Tuesday, February 18, 2014

Don't Rock the Boat

The catchphrase for 2013 and 2014 should be from the 1973 Hues Corporation single – Rock the Boat. The phrase is Don’t Rock the Boat. To remind you of this great song you can go to this link and see it performed (http://www.youtube.com/watch?v=dndAXxqJbc0 )

Great words to this tune-- So I'd like to know where, you got the notion
said I'd like to know where, you got the notion to rock the boat, don't rock the boat baby, rock the boat, don't tip the boat over, rock the boat, don't rock the boat baby, rock the boat-t-t-t-t

Anyway now that I have you tapping your cane, you have to admit that Don’t Rock the Boat fits perfectly into our general situation. Our government recently passed legislation that can only be described as a two-year effort to postpone real progress on, err, anything. It didn’t address budget deficits. It didn’t address income distribution. It didn’t address long-run entitlement reform. It didn’t address immigration. And the Fed announced the beginning of monetary tapering. But the actual amount of tapering could have been lost in an ant hill. It was like you announcing to your spouse after washing one fork after the family Christmas dinner that you are serious about doing the dishes every night in the future.

Think about it. Our collective mantra today is not to rock the boat. And maybe that is understandable. Our boat got really rocked. The year 2007 began a voyage in very choppy waters. There were times when we were not sure if we would survive. But we hunkered down and we bailed water and now that storm has passed. One does not have to be an economic expert to identify how shell-shocked we were – and still are. Painful memories remain and we find ourselves in a leaky vessel with much that needs to be fixed.

But the remedies to the existing problems seem to be about as destructive as the storm itself. Every single important policy solution amounts to salt in a wound. This painful policy process is not new. It is virtually ALWAYS the case that policy intends to benefit the so called greater good while admitting that some will be harmed. Today, however, the problem is worse because so many people feel that they bore the burden of the last years. They do not want to bear any more. They choose to live in a broken boat because fixing the boat will hurt. Make the hurt go away (which reminds me of the song Make the World Go Away)!

Think of all the policy areas where we have made no progress and where solutions seem distant because we don’t want to create negative impacts on anyone. Immigration policy could make it harder for some people to stay in the US. Entitlement Reform would mean that some people will have smaller future pensions or weaker healthcare plans. Social policy changes will mean that some people will find it harder to afford food and shelter. Tax reforms would eliminate tax preferences and raise income tax bills for many people.

Expecting people to want change and reform right now, therefore, is a little like asking an airline crash victim to fly to Sochi for the Winter Olympics. That outcome is pretty unlikely.  In the meantime we might admit that we are in rehab. If you have been in any sort of rehab lately you know several things. First, you are not going to get better without a little pain. Second, you expect that while the healing process will be tough it will be over someday. Third, you will get back to life more or less as it used to be.

If you buy this story about Not Rocking the Boat and rehab, then you believe that today’s frustration with policy may last a bit longer but that the pain will eventually end and we can look forward to a time period when government begins to function. 

While restoration of the policy process sounds optimistic it does not necessarily mean we are up to the task of fixing our problems. So it could be a bit longer before you see any difference. But even then, ideological differences will remain and it is safe to say that our economic challenges are both wide and deep. Rehab might end but then there is dealing with the real issues we face. Back to normal means rehab is over but normal does not imply a rebirth of sanity in government.

8 comments:

  1. Dear LSD. It’s curious that somehow—like a boomerang or déjà vu all over again—that U.S. economics/econ policy comes back to and/or is connected to politics/legislation. Like Krauthammer writes, nothing matters until you get the politics right. Yes, D.C. is broken, dysfunctional—and as has been shaken (not stirred) many many many times over before—is incapable of righting the boat as long as gridlock controls. Any compromise resulting from the existing composition of WH/Senate/House cannot materially benefit the country as a whole since compromise over the past 50 or so years—generally—has not boded well for the country—has not resulted in a sustainable, strong, robust country reminiscent of the 50s/early 60s. Certainly, the compromises of the last 5 years (or lack thereof) have not materially improved the overall welfare of the country.

