“Indeed, a reality has become too obvious for the world’s dazed inhabitants not to notice: The greatest threat to the upward arc of human progress is the collapse of public policy making. That is the biggest cliff of all. Governments are giving government a bad name.”
Daniel Henninger, Wall Street Journal, 12/26/2012
Bluff or cliff? We may be about to find out. As the end of the year looms, the likelihood of a broader solution continues to shrink. While the day-to-day discussions remain important, the quote above speaks well to the larger challenge; the government isn’t up to the task of governing. One observer of the budget negotiations in November optimistically opined, “One factor working in the favor of compromise is all the principal actors are in their same positions.” Foolishness. The sentence would have been better written, “One factor working against compromise is all the principal actors who couldn’t reach a compromise the last time are in the same positions.”
Public policy involves compromise and negotiation and it requires them to be done well. Today’s participants seem to lack this skill. John Boehner’s attempt at a “Plan B” served only to show that the Republicans aren’t supporting Boehner as their negotiator. President Barack Obama doesn’t seem to desire a bipartisan compromise. If he did, his negotiations with Boehner would have been more focused on generating a bipartisan deal rather than leaving Boehner with few points on which to claim victory.
Regardless of the short-term outcome, the fiscal negotiations provide further evidence of a government struggling to do its job and introducing unneeded risk into the markets and the economy. The good news is the key participants will continue to get practice in the art of compromise. The U.S. government will bump up against the debt ceiling on Monday.