Home » Money » Nothing Stupid. Right?

Nothing Stupid. Right?

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.

boehnerThe 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:
ADP07-12
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?)

Advertisements

11 thoughts on “Nothing Stupid. Right?

    • The final package will have to include Dems. And Boehner knows it now. This was a test vote and they couldn’t even get it to happen. Think about all the Wall Street guys who gave many digits who are making phone calls late into tonight – they won’t let this go.
      It’s just getting interesting, is all.

    • Their hand only gets weaker with time. Enough of them know it that, with Dem support, there will be a deal. But Boehner has now been locked out and is very weak.
      I didn’t predict what happens after this because I really have no idea. Will Boehner get bounced? It’s unlikely, but he is looking pretty bad about now.

  1. We need to put things in perspective. In the Greek Republic, 5th century BC,
    Pericles had this to say about democracy:

    Our constitution does not copy the laws of neighboring states; we are rather a pattern to others than imitators ourselves. Its administration favors the many instead of the few; this is why it is called a democracy. If we look to the laws, they afford equal justice to all in their private differences; if to social standing, advancement in public life falls to reputation for capacity, class considerations not being allowed to interfere with merit; nor again does poverty bar the way, if a man is able to serve the state, he is not hindered by the obscurity of his condition. The freedom which we enjoy in our government extends also to our ordinary life. There, far from exercising a jealous surveillance over each other, we do not feel called upon to be angry with our neighbor for doing what he likes, or even to indulge in those injurious looks which cannot fail to be offensive, although they inflict no positive penalty. But all this ease in our private relations does not make us lawless as citizens. . . . Our public men have, besides politics, their private affairs to attend to, and our ordinary citizens, though occupied with the pursuits of industry, are still fair judges of public matters; for, unlike any other nation, regarding him who takes no part in these duties not as unambitious but as useless, we Athenians are able to judge at all events if we cannot originate, and instead of looking on discussion as a stumbling-block in the way of action, we think it an indispensable preliminary to any wise action at all. . . .

    In short, I say that as a city we are the school of Hellas; while I doubt if the world can produce a man, who where he has only himself to depend upon, is equal to so many emergencies, and graced by so happy a versatility as the Athenian.

    • Amen. It’s a great standard to live up to. I do see a lot of openness so far in these negotiations, which may actually be hampering them (though I took it as a sign that this really was just the posturing phase and the work was done). But they are engaging people in the hard decisions that they are making.
      And that is very good, no doubt. We have to keep talking (see next response) and we have to have a clear, open understanding of our priorities as a nation if we’re going to meet them adequately.
      So, yes, this is the messy part. I really think it’s going to get messier yet. But it’ll work out. 🙂
      Thanks for that perspective, it’s a good one!

  2. I think you are optimistic but it is also hard for me to image that they don’t at least delay the cliff. All they have to do is pass a bill that extends everything a month and then the new congress can take care of it. I am sure they will do at least that.
    When you first called this a political problem it didn’t set well with me but I think I understand it now. They don’t have to do this in a week or two, they can do it right with a new congress and that might go better.

    • Yes, and yes! I used to think a grand compromise was called for here, but the more I think about it taking care of some of the details and then committing to a bigger deal over the next few months is ideal.
      Or they could just punt completely – Wall Street may not like what you propose, but this calls for a lot more discussion than we’ve had. I feel like we only really got started in December – but it’s been a fun ride since then. 🙂

  3. I also do not share your optimism. But it is good to hear there are options even if they do ‘punt’. That might be best. Boehner really embarrassed himself with his Plan B and that does not bode well for the Republicans. I bet they get more desperate with time so we’ll see what they come up with if anything.

    • There is a lot more drama coming up in the next week. I wrote this post so that it will explain what happens in the end, not right now – and thus will stand up to time a bit better. It’s part of my tagline – “I don’t break news, I fix it”. 🙂

  4. Pingback: The Small Story of 2012 | Barataria – The work of Erik Hare

Like this Post? Hate it? Tell us!

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s