    Certainly, macro environment and economic conditions have contributed to ‘merica’s weakening trends—but the process of dealing with those conditions has been policy—compromise. Had compromise focused more on maintaining/strengthening things that matter—like education, jobs, military, trade, national debt—we wouldn’t be facing the prospect of a diminished/diminishing USA. If it’s a grand compromise—as the defining metric that D.C. is actually accomplishing something—that is asked of Capitol Hill under the current political composition then you can only expect more of the same watered-down stuff that has undermined the potential of this country for sustainable greatness and world leadership.

    Yes, tough decisions are needed—but one party shuns that reality. As long as compromise is the accepted operative process then we must be accepting of the downward trend of this country’s greatness. Continued compromise = > mediocrity. Compromise is not destiny, is not written in stone—it is a choice. I cannot see anytime soon voters choosing to rehab Capitol Hill—e.g. the next several elections, or ever. To get the politics right the voters need to get it right—to make the right choice. It’s not the pols: It’s the voters.

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    1. Charles, I think we came to the same points last time. If I get your drift you think that if Republicans get power then things will improve. But we have a two-party democracy in which one party hardly ever gets power for very long. Thus I don't see how if the Rs got more power today they would maintain it long enough to make a difference for long enough. I agree it is the voters and it is the voters who, as the past shows, won't sustain a R majority for very long. So there we are. We have a government that gets bigger continuously -- sort of like a runaway mine car.

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  2. People want change. They just don't want it to affect them. It's the same reasoning that goes into "Vote the bums out!" Your congressman/Senator is lousy, but leave mine alone."
    I suffer greatly from PTSD...Pelosi Traumatic Stimulus Depression.

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  3. Dear LSD. My drift is that with a R majority/trifecta there is at least a possibility of getting the politics right. With a split Hill there is absolutely no possibility. It’s likely even a R trifecta won’t last long enough to enact laws/policies that make a lasting difference—to right the ship. History shows only a small window where one party sustains the majority. But, if a R trifecta can sustain long enough to move laws/policies in the right direction—and folks get jobs that offer an opportunity to gain wealth (impossible with Ds and compromise) and general economic conditions don’t deteriorate too much—then maybe, maybe, voters will see benefits in having Rs.

    The runaway mine car is not laden with coal/commodities. It’s full of pork and candy/goodies to which the Ds have ddicted the voters. Hm-m-m-m-m, lemme see, vote for good-paying yobs and self-reliance or for the candymen. It’s a choice.

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    1. Sounds like you are the optimist now. :-) History suggests there are few time periods when Rs made lasting impacts in the direction you desire. Doesn't matter what is in the mine car -- if government continues to grow then these problems associated with too much government will not abate. What I am suggesting is that while Rs might seem like the party who will brake government growth, the truth is that they have never been effective at that. The truth is that government feeds on itself. It will probably take a revolution to slow things and even that would only reverse course for a little while.

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  4. Dear LSD. So who is now the optimist and who is the cynic? :-) I volunteer to play the optimist hoping that should voters taste the benefits of (even nominal) R trifecta govomit they’ll ‘ventually see the light and drink the enlightened Kool-Aid . . . and keep pulling the red lever. I say those acquiescing to ground-hog-day déjà vu compromise are the cynics.

    That govomit feeds on itself likens to the perpetual motion machine . . . an impossibility in nature, of course . . . since there is no external source of energy . . . unless of course one implies infinite OPM aka the Fed’s perpetual ATM machine and prodigious candy-making and distribution (oh, what would Michelle say?).

    So, to expire/retire the perpetual motion machine either the ATM machine must run out of red ink or there must be a revolutionary R turn-out in succeeding Novembers perpetually. That would stop and desist candy production and distribution, eh?

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    1. Charles -- looks like you are hooked on hope and change! :-) Government growth is a perpetual motion machine that works as long as people, companies and a wide range of institutions believe they can get favored while other people help pay for it. Yes, money helps grease the skids...Unlike physical machines -- this one exists but can be derailed by social revolution.

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