Our nation’s capital just had a circus sideshow that the world watched with incredulity. The spectacle is now on a pause but this temporary reprieve could just be an intermission before the next act possibly plays out in January 2014. The direct cost of the shutdown is estimated to be several billion dollars but as Annie Lowrey and Michael Shear opined in an New York Times piece, “the affiliated damage-like the undermining of consumer and business confidence-will be far greater.”
While it is popular in the media to blame Ted Cruz, Speaker Boehner and the Tea Party for the circus, I believe if we had a strong ringmaster as President, we could have prevented this manufactured crisis. As Michael D.Watkins and Max H.Bachman wrote in in The Harvard Business School, “Leaders cannot be blamed for lack of foresight in unpredictable crises especially if they have taken all possible steps to prevent it,” and added that “if a damaging event happens that was foreseeable and preventable, no excuses should be brooked. The leaders’ feet need to be held to the fire.” President Obama knew a year ahead of this looming crisis and did nothing to prvent it.
An astute President would have worked with maniacal focus to cultivate relationships with key House and Senate leaders from both parties to build a coalition of support. Contrast this with the last shutdown in 1995 when then President Bill Clinton tirelessly engaged with Bob Dole and Newt Gingrich. Clinton embraced the goal of a balanced budget but also laid out a marker indicating that cuts to Medicare, Medicaid, Education and the Environment were off the table. Yes, the Government did shut down due to the intransigence of Gingrich, but the nation had a clear and cogent blue print from Clinton and rallied to his side forcing the GOP to back off and accept a long term budget deal that led to an economic boom with lowest unemployment levels and a budget surplus. While President Obama rightfully drew the line on the repeal of Obamacare, he has not laid out any roadmap for a long term budget that will also reduce the debt. In fact, the Simpson-Bowles plan could have been the starting point for wide ranging negotiations that this President should have led. It would have resulted in a long term budget and spending plan which would have not served to avert the current crisis and provided certainty for businesses to borrow, invest, hire and grow the economy.
When the President abdicates leadership, clowns like Ted Cruz will rush in to fill the vacuum. It is time for our President to demonstrate leadership. While another shutdown may be good politics especially for the Democratic Party’s prospects in 2014, it will be disastrous for the nation if this President continues to play second fiddle.
Rameysh Ramdas, an S.F. Bay Area professional, writes as a hobby.
No, Ted Cruz and his party are to blame
The economy was in a freefall losing more than 800,000 jobs a month when President Obama took office. The country badly needed a stimulus. Obama and the Democrats reached out to the Republicans, but in the end had to pass a stimulus bill with only Democrat votes, thanks to the Tea Party’s inflexibility. During the debt ceiling crisis of 2011, Obama and Boehner reached a grand bargain including significant entitlement reforms to create a more balanced budget. Once again, Boehner was undercut by Tea Party members and had to renege on his deal. Hence, the sequester was created and went into effect at the beginning of 2013. After such a disastrous record, it is absolutely ludicrous to expect President Obama to extend his hand to this horde yet again!
While the 16 day shutdown resulted in 24 billion in lost revenue, thankfully this amount is a relatively small portion of a 16 trillion dollar economy. On the other hand, compromises from past crises have been far more costly. The American economy is still reeling from the effect of the crisis driven compromise: the sequester, which has shaved as much as a full percentage off the GDP and has increased unemployment by 1.4%. It seems that Ted Cruz and his party would like for the government to shutdown and the economy to crash, if it means that it could bring down Obama. Thank god Obama held a hardline and let the Tea Party politicians be seen for who they really are and how little they care about the American people’s real issues.
Elections have consequences. When Tea Party voters turn up for elections in their gerrymandered districts we get uncaring idealogues elected to office. It started with Joe the Plumber, followed by Bachman and Palin and now Cruz. Creation of the “Taxed Enough Already” (TEA) party is anathemic to rational thought and fact. The party was created at the same time that individual tax rates were among the lowest in half a century and the share of corporate taxes in the low single digits as a share of the overall taxes.
The House has voted 41 times to defund the Affordable Care Act, knowing fully well that it would fail in the Senate, and even if it passed, it would be vetoed by the POTUS. This is the very definition of madness. This is a party united only by their hatred of Obama. Big money interests were able to put in place stooges like Cruz to hold the American government hostage for 16 days. But in the end they have been deemed to have failed in the opinion of the majority of Americans. Hope we have different results and better consequences in the next elections.
Mani Subramani works in the semi-conductor industry in Silicon Valley.