Tuesday, June 19, 2012

Can you kick a cliff down the road? Let’s kiss and make up.


Have we somehow gone beyond rational argument? Have we taken differences beyond a logical extreme? Are we about to self-destruct for no good reason? These are the kinds of things I keep hearing. You have to admit that in the US, the so-called fiscal cliff borders on insanity. The news is that congress wants to kick the cliff down the road. Can you kick a cliff down the road? If Congress decides to simply extend bad policies until well into 2013 will that really be the best we can get out of these goof balls? Remind me please. How much are we paying these guys to jeopardize our futures?

Recall the hitch-hiking scorpion that stings the turtle in mid-steam and they both drown. As he is going under the scorpion admits that he had to sting turtle because that’s what scorpions do. But we are not scorpions. We are people. We have brains. It makes little sense to play games with the fiscal cliff if other options are available.

Obama supporters say that Romney is not good Presidential material. Apparently they think he was a bad governor and a mean businessman. Romney supporters say Obama is not qualified to be president. They point to the dismal state of the economy today.  But please! Argue if you will about their relative successes in life and their specific qualifications. But please, both of these men are running for president. Why waste time with hateful and impertinent allegations? This argument about qualifications has very little to do with solving our immediate issues.

We voters agree on a lot of important things:
·         We agree that too much national debt can cause economic problems. We also agree that tolerating recessionary conditions for too long can be wasteful and unnecessary. 
·         We agree that tax revenues are well below normal. We also know that government spending is decidedly above normal. We know that using one or the other in isolation to solve deficit problems is probably not feasible.  Raising tax rates will surely slow the economy. So will reducing government spending.
·         We know that many poor people have circumstances where government support is the only remaining option. We also know that there are also many people called poor who are not and who could probably live without as much government assistance. We also know there is inefficiency and fraud in many government programs.  
·         We know there are many people who need society’s help with healthcare. We also know that healthcare costs are rising at rapid unsustainable rates and severely impact people of middle incomes.
·         Neither party’s goal is to destroy America. Both want to see the country succeed in economic and non-economic terms.
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I could go one with the many more shared beliefs. We also cherish our freedoms, our great cities, our supportive neighbors, or brave soldiers and so much more. In addition, I think most of us believe it is a waste of time, energy, and emotion to argue at a feverish pitch while our problems just seem to get bigger and bigger. Both sides are dug in –come hell or high water.

Instead of acknowledging and emphasizing the validity of all these share beliefs, we seem to delight in picking one side as the winner and spend our time belittling those who chose the other team.  We have fallen to a point where we would rather jump into a heated fight than rationally, creatively, and dispassionately weigh the facts and find ways to accomplish our joint goals. It is fun to scream for your team at a football game.  But the morning after the football game means little to society while the morning after the next election can mean everything? Are we as dumb as the scorpion?

Hopefully I am wrong but it is difficult to see many leaders in either party earnestly trying to solve problems. Most have agreed that nothing can be done before the election.  They spend more time trying to shame their opponents than governing.  Does it make sense to pay them for the coming months as they avoid doing their jobs? How did we get to such a ridiculous position? What is the problem? Here are some very unpleasant realities to chew on…
·        
There are no real solutions to these problems. Society tries but will ultimately fail anyway. It doesn’t matter who leads the country next year – he will fail anyway.
·         There might be a real solution but it is very complicated. This recession is not your Mother’s recession. Americans cannot handle complexity. Americans respond only to colorful and brief sound bites flowing from the mouths of very attractive quasi-experts. 
·         Any solution will definitely create redistributions of income and/or wealth. Those who see this process going against them will fight for their assets regardless of any long-run benefits that might come to them and others.
·         The press earns money by selling advertising. The higher the pitch and the bloodier the fight the more soap gets sold.
·         Professors, consultants, bloggers, and other experts want to sell their time and words but realize that given the above it makes no sense to explain long trains of information and statistics that support complicated centrist positions. It is not easy to differentiate the professors from the 6 pm news.
·         Companies, labor unions, and other recipients of government largess support only simple positions that help them continue to receive targeted assistance.
·         More?

