Only Time Will Prove Obama's Pragmatism

The Independent argues realism and pragmatism (often referred to the Obama effect) has come to American foreign policy.

"...Mr Obama has changed the parameters of American foreign policy, in the Middle East in particular, and the consequences have been immediate. His Cairo address to the Islamic world was a remarkable event in itself; it was followed a few days later by an election in Lebanon that amounted to a defeat for Iran and a victory for pro-Western forces. Well before that, his overtures to Iran had signalled to both the Tehran regime and its opponents that they were not dealing with a President Bush. These overtures, beyond doubt, changed the dynamic of the recent election, and helped set in motion events that have shaken the Islamic Republic to its foundations".

Only time will tell if he can maintain this strategy. Like Bush had to shift his policies post 9/11, Obama may have to do the same if an event spoils his plans.

A few years ago, there was a rookie hot shot broker in the office where I worked. During the peak of the technology bubble, the need for restraint was key. If you positioned yourself as a "conservative" investor you were more likely than not going to close some clients (assets).

The paradox of course was if you were conservative you weren't going to make as much money. Indeed, many investors still insisted on gambling on tech IPO's and stocks with PE multiples that were as logical as North Korea's leader - whatshisnameagain?

Some brokers rode the wave, others didn't. I was partnered up with a seasoned investor who was as true blue conservative and stoic as they come. His turnover (stock activity relative to size account) was well below 1%. To him, none of it made any sense whatsoever. He never recommended high risk stuff unless requested.

Everyone in the office knew, in the long-run, his book of business was going to remain steady. Yet, some couldn't help themselves, others didn't care and simply rebuilt because they had luck, gift of gab and dedication to hit the phones. Not very efficient if you ask me.

Others were paying close attention. Which brings me back to the rookie. He began to sell himself as a "conservative" investor even though, if anyone bothered to observe, he was barely 27 years old and hadn't seen too many business cycles. Being conservative entails, in part, acquiring wisdom over a long period of time. In other words, you had to have been through a few bubbles and busts in your lifetime to really claim being conservative.

Above all, you needed to be disciplined. Getting caught up in the cattle hysteria and public group think is very easy to do. Even I, a deeply introspective individual, was slapped a few times.

My point is that it's easy to claim to be something (liberal, pragmatic, conservative etc.) when not severely challenged. This kid had no track record of any kind. How could he be conservative? And judging by how he ran his book, my suspicions were well-founded. Sure, he went "buy and hold" but he had to make up his loss of income somehow, right? So he resorted to flipping bonds and buying hedge funds.

Last, one day I passed by his office. He had a picture of Lester Young on his wall. I was surprised to see a jazz frame on the wall let alone one of Lester Young. The picture caught my eye because I happened to be a fan of his work with Billie Holiday.

So I stopped and asked him about it. "Who"? he said. "Oh, yeah. I love jazz". He didn't even know how great of a jazzster Young was. I had to add lack of substance to his repertoire. But he was no flash. He's still a broker. Why? Because he knows how to sell himself. Everything else is minor details.

I'll refrain from calling Obama a pragmatist. He's an unproven commodity for now. Moreover, his reputation as a liberal is well documented. His push towards the center is not surprising. But it's when he's faced with a real challenge we'll see which way the wind will take him.