative easing
— Nick Anderson '16

Bernanke is renowned for his research on the Great Depression. So Martin Wolf stated that he was perfectly prepared for his role during the crisis. Bernanke mentioned the monetary policy failings during the Great Depression and only when “orthodoxy was thrown outside the window”, then the economy started to turnaround.

“Bernanke gave a spirited defense of his decisions during the financial crisis as Martin Wolf challenged him about the Fed's controversial actions, such as quantitative easing”, as mentioned by Nick Anderson, a second-year MBA student who was in attendance. Bernanke stated that the Fed was aware of house price inflation and subprime exposure, which “did not constitute a meltdown.” Instead, Bernanke believed that the Fed missed the short term funding fragility of the financial sector.

In general, Bernanke reiterated the standard arguments: it was unavoidable to let Lehman Brothers collapse because there were no buyers and TARP had not yet been approved by Congress; QE has not reinforced inequality because “creating jobs is the best thing for the middle class”; and “the Fed had to do so much” since the crisis because of no help from fiscal policy.

Thus, it is not clear whether the “the fog of war” has truly dissipated. The full set of lessons from the financial crisis will take time to emerge.

Harmesh is News Editor for Chicago Business