It seems pretty hopeless, except for one fact. If things get bad enough for long enough self-motivated people will begin to see that their own behaviors are self-defeating. Many people will discover a correlation between their own gradual economic demise and things like intellectual laziness, inattentiveness, selfishness, and politicians who seem never concerned about finding real solutions. This hapless recovery is not enough for most of us to see the landmines of our own ways. How much more will this country have to suffer before we get it? What disaster will have to occur before we elect people who will not feed this frenzy of ignorance and selfishness? Divide and conquer makes a lot of people rich but impoverishes the rest of us. That is, until we clearly see the game. Then, maybe we will have a chance and won’t need to kick cans or cliffs down the hill!

24 comments:

  1. Dr. D...did you join the Tea Party?

    I neither see the glass half full or empty because I see it with either enough to drink or not enough...there is a difference but that would take a long philosophical discussion.

    1. The pols will continue to kick the can until they see their easy income threatened by their removal from office....or by a bigger pol who is also a true leader. This may sound corny but thinking back after seeing those Queen Elizabeth pictures with each US president since 1949 I could only count 2.5 presidents who were leaders and redirected our country. Reagan and G Bush # 1. The .5 went to Harry Truman because he had to make some really tough decisions.
    2. You are right, those who see their assets being really threatened will find ways to protect them...maybe even revolution. Those who continue to suffer may find ways to get some of those other people's assets.maybe revolution.
    3. There must be a redistribution of $ to make things work better but it is the means of distribution that counts. See #2
    4. Those who suffer have no tools to make things better except complain. If those complaints get loud enough then the Pols usually give them some entitlements and try to raise taxes...or there could be chaos.
    5. Let’s face it; we need leadership that can embrace the needs of the country and not the needs of the lobbyist and other influencing factors.

    BTW: I thought the upcoming cliff was in November just before the elections. I guess it is time to start learning Greek.

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  2. James,

    The fiscal cliff has many parts -- Bush tax cuts, extensions of unemployment insurance, and so on. Most of this stuff happens in 2013. Not sure why you ask me about the Tea Party? They seem as disinclined to make real compromises as the others. They are part of the problem I alluded to in the post. I didn't really want to name names because they are just one of many factions.

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  3. "We are people. We have brains." Perfesser, you make a dangerous assumption.

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    1. Fuzzy, Do you prefer to model humans as scorpions? :-)

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  4. The cliff is the automatic cuts that will be made if congress does not do it themselves peior to the election. Yes the other stuff happens later ..maybe.

    Tea Party. You are alluding to some fo the TP's basic platforms...but I know you are not anywhere near as radical as they are sometimes.

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    1. James, There is no maybe when the cuts and other changes expire. They can extend them if they choose to but in the meantime we have many months of uncertainty as our politcians dither and point fingers. As for the Tea Party ther is no platform because it is neither a party nor a group owith homogenous beliefs. My list of things people agree with was meant to encompass shared beliefs among most people.

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  5. I've met a few scorpions I would trust more than a lot of humans. At least, I know the scorpion will stick it to me front, back, or either side. Too many humans wait until my back is turned to stick it to me. Which, leads me to comment about politicians. I wish they were more like scorpions. They tell us one thing then do the other. It puzzles me why we spent thousands of $$$ to try "The Rocket" for lying to Congress when Congress lies to us everyday.
    I am greatly disturbed....several folks want me to end the sentence right there....by the word we keep slinging around, "redistribution." Ms. Rand taught me that the word is progressive-speak, at best, Communist-speak, at worst. To paraphrase either Cheech or Chong...I caan't remember, dude.., "We don't need no stinking redistribution!" I agree that we need to help the destitute and to those who absolutely can't help themselves, but redistribution is basically taking from those who will and giving to those who won't. I'm agin it! Robin Hood was still a thief! We've been doing it too long, and the administration wants to bring it on in a much larger way. It's merely a tool to buy votes and has nothing to do with "social justice"......... another term Ms. Rand cautioned me about.
    "They" can keep "kicking the cliff down the road" as long as they want, but we're going to barrel off long before they think we are. Then, we'll all be using a Laurel & Hardy-paraphrased quote: "Another fine mess you've gotten us into, Barry...and W...and Bill...and George...and Ron...and Jimmy......"

