The Perils of Investing in Incumbent Incompetence

We can all relax now. The pundits assure us that the brave men of Congress have putPerils of incompetance the fiscal cliff behind us. The reality however is that its not only behind us but above us as well. We went over it some time ago but simply refused to come to terms with it. This forces us to go through the same charade of pending national insolvency every few months. Right now we’re just bumping through the Class 5 rapids at the bottom of the falls.

Who knows when the dive happened; last year, last decade, three decades ago? It happened when the American people allowed their elected representatives to mortgage our collective future for promises they had dubiously mandated itself the authority to make. It happened when politicians consistently gave people a reason to believe there is a limitless supply of government freebies at the expense of someone else.

When you get to the point where you’re forced to borrow just under 50 cents of every dollar you spend, it didn’t just happen. When GM and Chrysler declared bankruptcy in 2008, it didn’t just happen. It was the result of decades of gross financial, labor/ management, product, and free market mismanagement. They went down with a badly broken business plan.

The US government is in the exact same position; for all intent and purposes bankrupt with a broken business plan. At some point we became comfortable with allowing the smartest guys in the room to do business only one way; negotiate their own interest, legislate, appropriate, borrow, spend. That would almost be okay if there was cash on hand to cover the appropriation phase.

At some point Washington adopted this inane “Ready, Fire, Aim” routine to, in fact, become business as usual.  The casual American observer not only accepted it but became quite comfortable with it. Mired in economic quicksand, a downgraded credit rating, and sirens of financial distress becoming unbearable, its amazing to see that the concept of being 16+ trillion dollars in the red at the hands of economic amateurs doesn’t seem to resonate. Those same smart guys are now telling us that if some Americans simply give more, they’ll be able to right the foundering economic ship. It’s like handing a drug addict another syringe after promising he would change his behavior.

Politicians sense this ambivalence and translate it to tacit approval thus cultivating the cancer in our bankrupt, squabbling, and politically paralyzed era of American history. Shame on us, the electorate, as we don’t really seem to care about the magnitude of the problem, how we got here or what it will take to get us out.

There is a term, coined in the 90’s for Americans that perpetuate the political status quo via the election booth; the Low Information Voter. These folks cast their vote based on a candidate’s gender, race, religion, or appearance, never bother to distinguish fact from rhetoric, are unable or unwilling to connect dots between ideology and outcome, and never assimilated how our republic is supposed to work. If the Low Information Voter likes who is telling the story, they’ll believe anything they’re told. Watch this unfold over the coming months in regard to immigration, gun control, spend cuts versus increased tax revenue, et al.

This would explain why the American voting public continues to return the same politicians to the same jobs term after term at a rate of over 90% even though those same voters give this group an overall approval rating that persistently hovers around 10%. Sanity should dictate that they all be sent packing however our dysfunction blames every thing and everybody else. We would be far better off if we were to look in the mirror. Regrettably, the Low Information Voter seldom is capable of doing this.

Bob Woodward’s book, The Price of Politics becomes a broken record after the first few chapters as he chronicles the repetitious and dysfunctional maneuvering employed by our political leaders to solve fiscal problems at their root. The book would more aptly be titled The Price of Cowardice. What they all lack in problem solving skills they make up for in front of the closet camera and microphone.

The current tone of class warfare will do virtually nothing to fix our financial issues. At some point Americans will have to take their medicine, all Americans, not just the villains du jour – rich folks. A certain proportion of the 47% that currently do not have a skin in the income tax game should also be compelled by politicians to access their inner patriotic duty to join the team. And those government entitlements – like it or not, much needed, deep reforms must happen. None of this medicine will be very enjoyable; effective medicine seldom is.

Its easy to point fingers at politicians and their adversaries on the other side of the aisle that drove the car into the ditch but a lot of the blame needs to be shouldered by us. We’re the ones that gave them the keys and a full tank of gas.

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2 Responses

  1. Amen!!

  2. Aww. Do not stop writing about politics! I am feeling pretty deflated after the election but I have hope…Marco Rubio 2016.

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