No Deals on the Fiscal Cliff

The chattering classes in Washington DC continually re-enforce the conventional wisdom – as they see it.  Very few of the pundits want to posit outside of the bands of convention.  They have convinced themselves that there must be a deal to avoid the fiscal cliff because the “kabuki dance” President Obama and the Speaker John Boehner are engaged in is the way negotiations take place in Washington D.C. The days of kabuki dancing did are over.

During the first Obama administration, the President did not come to town to dance.  He came to solve problems. He listened to differing sides of issues and incorporated what he believed was the best parts of all sides into his policy recommendations and tried to move forward.  For example, he included significant tax cuts in his original stimulus package proposal to incorporate positions taken by the political right and he included significant funding support for state and local governments to incorporate positions taken by the political left.

He reduced the amount of infrastructure spending to tamp down concerns over the deficit.  He got no support from the right and begrudging support from the left.  He supported a conservative position on the mandate for insurance coverage and left out a public option in the Affordable Care Act, but he included an expansion in Medicaid to address liberal concerns.

Again, he received no support from the right and begrudging support from the left.  These are examples of compromises that kabuki dancers end up with.  They are also examples of how the conventional policy decision making process in Washington DC, ends up producing common bad policy.

The President has thought this dance thing out over the past year and maneuvered the dancers onto the floor where they will have to dance to a new tune – good policymaking.  It makes little sense to allow a smaller and smaller percentage of the population to concentrate more and more of the nation’s wealth into their hands.  What kind of nation will we have when six people own everything?  We will be Italy not Greece.

When I visited Italy last year, our tour guides had doctorate degrees and were getting by on tips while living in apartments built two hundred years ago by the same families who own them today.  In the meantime, in the harbors, the wealthy people were lying on the decks of their yachts sun bathing.  The street and roads were terrible and I only drank bottled water.  We cannot let our nation crumble so the rich can have more.  We must invest in the future, bring more equity and opportunity to more people and whether we walk over the cliff or jump off the cliff, we are going into a new world, there is no looking back.