Monthly Archives: July 2011

Elections have consequences. We’ve heard that adage for so long that it sounds hackneyed. Witness the paroxysms that the Political Class in Washington is now undergoing as the freshman class of 2010, the Tea Party class, flexes its muscles in this contest over raising the debt ceiling. Oh, yes, Virginia, elections do have consequences.

Amid the tumult of all the talking heads, the pollsters, the spin doctors, and the sound bytes lay the most simple of facts. Those who were sent to Washington with Tea Party credentials mean what they say. They have the courage of conviction to represent their constituents as they had promised to do. They are being coerced, bullied, and perhaps bribed, with that intoxicant that is uniquely Washingtonian: Political Power. Choice committee assignments dangle like sugarplums to a child at Christmas. Promises of fundraising support abound. These are the carrots. On the darker side lay the sticks. “Vote with the Political Class or we will gerrymander your district out of existence.” Go along to get along.

These intrepid legislators deserve our admiration. Who in Washington knows us better than we do? No one. Would that we all could enjoy the refreshing prospect of having our opinions count when it comes to government.

On Friday night, the House of Representatives passed a debt increase bill with associated spending reductions. The ball is now in the court of the US Senate and eventually a conference committee and finally to the President of the United States. This has not been a pretty process but it is a uniquely American process.

One of the most enjoyable things about working for a multi-national corporation and gallivanting around the world as I often do is that I get to “sell” America at every turn. Traveling business people are ambassadors, of sorts, in promoting and explaining the American way of life to a usually very interested audience across the planet. This has always been the case for me since I began to travel abroad in 1975.

I have consistently traveled through good economic times and bad, under Republican and Democrat political administrations and in times of high and low American favorability ratings. People have always been curious about pop culture, fashion and Hollywood. Our form of government has is usually puzzling to non-Americans and I have lately been fielding an increasing number of questions about our two parties.

Most of the world has a Parliamentary form of government where multiple parties attempt to build a coalition. The leader of the party that can form a governing majority typically becomes the Prime Minister. Most people simply concern themselves with voting for the candidate whose political party most aligns with their point of view. The process then takes care of forming the government. It lasts about as long as the coalition can hold together. Elections are called over a lost vote of confidence or when confidence is high enough to reset the term clock.

The Parliamentary form of government yields mixed results. Italy, notorious for high turnover, has had 61 governments since 1945 and sports 6 major parties and 28 minor parties. The United Kingdom has three major parties and dozen or more minor parties and has had 18 governments since 1945. Not so in America. We have but two major parties. Individual philosophies are somehow stuffed into either of the two camps.

So the number one question from abroad for me has been this: “Describe the difference between the Republicans and Democrats.” It used to be fairly easy to answer something like this: The Republicans generally favor conservative values and small government; the Democrats are socially liberal and tend to encourage large government and big ticket spending. That used to work just fine until the first decade of this century dawned with a new Republican President and Republican Congress. The Cliff Notes went out the window.

What we have witnessed is the solidification of the Political Class. In Washington, there is something for everybody in power but it all comes out of the pockets of those who pay for it. People like you and me. When the Tea Party movement took American by storm in 2009, there were really two directions it could take. Perhaps the easiest course would have been to create a third party. An independent party. But the cruel reality was that the Republican vote would become split. The last time that happened, Bill Clinton became President as H. Ross Perot took nearly 20% of the national vote largely at the expense of George Bush the Elder. So, the Tea Party, diverse a movement as it is, elected to work through the existing Republican party with the hope of changing it from within. And so, it has become an effective third party with all the rights and privileges thereof.

I am a merchant sailor at heart. In my recollection, the saltiest of seamen would have eight letters tattooed across the knuckles of both hands so that when they clenched their fists together they would spell out “hold fast.” First, make something secure and then keep it from slipping. Hold fast. Stop the spiral of “borrow and spend” and put in controls to prevent that discipline from slipping. Hold fast. Resist the temptation to become another career politician more interested in preserving a notion of personal prerogative than constituent representation. Hold fast. And that is what I wish for our brethren in DC. Hold fast.

Press on.

