My friends ask me all the time about the Fiscal Cliff. The assumption is that, as a person who watches these things, I am supposed to know what is going on. I don’t, I admit it. The most reasonable thing I have heard on the negotiations came long ago from a source I can’t remember – that the staffers had more-or-less worked out a deal weeks ago, and it’s simply down to the final posturing by their bosses before something is finalized.
That’s probably over-stating it a bit, but certainly once the election was over the relative strength of the positions was known and there was little point in “negotiating” any more. Politicians in high office don’t get there by being stupid (usually). So before we head into the endgame of the year, we can look back on how the Republican position became weaker and weaker – and why they will probably wind up caving on all the most important things before this is over.
The first piece of news that feeds into this is just a little bit surprising, given that the Republicans did hold onto the US House this time. Pollsters don’t just lose their jobs after an election, but move on to other things. The ones employed by CNN recent asked “Do you think the Republican Party is too extreme?” 53% said yes, while only 37% were willing to say that about Democrats. What makes this poll interesting is that 51% also said it is a “good thing” that Republicans do control the House, showing how much people trust either party in the end.
What should we make of the sentiment? Retiring Rep Dan Burton of Indiana is pretty sure. “Let’s say that we don’t do anything. (Voters are) going to blame Republicans. And then the president’s going to be the savior.” In other words, the more time goes on, the stronger Obama’s hand is. When one side starts to understand it is in a weak position, negotiations tend to go rather quickly. And so there will be a deal.
To understand how strong Obama’s hand is, we have to look at how he rather handily won the election. Nevermind Mitt Romney, a name you probably haven’t thought of for a month. Every re-election is, first and foremost, a referendum on the guy who is in power. As reported here for all of 2012, what mattered was job creation – and here is total US employment by the ADP report:
Barataria has shown this chart in various forms all year, and that gentle upward slope on the right keeps on keepin’ on. From the low point in January 2010, about 5M jobs will have been added by January 2013 – a rate of 1.67M per year. At this rate we’ll be back to “full employment” in 2016 – that is, passing the total before the official 2008 recession (shaded area) sometime in 2014 and filling out the net growth in population in time for the next Presidential election. Democrats, the trend is our friend.
As we’ve said before, there is only one thing that could possibly mess this up – and the public seems to understand the issue very well. As much as voters apparently like divided government, they don’t want it to be stupid. It’s a complex politics that is easy to mis-read, but it won’t be.
So how is that fiscal cliff thingy going? I am no longer worried. The Republican Party is skating on some very thin ice right now, kept out of the cold only by an apparent belief that un-checked Democrats are also trouble. If Democrats can start to sound positively reasonable who knows where we’ll go in the 2014 mid-terms? What we do know is that, if trends continue the President will look like a genius (not that he should really get that much credit). If the Republicans manage to look like complete idiots their tentative hold on some power might fall apart completely.
Dan Burton understands this. My guess is that a lot of non-retiring Representatives do, too. And that’s why we can expect nothing stupid to happen.
(or am I just being too optimistic again?)