Thursday, November 08, 2012

Compromise, Arrogance, and the Fiscal Cliff

The Fiscal Cliff looms.

The term refers to a set of automatic spending cuts and tax increases that go into effect or expire at the end of the year - combined with the fact that the debt ceiling will soon need to be raised again.

The government seriously blew it the last time this subject came up. They nearly threw the economy into a second recession with their refusal to govern responsibly, and earned the ire of voters in American and embarrassed themselves (and America) before the world.

In fact, they created this fiscal cliff as a way of forcing themselves to do something constructive on this issue after the elections - because they could not do anything constructive at the moment.

The time to do something constructive is here.

It seems that the Tea Party - the architect of the previous train wreck - has been humbled a bit in the elections. However, it is unwise to assume that they are politically impotent or that they have any moral qualms with driving the country off of such a cliff. They believe that the fearlessness with which they will destroy the country gives them power and will force others to yield to their demands.

This time, I wish to encourage the supporters of a rational compromise to help to ward off this outcome by pre-empting those moves with vocal and active opposition to the attitudes behind it.

The target of this call for rational compromise is the uncompromising position of "no revenue increase." It is a call to declare that position morally unconscionable.

It is one thing to go to a bargaining table with the view, "This is what I think is best. Let us hear what you think is best. Perhaps one of us can change the mind of the other. Failing that, perhaps we can patch together something that contains those elements we each think is most important and in which we each give up those elements we think can best be given up. We will both leave the table supporting a package containing elements we believe will fail - but that is how compromise works."

Going to the table with a promise not to raise revenue replaces this morally mature attitude with utter arrogance. Such a person is saying, "I promise not to listen to any arguments against my position. I will consider no fact or line of reasoning that might suggest that my position is in error. I will keep my position to the end of time and will not allow any argument that you present - to change my mind. "

The arrogance actually goes further than this.

A person can believe that she is right and still accept that a compromise position must contain elements that she disagrees with simply because of the possibility (however unlikely) that one is wrong. You do not need to always convince me that you are right to get me to compromise. It will be enough for you to convince me that you have considered the complexities of the case and have sensible arguments supporting your position. In this type of case, while I still hold that you have made a mistake you cannot see, I allow for the possibility that I have made a mistake that I cannot see and allow your view to determine some of the final result on those grounds - even though you have not convinced me that I am wrong.

The person who refuses to compromise - who promises not to compromise - shuns even this. The attitude is quite like saying, "The great and all-knowing me cannot possibly be mistaken. Not only do I refuse to listen to any arguments or evidence suggesting that I am in error, I refuse even to conceive of the possibility of error."

This leads to the question, " What is the weight of an immoral promise?"

Let's say that a person promises a friend to kill his ex spouse's favorite pet, or to vandalize her car, or to support a malicious slander against her. After a moment of reflection, this person realizes that what she had promised to do something no decent person would do.

The immorality of the act renders the promise null and void. It us time to go back to the person to whom one made the promise and say, "First, I regret to inform you that I must break my promise. Second, what type of creature are you that you would have me make or carry out such a promise anyway?"

Besides, there is no promise that cannot be broken if a greater concern arises. If I promise to meet you for lunch, and I am the first to arrive at an accident where a hit-and-run driver hit a young boy on a bicycle, my obligation is to the young boy - not to keep such a promise.

Certainly, in the heart of a decent and respectable individual, governing the nation would be considered an issue of extreme importance.

We have very little time to work on this issue.

It is time to take names of those who refuse to compromise and to raise the public ire against any who would display that level of arrogance. In fact, the time that the government approaches this fiscal cliff is a good time to promote the social attitude that a promise not to compromise is a promise not to govern. It displays the utomost arrogance and those who would do such a thing should feel shame.

Promoting such a social attitude involves publicly and frequently condemning those who display this arrogance. "So, what you are saying is that you are so perfectly wise that there is no conceivable way that anybody who disagrees with Your Greatness might contribute something of value to these negotiations." That accusation should be leveled at anybody who absolutely refuses to accept any form of revenue increase as a part of a budget compromise.

Because, on this issue, that is exactly what they are saying.


mojo.rhythm said...

It is the stupidest thing imaginable to try and balance a budget during a depression. That includes tax increases AND spending cuts. The government needs to run enormous deficits in order to provide the private sector with the necessary income to eliminate its debt overhang and get aggregate demand back to a sufficient level.

Alonzo Fyfe said...


That is precisely the reason the "fiscal cliff" is a porblem. It represents a massive - automatic set of budget cuts and tax increases exactly when we do not need it - it would kill the recovery and cause a nre recession.

At the same time, the country cannot be in "recovery mode" for 10 more years. The debt would grow to the point where people will quit trusting our ability to pay it back, interest rates will rise, and debt payments replace investment borrowing.

If interest rates rise we would be forced into budget cuts elsewhere or tax increases, perhaps during a recession, dragging the whole economy down.

So, the budget plan is for near-term deficits with a longer term plan to pay back the debt as the economy recovers in a way that gives borrowers assurances that the American government can be fiscally responsible.

At the same time, not having a plan means fiscal uncertainty which, by itself, hampers business investment because it clouds their chrystal ball - causing businesses to hoard cash rather than invest in business growth.

So, the best current plan is to guarantee the middle-class tax cuts to provide immediate business certainty and to prevent a tax increase on 98% of the population (97% of small business owners) during a recession.