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    1. Fuzzy,

      My point is that we have a shared value in this country that we can and should help some people. I didn't say how much we should help and I didn't define exactly who. Some folks want less and some want more. I see no reason why legislators could not come up with a compromise. While there will always be some people who disagree with any compromise, democratic government never is meant to satisfy everyone. Like you I read Ayn Rand and I worry that too much of the wrong kind of support can be counter-productive. I would hope that a compromise would take that into consideration. My point in the blog is that timing is everything now. Investors will not wait until the end of the year. We are in major doo doo if we don't make at least a little rpogress on deficits and debt in the next few months.

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  6. "We are in major doo doo if we don't make at least a little progress on deficits and debt in the next few months." The "doo doo" will happen. Progress? Not so much.

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  7. Fuzzy -- it is going to be a very interesting few months...to say the least.

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  8. Very interesting! Sorry about the T Party Platform remarks...I know you are not one of those...our local groups are really moderates. I am not a member though. As to the cliff...yes congress can extend the tax cuts...depends on the balance of R's and D's; yes there can be automatic cuts or congress can decide it is in their best interest to make their own cuts......typically picking on things that do not offend each others livelihood. Yes there are many people who need help to help themselves and that in my mind is the key phrase...learning and being able to help yourself but not getting expectations that the help given is forever and one does not have to do anything to receive it.
    The housing bust was an attempt by congress to get everyone into home ownership. However, that ended in burst bubble with all of those unqualified people is a worse position and a whole pile of speculators hiding on various Caribbean islands. The everyone needs to go to college philosophy has weakened secondary education and replaced it with imaginary degrees obtained from for profit colleges who are underwritten by huge student loans. ...and so on. So the phrase "help yourself" with help from the government is different that redistribution of income to all comers.
    Across world economic history governments that did not provide a infrastructure for a healthy middle class and allowed income to accumulate in too few hands have routinely been toppled by revolution. Keep in mind that revolution does not always come in the form of weapons. Ms. Rand pointed that out.
    When the middle class is not healthy a country is losing its best resources ...and tax base. We do not have dictators but in place we have very large to big to fail banks who have usurped power just by their global wealth.

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  9. Dear LSD . . . and fellows. I, too, wish we could all hold hands, get together, agree, compromise, sing Kumbayah, and stroll together into the sunset blissfully. But, that will call for accepting too little reduction in govomit spending, allowing those who don’t pay income taxes to keep the status quo, keeping too many people dependent on govomit, weakening our defense, and forcing those who pay income taxes to pay even more. That’s what compromise means and also what “paying their fair share” means. Compromise is code for more liberalism. Comprise is what Congress has been doing since Roosevelt. Compromise is what has gotten us to this dreadful situation. A compromise, now, even a little compromise, before we drive over the cliff or after – only keeps the day of reckoning just over the horizon.

    Everyone says we need an adult conversation about spending and revenue and/or that we need to elect “responsible” people who will make those “hard” decisions. Puke. A lot of folks say we can’t afford to reduce govomit spending or be austere because it likely will further damage/impede economic recovery. Of course, compromise is code for just slight reduction of govomit spending or micro degrees of austerity. More puke. Instead, we need more pizza and beer.

    For sure, if the fake is re-elected (and particularly if the Senate remains D) there will be more Congressional stalemate . . . a true lame duck likely to continue circumventing Congress, and making fertile the possibility of incremental and small comprises to avoid the day of reckoning. If Romney is elected (and particularly if the Senate becomes R), the likelihood of stalemate decreases and the likelihood of bigger (more favorable) strides in tax reform, entitlements, SCOUS, foreign policy, and regulations increases. If the fake is reelected we will be locked in this groundhog day of déjà vue bickering and extremes and small, incremental, meaningless compromises keeping us anxiously looking for the day of reckoning just over the horizon.

    The day of reckoning is not that far over the horizon, however. Nov. 6th is the tipping point. That’s the day I hope that I will find that the principles of smaller govomit and less govomit spending, less entitlement, and greater self reliance will no longer be compromised. Compromise is a fine word and desirable outcome, but it has not served our country well.

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  10. Dear Charles, I was wondering when you would get into this. You have been quite consistent on this point and you are not alone. I hope some others get into this because there are a lot of issues here it will be interesting what other folks add...

    First, my point in the blog is that if no compromise is found in the next few months that believably deals with our debt, the vigilantes are going to come after us. I believe that and I worry that lack of compromise will cause another deep recession as interest rates are driven up a la Spain. It won't much matter who is president if the US loses its save haven status.

