If there were any doubt that good public relations is critical to good policy making, we need look no further than the national conversation over the $700 billion economic package designed to stop the bleeding in our credit markets.
Proving that "shock and awe" is no substitute for a systematic communications strategy, the sudden announcement on September 19th that the federal government would invest such a huge amount in the nation's banks generated an almost-instant backlash.
A chorus of U.S. representatives rebelled, framing the legislation as a "bailout" of Wall Street. Reporters and pundits echoed this storyline, too, nurturing the perception that only the wealthy were being thrown a life preserver from Washington.
The result: Phone calls and emails flooded into members' offices urging Congress not to "bail out" the fat cats. Polls showed that when asked who would benefit from the legislation, a solid majority pointed to Wall Street. The House quickly voted down the package, sending the market into a tailspin. Only later would a revised bill, laden down with pork to attract reluctant votes, pass and be signed into law.
Most importantly, public confidence in Washington and in the economy tanked. After the bill was signed, a CBS News poll showed 70 percent of Americans disapproved of the way Congress handled the economic situation. Another poll conducted Oct. 3-5 showed that just nine percent of the public thinks the country is going in the right direction, the lowest number recorded in the Gallup organization's history.
A critical lesson to be learned is that marketing matters in governance. If you want to make major policy changes, you have to carefully, credibly and systematically lay the groundwork for what needs to be done. That involves educating the public about the problem and its causes, and then making the case for how your policies are the solution.
Doing this requires first, being straightforward, clear and factual in your explanations; second, directly connecting the dots of both the problem and the solution to the daily lives of Americans; third, using language that frames the debate in the way you want; and fourth, having a credible messenger.
All four elements were missing in the Bush administration's "marketing" of the plan. Explanations were dense, alarmist and inconsistent without providing sufficient credible information. They never connected the dots between Wall Street and Main Street. The word "bailout," rather than "rescue," came to define the plan. And when the president has approval ratings in the 20s and the treasury secretary is a relative newcomer to the national political stage, the choice of messenger was problematic.
In fairness, aspects of this were beyond the administration's control. One does not always have the luxury of time, especially when financial conditions are deteriorating almost on an hourly basis. However, as Roll Call reported, White House spokesman Tony Fratto "insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials." If so, the administration's failure to launch a public relations campaign on day one was a huge mistake.
Their reluctance to start marketing the plan last summer was understandable. Economic officials must always weigh their words carefully to avoid saying anything that "spooks the market." However, the need to thread a message needle is no excuse for not attempting to do so. There are ways Treasury Secretary Paulson could have made the case for taking preventive action to strengthen the economy's ability to weather tough times long before September 19th.
Equally important to this process is the need to be consistent and to convey calm. The run-up to the rescue plan's introduction, with the decision to let Lehman Brothers fold but bail out AIG, hardly presented this image. Actions since then -- especially Paulson's recent decision to directly invest in major banks rather than buy their toxic assets -- likely exacerbated this problem.
One cannot remake the past, but what needs to happen going forward? First and foremost, greater message coordination and consistency are essential to restore confidence that the rescue plan's implementers know what they're doing.
Second, the administration must do a better job of showing how the rescue plan will have a positive impact on people's lives -- on their retirement nest eggs, their ability to borrow money, and even their job security. Warren Buffet might be best known as the world's most successful investor but he showed his PR acumen as well, when he told CNBC, "There is no question it is a rescue plan. But a rescue plan for the American economy, not Wall Street... This is designed to help the American economy from going into the ultimate tailspin, when credit is frozen... when banks are unwilling to lend to each other... They [lawmakers] are not doing this for Wall Street."
Most important, the incoming administration should start laying the groundwork on November 5th for its agenda to revive our struggling economy. They will have newfound credibility compared to the current White House, but in the current economic and political environment, their window of opportunity will be narrow. They should maximize it immediately to explain and build support for their policies and succeed at governance.
Jeff Sandman is CEO of Hyde Park Communications. Kevin Nix is an Account Supervisor.