President Shalala on the Recession/Depression: “Overreacting is an important strategy in a crisis”

UM's President Donna Shalala has written a remarkable letter to the UM community,

Some random thoughts before a long weekend:

Overreacting is an important strategy in a crisis. My mind-set is that we always have to do more than necessary during any kind of financial crisis.

In this one, cash is king, so we have asked everyone to eliminate all unnecessary spending—from snacks, to paper, to travel. It is the little things that add up to big dollars. We will sit on the dollars so we don’t have to borrow to pay for necessities and can preserve our reserves.

It’s really not confusing. I’m sure most of you are doing the same thing in your personal budgets.

We can do this. Our goal is to protect your job, our core programs, and continue to get better. We can do this—yes we can!

Concerning yesterday’s jet crash in New York’s Hudson River—one of our students was on that plane. He will graduate in May because he had an angel on his wing and a courageous pilot in the cockpit, and the New York/New Jersey community had an emergency plan that worked.

On the occasion of Monday’s celebration of Dr. Martin Luther King Jr.’s birthday, I would like to share my favorite speech. It is one few have ever read—the address Dr. King delivered in acceptance of the Nobel Peace Prize in 1964. Please click here to access this brilliant speech, which rings every bit as true 45 years later.

As usual, send me your ideas and have a safe and happy weekend.

Overreacting is an important strategy in a crisis. It may even be true; there's a real chance that Pres. Shalala's attitude, and the cost-cutting she's imposing on all of us, is the best policy for the University's long-term flourishing. But the collective action consequence of multiple overreactions to a recession or other financial shock is a depression. The University has basically frozen its considerable construction plans for the next 6-12 months. That will have substantial knock-on effects on the local community. We're all being asked in various ways to economize. It could be much worse of course, and may yet be; I am deeply grateful for tenure, and worry for my friends and neighbors without it.

Clearly, one of the biggest challenges for the Obama financial team will be to turn this psychology around; “fear itself” is emergent and palpable when it prompts even the usually indomitable Shalala to urge us to overreact — something only a step or two from panic.

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4 Responses to President Shalala on the Recession/Depression: “Overreacting is an important strategy in a crisis”

  1. Rafe says:

    I think it’s a very odd choice of words. I’ve never seen “overreacting” used positively before, I don’t think. Prudence is an important strategy in a crisis. Thinking quickly is an important strategy in a crisis. It’s funny that she references the ditching of the US Airways flight in the Hudson in the same email message. Had the pilot overreacted, everyone on the plane may have died. Instead he assessed the situation, quickly came up with a plan, and then executed the plan to perfection. I think that’s what you look for in a leader.

  2. Coach says:

    When will you grow a pair and stop sugar coating your disdain for Donna?
    Are you just waiting for Obama to swoop her away into Team Clinton II?

  3. michael says:

    Eh? Shalala has, on balance, been very good for UM. I don’t think every move has been perfect: I had a number of differences with her relating to conduct during and after the strike (although the settlement itself was fine), and worry about the acquisition of Cedars, mostly since I don’t understand it. But in many other ways, from fund-raising to hiring a very fine set of Deans for the various schools (and not least finding us a first-class Interim Dean!), Shalala has done very well.

    Nobody’s perfect, but the point of my posting was primarily that Shalala’s latest missive illustrates a psychology that is rampant nationally, more than anything specific to her.

  4. rah says:

    Overreacting is an important strategy in a crisis.

    “When in danger, or in doubt, run in circles, scream and shout.”

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