Dratted Deadlines Demand Desperation

Why, oh why, do we let ourselves get in these pickles where we begin to seriously worry that our leaders will take us over the cliff into an abyss of horror, fear and calamity?

Only a few times in our history have we as a nation acted stupidly and irrationally when a large proportion of our population knew perfectly well what was going to happen. One of those times was in 1931 when our Congress took the bit in its teeth and charged forward with the now infamous Smoot Hawley Tariff Act, which ended up with literally hundreds of specific amendments “protecting” from foreign competition many different products that were suffering from the after effects of the crash of 1929. As that bill was being debated, thousands of economists and business leaders from all over the country signed newspaper advertisements that basically said “Do Not Do It – it will be the death of the economy!” Boy, were they right. But the bill passed; President Hoover signed it; and within 18 months the volume of world trade had declined by one third. The depression then set in for good in a big way. The rest of that long story is well known history.

Today we are poised at the brink of something quite similar. The wisdom of the knowledgeable is not seen in newspaper ads, but it is all over television and the news that allowing a default in debt payments surely will bring down the wrath of the gods and send us into another real depression. It appears that the public “gets it” and does not like it. Yet a few of the negotiators in the Congress persist in thinking they know better and seem willing to risk everything to score their points and get their way.

It seems like we have gotten into a syndrome of “deadline-itis,” whereby massively important public issues can only be resolved at the brink. How did that happen? Perhaps it is explainable by the intense amplification of big news in an age of instant exposure, to the point that the players of the moment become larger than life in their own eyes and think that at the end they may emerge as saviors of some sort. They appear to have lost perspective and in the process the national interest disappears and is replaced by a game of putative political winners and losers, wherein the real stakeholders — the public — get completely lost in the shuffle.

The only real hope left is to cling to the belief that rational leaders do not act irrationally. And, we do have a president who begins to show a talent for knowing how to rescue a problem from the jaws of a deadline by staying cool, in charge, on top of the narrative and ready to pounce on a compromise at the last possible moment. He did it last December when he emerged with a grand compromise of elements of key taxes which were about to expire or explode. We must hope and believe he can and will do it again now.

So let’s look ahead for a moment and ask — assuming we emerge intact from the current mess- – how can we avoid these problems from constantly recurring?

An answer in part may be that we need a joint Presidential/Congressional Commission to look at the structural/procedural process by which we as a nation address these kinds of situations and questions. We could not be doing it worse than we are doing it now. A quiet, serious discussion among experienced grey beard leaders may not reveal better substantive answers but can surely suggest better ways for today’s leaders to go about conducting the public’s business.

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Our Human Anthill

I’ve been wondering a lot lately about how and why our fellow Americans are incapable of collectively making sense out of the nonsense that swirls around us, particularly in the gridlocked political arena.

The other day I was stuck in traffic at a busy corner in mid-Manhattan and watched what looked like thousands of diverse people trying to deal with heat, in various states of undress, going in every imaginable direction through crowded sidewalks and streets. I was struck by a childhood memory of a sand-filled glass box in my home in which an uncountable number of ants lived, worked and went about their seemingly endless lives.

Also in the last weeks, a brilliant Foreign Service officer, Larry Eagleburger, who became Secretary of State briefly at the end of his long, distinguished career, died. His well-deserved obituaries omitted one thing, which stands sharply in my memory of my experiences with him. He frequently said that in dealing with nation-states it is common that even the biggest experts can not foresee well or accurately how such states will act under stress and other difficult circumstances. And, he had a simple method to discern how they might behave. He transposed the states into children in his mind and asked himself how children would act and behave in similar circumstances. He was convinced that he got quite close to the right answers in most cases.

Despite his success with this method, it probably would not be safe for most people to try to employ it in their own lives because Larry was a supernaturally smart, insightful guy whose mind could penetrate knotty problems; he probably simply used the device to express how he reached his conclusions. That said, the tool can bring a useful perspective to assessments of large-scale human entanglements, even when substituting ants for children.

The mental pictures of the Manhattan intersection, the glass anthill and Eagleburger’s conception of nations behaving like children (read ants) merged in my admittedly strange mind and I began thinking about human ants and how and why they behave differently from ant ants.

We think sometimes that the roughly seven billion people that inhabit the earth today are a lot of people. They are, but I wonder how many ants there are on the globe today. Probably there are multiples more ants than human ants.

We know that every human ant is more or less created equal (in today’s world though not always in yesterday’s); they all have dreams, hopes, aspirations, fears and various degrees of talent.

We really do not know much about the individual mental processes of ants. But, we do know that ants collectively are not random creatures. They definitely respond to leadership and various forms of organizational structure. It appears that they have some concepts of space management and architectural design in utilizing the spaces they occupy. They also definitely have a life cycle and they recreate–which some say is the most important, exciting thing in their lives (and why not?) – and expand and populate the way human ants do. How they deal with conflict and confusion was opaque to me as a child. But, they always seemed to be optimistic and on the march toward what they evidently saw as a bright common future.

