September 30, 2013

Government Shutdown Like A Carnival Ride

If you've ever been to a local carnival where the rides are rolled out of trucks and stood up on temporary stands in a shopping mall parking lot, or perhaps a picnic area on the edge of town, then you know what it feels like riding a miniature roller coaster that feels like the tracks are going to collapse out from underneath the ride at any moment.  In that case, what's going on with Capitol Hill right now won't come as a new sensation for you.
 
World markets seem to be waiting to see what happens.  It's as if they are on the ride, not knowing when the twists, turns, drops and climbs are going to occur.  The carnival ride analogy fits there as well - nobody knows how this situation is going to resolve itself, least of all me.  I have my suspicions that there will be a deal before the shutdown actually occurs.
 
Democrats and the president likely are harmed less than Republicans if there is no deal.  Republicans for the most part know, and care about that.  The shutdown in 1995 lambasted the fortunes of the Republican party that was much more highly regarded by the public than the current crop is regarded.  The Ted Cruz wing of the party, standing up for what is right, seem determined to die on this hill, whereas other GOP party members understand that a battle is not an entire war.  You never win a war without taking some losses and you probably are going to lose a battle or two along the way.  The broader spectrum of the GOP understand that.  They know that stopping Obamacare and balancing the government budgets is not accomplished over a weekend.  So they are going to settle for some sort of compromise with little to show for it in terms of austerity.  Perhaps a sequester extension.  Maybe an Obamacare delay if they are lucky.  But they will blink because they have to blink this time.  The timing is not right for them to fight for this hill at this time.  That's reality.  The sooner the Tea Party faction realize this (BTW, I am a full Tea Party believer/supporter), the better.  They ran into this battle under-armed.
 
Democrats for their part are not going to emerge unscathed with a shutdown.  A smart GOP could get the blame to stick at least in part to the Harry Reids and Obamas of the world.  They haven't had a successful track record, but it is certainly feasible.  So Democrats are not without risk in this.  Unions have turned on Obamacare in significant numbers.  Agreeing to a delay gets them to look conciliatory which is a potential political win whereas sticking to their guns is not an entirely opportune option for them.  A deal will likely get done in time today.
 
But the real roller coaster is related to the outcome of that deal and the bigger picture.  Government solvency is the real underpinning of the carnival ride.  Duct-taping some solution to a supporting leg of the ride infrastructure may work for a little while, but at some point, it's going to have some serious, serious unintended consequences.  I wouldn't want to be on the ride when that happens.
 
 
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