Wednesday, October 16, 2013

Ignorance of the law(makers)

Has a group of people paid nearly $175,000 a year plus benefits ever been so consistently disappointing as the US Congress?  I imagine professional sports fans could be disappointed with their team for years (Cincinnati Bengals) and those guys make way more per year, but those players can't, no matter how bad they perform, cost you your job, your retirement or your peace of mind.

Today, October 16, 2013, to much media fanfare, the US Senate agreed to pay the bills it and the House of Representative had already incurred.  Before the bills get paid though, the House of Representatives, replete with the Burn The House Down Party, has to agree to the plan.  

A shutdown, slimdown, slowdown, downtown, clown around, vacation-because-they-get-back-pay- furlough did nothing positive for any American.  In this case, really, nothing.  It did not change US policy on any point.  It created no new rallying point for Americans.  It did nothing to engage Americans as a whole in a positive way.  It did allow for a lot of criticism and hate spewing back and forth.  The edge of default dance has weakened the credit of America to Americans and to foreign buyers of American debt.  Count on that.  Interest rates will rise and the Federal Reserve will be powerless to stop them.

The name calling and bashing of ideas on the news and the Internet, from both sides of the ACA/Obamacare crowd, have been frighteningly reminiscent of the vitriol that caused the US to have a civil war.  The north is again pitted against the south on many issues.  It's fitting that the first black president is under fire from a bunch of white, southern men, for advancing what he seems to believe is a right inherent in a civilized nation - decent, affordable health care for all.

One has to wonder though, if someone has not watched this drama unfold on TV or in the news, will they be affected by what happens on Capitol Hill?   I don't know.  It seems that for all the sturm and drang cranked out by the finance talking heads, the world would not stop if the Congress failed to agree on this point. 

My sense is that the sun would come up tomorrow no matter what happened today.  Tomorrow may be better or worse than today, but it's going to come.  I hope that come November 2014, a Wednesday dawns with 355 brand new congressmen and senators and leaves 66 senators quaking in their wingtips.

  



Tuesday, October 1, 2013

Government shutdown? No surprise.

Today, October 1, the US Government ran into a self inflicted partial shutdown.  People who had no ability to avoid it will be laid off without pay.  The men and women who could have reached agreement on a budget, imperfect as it was, but who failed, will still get their $174,000 per year.

Congressional representatives and Senators are without risk. No skin in the game.  They redistribute other peoples money, not their own.

I trust that this shutdown, on the eve  of the US Government 's need to borrow more money to pay for its endless stream of spending, will cause more negotiation turmoil.

Every pundit and talking head rejects the possibility that the Congress would renege or be untimely in its duty to pay vendors and borrowers.  But those same experts predicted a fed taper that did not happen. They predicted that Congress would avoid a shutdown.

When everyone agrees, it really is a signal to take the other side of the argument.

There may be optimism for a quick solution, because the tea partiers failed to defund Obamacare with the budget.   People will hope that the TP will concede and be reasonable.  But why?  If they were acting on principle and got this far, why would they back off?  In for a penny in for a pound.  Principles aren't for sale.  Even Bloomberg agrees with me in an article posted after this post:  "Congress misses the short putt, and debt relief is much more difficult"

They will be cheered by their true believer constituents and will be rewarded with contributions.  They will be urged to keep up the pressure.  They can say we did not concede our demands and we won't.  Default or not we cannot accept universal health care for all Americans.

I believe that the US will fail to get a debt ceiling deal by Oct. 17.  I also believe that Obama will concede something big immediately after.  He will because he cannot have the US fail on his watch.

My bet is against the pundits and the consensus.  Interesting times indeed.