So what is relevant about the differences between human ant behavior and ant behavior? Perhaps it is ego? Where are you when we need you Dr. Freud? Ego surely has a lot to do with individual and collective human ant behavior. That said there does appear to be something like ego among the leadership behavior in the ant world as there is also with bees.

So what can explain why and how human ants these days seem to be bent and determined on various forms of self-destruction? I hate to think that ants are smarter than human ants and can foresee or sense danger in their mass behavior better than humans. Perhaps the distribution of ego, freedom, greed and self-determination in the ant world is rationed and apportioned in some amazing way that provides an instinctive sort of group self-protection.

What can we humans learn from our ant friends? Applying the Eagleburger test suggests that if ants can come to their senses and avoid self-generated destruction, that same natural phenomenon could occur among humans. I am not so sure, however, that we can count on that because perhaps our overdeveloped and widespread human thinking capacity causes various forms of denial and wish fulfillment to interfere with our senses of danger built in from our most primitive days.

Perhaps, if more of us stopped and reduced our thinking about the world around us, if only for reflection purposes, into terms as basic as is suggested by our ant friends, we all collectively might better see the real world and all the dangers it contains that truly threaten our very existence.

Maybe ants outnumber us by such large proportions, not just because they are smaller, but because they still can sense danger more acutely?

Timing is Everything

One of the largest looming problems in America today is the debt ceiling and of the associated long- and short-term budget deals. Now that the Bin Laden bogey man is at long last laid to rest, the relentless press is chomping away at President Obama’s failure to make the deals on deficits. They make it sound like Obama has failed to use a president’s assumed unilateral power to wave the presidential magic wand and  – presto – produce a budget formula and make Congress –  presto –  swallow it whole. If only it were as simple as it appears to have been in FDR’s time.

How easily we forget that timing is everything. And, timing is simply an art not a science. Remember too that politics is the art of the possible.

Q: When does the coach in football call for the hidden ball trick?

A: When he believes the other coach is thinking about a fourth down punt?

Q: When does the suitor pop the big question?

A: Too soon and he is rejected. Too late and he is outbid.

Q: How do you time your investments?

A:   Is it better to be too early and wait or too late and have to wait longer?

Q: When is the right moment to air the negative political ad?

A: A day late could be lost in the music. A day too early could be endless embarrassment.

Q: When do you raise your own bid for a house you want badly?

A: Too soon and you get stuck in a bidding contest. Too late and the other guy has it.

Q: When does one quit making love with a gorilla?

A: When it wants to.

Get it?

Now the President, the Congress and the political parties are spinning around a pole of confusion about when and how to raise the debt limit at the same time as they are jockeying about how to, short- and long-term, reduce the budget deficits by some combination of cutting (which?) expenses and/or raising more revenue. Boy, are there opportunities to get ground up by the moving parts in that game by moving too soon or too late on any one of the dozens of possible combinations.

While there may be no right answer in how to pull off that caper, there absolutely is a right goal, which the few sane players in that game all know very well. Do it sooner than later and set a framework for a decade and more of real deficit reduction.

So the game we are watching fearfully and hopefully is a waiting and timing game. The smart players have to gauge when the other players are tiring or losing popularity. The dumb players, some of whom only want more exposure for unrelated reasons, look to launch a snow slide just as a new storm approaches.

The President has been clear from the beginning that

  1. The ceiling must be raised well in advance of any possible default, without conditions tied to unrelated issues, because if we seriously approach, much less cross, that line, we may never fully recover the confidence we have enjoyed from the world’s creditors (investors in our Treasury bonds) for the last 200 years.
  2. The deficit issues cannot be resolved solely on the back of the portion of the national budget (less than 20%) dedicated to discretionary spending.
  3. The deficit reductions must come from a combination of cuts throughout the whole spectrum of spending, as well as new savings processes in how some spending arises, plus increases in government revenues by reducing tax avoidance benefits and raising new revenues in the form of taxes and fees, particularly from the richest segments in the population.

All of that should be hardly controversial. But it is. What to do?

The playing field is covered with people who are advancing some personal agenda, whether political or of some substance. They are running in all directions at once, whether liberal, conservative, Republican or Democrat – even the Senate Gang of Six. There is little theme to most of the noise except that they are all seeking to seize the moment primarily to be heard. How and why they do not seem able to see through the haze and recognize that this is not a moment to ignore the overall national public need and good, is almost impossible to discern.

So what is going to happen? We will move inexorably from this moment towards the drop dead date for the debt limit to be raised, which the Treasury now says will be about August 2nd. Around July 15, If not before, we must see some movement towards a conclusion. While a failure to actually make a payment on a Treasury obligation might not occur for quite a while, the ceiling’s not being raised by that date would cause serious dislocations in the world’s markets for our bonds, which will certainly raise all our borrowing costs for a very long time.