You’ve heard the terms: The “Grand Bargain;” “The Gang of Six;” and, “Cut, Cap and Balance.” Reminds me of the “Punt, Pass and Kick” competitions kids used to play. Only this time, they are not kids. They are adults.

You’ve seen the polling on this “Debt Crisis” crisis. Whose fault is it? Is it the Democrats who can’t seem to curtail a program or stop blaming George Bush while simultaneously exalting Bill Clinton? Is it the President who has not presented any sort of budget to Congress in over 800 days and who has played with all the grace of boy who just takes his ball and goes home when things don’t go his way? Or is it the Republicans who have awoken to the dangers of “demon-spending” and are twisting their collective ankles to enter a 12-step rehab program? Is there anyone more obnoxious than a reformed addict? The polls always lump these players together under their party labels but that is incorrect.

In actual practice during the last two decades, the Democrats and the Republicans, no matter who is the President, should properly be referred to, not by party, but as the Political Class. They are neither fish nor fowl when it comes to party affiliation. They have melded into an amorphous mass of wheeling and dealing chameleons that further their own agendas and careers at the expense of the hopes and desires of the real people who send them there. “Always make sure you have someone else to blame for the failure to move the ball,” must surely be in the Congressional Book-of-One-Liners.

My business experience, as well as my military experience, long ago defined the difference between management and leadership. Our Congress has become adept at managing things such as constituent requests for tickets to the White House tour or a flag that has flown over the US Capitol, for example. They’ve become adept at managing their image as hard working advocates for you in an environment where nobody leads, including them.

There are many types of leadership and much of it is situational. In the case of Congress, you have 535 huge egos. That’s not a criticism; it is a prerequisite for the job. You can’t manage egos, you have to lead them. And you cannot manage to the lowest common denominator. That’s what a manager does and the results are what we have come to expect out of Washington: something everyone can agree on at the lowest possible level. A leader has to elevate the conversation among all participants and paint a vision of the future. In the case of the debt ceiling debate, that vision has both a bright side and a bleak side. We are staring into an abyss that was clearly marked on our financial maps and yet we are on the brink of falling into it face first.

We are facing an untenable position in our debt situation. Today we borrow 40 cents for every dollar we spend. A fair chunk of that spending pays off existing debt. Theoretically, we could only spend 60 cents instead of $1 and avoid having to raise the debt ceiling. Some people think this is a wise choice. I think it is dangerous, perhaps reckless, to do so, especially by August 3rd. Our government is ill-equipped to make the tough calls on what bills would get paid and which ones would not. Somewhere along the line, we would not honor our obligations. We need to do that in order to prove that we can govern ourselves.
Yet, raising the ceiling without meaningful reductions in present spending is equally reckless. Limiting the power of future Congresses to spend money as they deem appropriate seems unenforceable, perhaps unconstitutional.

Then there is the discussion of Federal revenue generation. I refer to that as taxes. We cannot tax our way into prosperity. It is like shrinking our way to greatness. Yet there exist a myriad of tax legislation in the form of special dispensation and loopholes that favors one company over another, one industry over another, one technology over another that creates an uneven playing field that actually stifles competition. Short term tax breaks defer the difficult decisions that companies need to make to remain competitive both domestically and globally.

Get rid of them, I say. Greatly reduce the corporate tax rate even if it means that some companies will lose their benefits and have their taxes increase. Level the playing field and reap the benefits of a competitive corporate sector. Oil companies must explore to stay in business. Companies need to innovate to remain competitive. They don’t need Uncle Sam to incentivize them to do that; their survival demands that. Our industries are mature enough that the market can determine the winners and losers, not the government.

Brinksmanship is not leadership. It is grandstanding. It is pompous. Does anyone want the same government bureaucrats that gave us the overhaul of the healthcare and financial sectors cooking up another 2000 page piece of legislation in the dark of night that nobody can read? Not me. Nor do I want yet another Blue Ribbon commission to conjure up another deficit reduction scheme.

In the words of Kevin Millar, the famous Boston Red Sox first baseman, it is time to “Cowboy Up” in Washington. This 112th Congress must take responsibility for its own actions and its own budget. The debt ceiling debate is happening on its watch. The 112th Congress owns it.
We cannot afford to punt, pass or kick the can down the road. Lead, follow or make way for someone who can.

Press on.