    Second, while I see what you mean about how compromises have weakened this country, I am not entirely convinced you are right. Yes, government is too big. But I am not sure what size government you want. Therefore I am not sure how many people you represent. Do you long for a government that is 5% of GDP? 15%? Is the kind of government you want really obtainable today?

    Third, while it is true that some people won't want to compromise enough -- as you say some people won't put a real crimp in government spending. That's not a compromise worth having. Just because I say we need a compromise does not mean that I would sign off on any compromise. But it would be interesting to see what happened if both sides really tried.

    But I am not so goo-goo-eyed that I believe it will happen. I think we have enough people who will not even try to work this out and the only thing that will happen is another deep recession. Maybe after 10 years or so of horrible economic growth some people will be willing to seriously negotiate.

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  11. Compromise? Could be code and then again it could be the active discussion or Congress needs in front of the cameras. No, not many citizens will understand the need since their education is poor and they for the most part are like lemmings. Do not take my Kodachrome Away - Paul Simon 1966. But on the other hand we have no dictator so solutions have to be found the rally work...that is my party "RW". Of course there is the issue of the livelihood of the congressmen and women who may or may not be elected next term.

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  12. Dear LSD. If a ten-year recession occurs we will deserve it. I believe that occurrence most unlikely because the private sector will prevail (because the Fake and Bernanke have run out of public sector solutions . . ), albeit the US will be weakened economically severely, as will all other economies. Ideally, in the ashes of a ten-year recession the world will realize that govomits cannot simply print commerce and that the unfettered private sector is the only solution. Yes, most ideal.

    I will not follow down the rabbit hole of speculating the optimal size of govomit per GNP. Historical ranges provide good limits and I think govomit/electors should abide them . . . we are now way above the sustainable upper limit. Is a reasonable limit obtainable today . . . in a few months, years . . ? yes. We don’t have a revenue problem; it’s spending. I think you agree. Attainable? Only if Nov 6th results in a R landslide. Otherwise, cash out and buy guns/ammo . . . lots of it.

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    1. Charles, you raise what is exactly the challenge here. You say you want an unfettered private sector and you want government spending taken back to some historically correct amount. But even conservatives cannot agree on the details. Adam Smith did not agree with unfettered -- because he didn't trust business any more than he trusted government. He saw that some balance was necessary. Exactly how much regulation of government is not easy to resolve. The same goes for government spending. The trend has been rising for a long time. Some conservatives might want to go back to spending as it was in the 1920s. Some want it back to what it was post WWII. And then there is the issue of timing. Some folks think you could exact a spending solution and it would have only minor negative impacts on the economy. Other conservatives would prefer a more gradual approach. The result is that even the "good" guys can't agree -- and that's why I think a compromise makes sense. There is no single take-it-or-leave-it conservative position.

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  13. Lar, you are, once again, correct. There will be no viable compromise because too many Rs just want to see Obama fail...should I have said "fail more"...and will do whatever it takes to stonewall any attempt to reach an agreement. Some Ds have the same mindset. They want something to blame on the Rs...plenty of ammo there... Forget that they had a majority in the House and Senate from 2007 to 2010 and still didn't pass anything but the horrendus healthcare debacle.
    Both sides of the aisle have compromised to be intransigent. They will sit in the back of the bus and point fingers while the driverless bus keeps careening toward the cliff which is being kicked, along with the can, down the road.

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  14. Fuzzy and James, the only solution is JD.

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  15. After checking the markets yesterday, I can't afford JD. Old Crow may have to suffice.

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    1. Do they even brew that stuff anymore? Thought it went the way of the brontosaurus.

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  17. Dear LSD. I don’t recall saying I want an unfettered private sector, nor do I recall saying I want no govomit. Just for fun, let’s say I want to roll back all the legislation/regs – all of them – including Obummercare and Dodd-Frank (all EPA) – passed/promulgated during Obummer, plus Graham/Leach/Bliley, and reenact Glass-Steagall. Libs/Progs can keep the rest as is. There! That ought to do it. How ‘bout that for a frigg’n compromise?! Then we'll negotiate tax reform!

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  18. Charles, that's the spirit of compromise!

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