These circumstances, while different in many ways, quite closely resemble last fall’s tax showdown when a long standing deadline on basic tax changes had to be met. The President then had been monitoring a similarly confused and disjointed debate and as the deadline approached he struck hard and fast and worked out a compromise solution that seemed to make everybody and nobody happy. I believe and hope that will happen again. And a key ingredient in his solution is likely to be a formula that locks in reductions of deficits over a very long time by both reducing expenditures as a percentage of GDP as well as automatically increasing revenues in a measured way from several types of sources. This President, in his quest for a post partisan type of governing, seems to be mastering the art of extracting compromise from the jaws of deadlines.

That art is based on making sure the outlines of some deal are out there in advance of the crisis and then striking with a great sense of timing in just the right way to pull an imperfect but acceptable result out of the fires of confusion– just in the nick of time!

TIME FOR DIALING DOWN

The noise in the world all around us is rising and gives the feeling that a crescendo cannot be far off. And, that noise is coming from all quarters.

  • North Africa and the Middle East have shaken their moorings and who knows where those ships will fetch up?
  • The situations in Afghanistan and Pakistan give off the stench of a fetid swamp capable of swallowing us whole.
  • The budget challenges here at home hang by a thread over the deep chasm of the debt ceiling.
  • The States of the United States and many of their cities are experiencing wrenching debt and public service challenges.
  • Our rate of unemployment remains at a politically unsustainable level following the systemic collapse of runaway housing starts and auto sales in the past 3 years.
  • The global value of our dollar is wobbling and in peril of all of the above.
  • And our Chinese “friends” cling to their domestic goals, including looking the other way at Iranian and Pakistani nuclear threats, at a time when prudence and wisdom suggest rationally that they should be taking a more global view of their and our situations.

Indeed we have survived, in fact thrived, over the last 200 plus years when faced with an array of problems that often no doubt looked as daunting as today’s collection summarized above.

But there are a couple of important differences to pause and reflect on. It is clear from today’s perspective that there was a lot more margin of error for most of that 200 years than there is today and that we were at the end of those days then masters of our destiny when we pulled up our socks and attacked those challenges.

Today as we look into the future of our multiple challenges it is increasingly difficult to see anything but black holes.

So what does “dialing down” have to do with any of this mess of troubles?

For those who are not old enough to remember what a telegraph key looked like, or how it worked, note the picture:

You can see an armature which moves up and down to click against the base to send its signal of long and short dots and dashes (hard to conceive all that has been replaced by the internet?) On the top of the armature are thumbscrews which regulate the width of the gap which manages the sound of the signals generated by closing the gap. When the gap is narrow –with the thumbscrews down tight – the sound is reduced. When the gap is wide open – with the thumbscrews fully open – the sound is louder.

One hundred years ago when telegraphy was the main means of global communication there were many rooms everywhere which housed dozens of telegraph keys and operators. When all those keys were going full blast, with the thumbscrews all the way open, the cacophony of sound made it hard to hear clearly any one telegraph key vs its neighbors. In order to better enable each operator to hear/use his/her key – frequently twice a day – the supervisor of telegraph rooms would yell out “Turn down your thumbscrews!” The operators all cooperated because it helped them individually and collectively do their job better. And, then the escalation would begin again.

The relevance of the thumbscrew analogy is that we have yet to find equivalent tools in modern society to dial back to a dull roar many of the noisy challenges that our “operators” are dealing with every day.

A wave of excess broke over the last three years in housing starts, cars produced and bad mortgage loans, etc. But we have not yet figured out how to intelligently dial back coming waves of excess in public employees’ retirement, nationwide health benefits, municipal expenditures and debts, Federal budget excesses and our global commitments, both economic and military.

Perhaps we need to look for 21st century equivalents of thumbscrews to be used regularly to keep the noisy challenges we deal with in check so we can at least hear each other talk in civil voices.

One overly simple but illustrative idea, which could help, would be to append to all appropriations a standard mechanism which would allow a minority of any relevant appropriating committee to call for a hearing to review the circumstances of that appropriation, thus putting abusers on notice that they could be at risk of exposure. Remember Brandeis said sun light is the best disinfectant on earth! But, to avoid random fickleness, it would still take a majority of that committee to revise that particular appropriation. Nevertheless, the likelihood of public review can be a powerful warning to users of such support and, when and if things became excessive, tend to cause them to dial back their use to more normal, sustainable levels. While this idea obviously cannot  cause all types of problems to dial back, it may be suggestive of other similar ways to attack other problems.

Perhaps we are destined to watch the waves of societies’ activities build and finally crash as they come ashore. And, maybe the idea of dialing back is as nutty as King Canute of Denmark sitting on the beach and trying to will the tides from rising. But, if we continue to passively accept that status quo, we do not have much of a chance to solve our mess of serious problems.