Thursday, June 25, 2015

President Obama and Risk-Taking

One of the critiques of President Obama that has some merit is that he is pretty risk-averse. He doesn't take a lot of chances on things that might prove to be failures. For example, the President has been very clear about the fact that he would have preferred a single payer health insurance system. But he knew that the chances for failure with that were way too high (see: Vermont) and so he went for a more modest change to our current system with Obamacare.

The one time I can think of that the President took a big risk that didn't pay off was when he attempted to negotiate a Grand Bargain with Speaker John Boehner. That one failed. But I also think that after all his talk of wanting to engage in bipartisan reform, he had to at least give it a go or prove himself to be yet another politician made of empty promises.

I suspect that Obama's risk-aversion is tied to his competitive desire to win. We've gotten a pretty big taste of that this week with the SCOTUS Obamacare decision and (even more so) with Congressional approval of TPA. The President tends to take risks when he has pretty well gamed out how to win. I'm reminded of this quote from Steven Waldman:
One can debate the extent to which these achievements happened because of Obama’s skills or his timing. I think his long view, maturity, and pitch-perfect sense of when to take the big risk (e.g., jamming through Obamacare after the Scott Brown election; invading Pakistan to kill Osama bin Laden) were major factors.
That "pitch-perfect sense of when to take the big risk" is the reason President Obama almost always wins when he engages on something 100%. His opponents would do well to remember that.


  1. lol using "risk adverse" and Obamacare in the same blog post

    better would've been: just like war, he's not against risk. he's only against STUPID risk

    1. You should look up the definition of the word risk - "expose (someone or something valued) to danger, harm, or loss."

      So yes - absolutely - PBO is risk-averse.

  2. I am fine with sheriff's assessment - STUPID risk is utterly irresponsible. For that part, I don't think the "Grand Bargain" was a failure at all so much as it was a careful blockade against what the GOP was wishing to kill. By protecting essential programs that were immune from cuts or sequestration, the president gained little but saved much. When meeting a flash flood, it is wise to make sure the sandbags hold to protect as much as possible. THAT is wisdom.

    I am appalled when people insist he should lead us down paths that are sure and certain destruction, risking the well being of those who especially cannot lose more. Theater over substance is immoral, and too many prefer the former because they are not directly impacted by the loss of the latter. You are quite correct when you say he's against risk - it is others who would be exposed to 'danger, harm, or loss'. I deeply appreciate that in this President.

    It is one thing to take risks that put your own life on the line. That's often admirable. It is utterly immoral to risk others' lives, well being, scarce resources. This is a most moral president. Those who do not see that are those who sacrifice others with little to no thought. I prefer the President's risk aversion, done in our best interests.

    1. I'm not talking about the distinction between "stupid" risk and "smart" risk. PBO is always smart. That's a given. The issue here is what levels of risk one is comfortable taking. President Obama is averse to taking the level of risk that could lead to losing.

  3. I agree with your point, Nancy but I think your terminology is a bit of a wedged usage. As a former project manager, I'd say rather than "risk-averse" PBO is highly risk-AWARE. And he is a skilled risk manager.

    Most people are poor identifiers and assessors of risk and even worse risk managers (how can you deal with a possibility you've not foreseen or that you've misapprehended?). Our pragmatic POTUS not only sees the risks clearly, he's open to decisions which include more than the base options of 'engage' or 'avoid'. When the risks are significant, he sets up appropriate contingencies and accommodations.

    When the risks can't be adequately reduced or mitigated, when the presumed benefits are insufficient or noncritical, when the costs of mitigation are too high, or a combination of these, a good risk manager may choose a different approach than one he might have preferred. That's just flexibility.