Fool me once, shame on you; fool me twice…

The “supercommittee” admitted defeat; it won’t have a blueprint for reducing the nation’s deficit (stories here, here and here).  Is this a bad thing?

Some have argued, no: the first direct result of getting no plan from this committee is that the law which authorized it will now automatically cut $1.2 trillion from defense and non-defense spending over ten years starting in 2013, and that may end up giving us more deficit reduction than we’d have gotten otherwise.  No way to know for sure, of course, but it makes sense.

I mean, there’s no reason to believe that the same members of Congress who thought nothing of threatening government default for political gain this past summer were likely to come to any agreement now, not when the party that controls the House (and virtually controls the Senate with the threat of filibuster) is still holding its breath threatening to turn blue rather than be responsible and discuss the best ways to increase revenue as part of the answer (along with spending cuts and overall economic growth) to getting the federal budget on a healthy path.  None at all.

To believe otherwise would mean, first of all, believing that the sheep people lined up behind Speakers Boehner and Limbaugh have any goal more important that the defeat of President Obama.  They don’t, unless it is the personal destruction of Obama, and anyone unlike themselves.  Second, it means they would have to have the backbone to say no to the no-tax extremists and the campaign contributors.

I read an interesting article making the point that we’re foolish to think that our elected representatives will do anything that makes sense for us, because they’re in place to serve their bosses: namely, the minority of the population who actually vote in the primaries, and the even smaller percentage of the people who pay the bills through campaign contributions both above and below board.  (By the way, read Michael Moran’s piece setting the stage for his blog The Reckoning.)

The other thing to watch out for right now, though, is the cowardly Congress finding a way to back out of the deal it made with itself!  No Congress can pass a law that would prevent a future Congress from unpassing that law; just because it set itself this deadline and mandated future budget cuts as a penalty for failing to meet that deadline can’t prevent the next Congress from overriding all or some part of the threatened budget reductions, and that’s entirely possible for a group that already can’t say no to anyone (which is a big part of what got our budget in this mess to begin with).

Give some thought to Moran’s suggestion: in times of crisis, what if we take control away from politicians and give it to people who know what they’re doing?

A real super-committee – a real committee not only empowered to take the steps necessary to right the American economy, but competent to do so – would include 12 serious thinkers. They might include policymakers like former Fed Chairmen Paul Volker or (the suitably contrite) Alan Greenspan, economists of left and right like Stanford’s John B. Taylor, Yale’s Robert Schiller, NYU-Stern’s Nouriel Roubini, plus a few representatives of labor, small business and capital – let’s say Robert Reich, Joseph Schneider of Lacrosse Footwear, and Warren Buffett, just for kicks. No investment bank chairman, please, and no one facing reelection.

Can you imagine this group failing to come up with a solution? Can you imagine any of them worrying more about the next election than the future of the world’s largest economy? Certainly, they would clash – perhaps over the same tax v. spending cut issues. The difference: they would understand better than any member of Congress that no solution is far worse than a less-than-perfect solution.

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This is our time

To call for sacrifice, the president will have to be willing to make a sacrifice himself.  Obama can offer his own political career. He can put his reelection on the line. He can make the 2012 election a national referendum on doing the right thing.

Evan Thomas, Newsweek, Nov. 13, 2010

George Bernard Shaw suggested that “If all the economists were laid end to end, they would not reach a conclusion.”  I prefer the rephrasing (source forgotten) that if you laid all the economists in the world end to end, they’d still point in every direction.  Like me, trying to figure out what to make of the budget compromise in Washington, D.C.

President Obama and the Senate Republican leadership agreed on a two-year extension of the Bush tax cuts, including those for the highest-earning Americans, in exchange for a 13-month extension of unemployment benefits and a temporary reduction in payroll taxes.  Is that good or bad?  Sounds like it’s good for the highest-earning Americans and the people who’ve used up their state unemployment benefits, at least.

Do you go with the argument that Obama is too reasonable for his own good, and that although he gave in on something he wanted in order to get something else he thought was more important right now, he’ll eventually have to say no to his political opponents or he’ll never get what he needs to deliver on his promises?

How about the argument that Obama’s emulating President Clinton by siding with “the people” rather than with one party or against the other, hoping that in two years the people will hate both parties enough to vote for him?

There’s no guarantee Congress will sign off on the deal: do you wonder about the fact that the GOP leadership doesn’t have all its ducks in a row to support this compromise, precisely because it will increase the deficit by hundreds of billions of dollars, especially one leading quacker who supported Tea Party favorites over establishment Republicans in the last election and might have some sway over new members?  Is it at all concerning to you that the White House finds it necessary to “warn” Democrats that not supporting the compromise could revive the recession?

Are you persuaded by the argument that this compromise, in which neither side made a truly painful political concession, means that no one in Washington is really serious about doing anything about the deficit right now?

I’m persuaded by Clarence Page’s conclusion that both sides are putting off the bloody fight until spring, when they’ll have to make a decision on raising the national debt ceiling—nothing focuses the attention quite like impending doom.

Whether the big fight happens then, or sooner or maybe later, I think I’d like to see what Evan Thomas suggested: that Obama take a stand—and yes, stake his presidency—on a call for Americans to make the necessary sacrifices to save ourselves from catastrophe.

…being honest about the real choices is the only way Obama can break through the noise and chatter. It is also absolutely necessary to save the country from very hard times ahead, or at the very least a steadily declining standard of living. Obama needs to start by explaining the mess we’re in.

Presidents have an ability to go to the people and ask us for what we wouldn’t choose to give.  And Americans stand up for their country, and for each other, in the face of a common enemy, whether we voted for the guy in the White House or not.  This could be our time to find out who the real patriots are, if only our leaders are strong enough to ask us to stand up.