The dog has been difficult today. I am trying to look on the bright side though. I read an article today that said optimistic people will live to 120. Or something like that. I guess I’m half optimist, half pessimist so I guess I shall peg out at 60. Almost there.
After the US election I thought I heard both sides talking about compromise. I brightened up. On this evening’s news I heard Mr. President and Mr. House Speaker drawing exactly the same red lines as they did before the election. I lost my momentary flicker of brightness. I mean what on earth goes through these people’s minds? They have just seen 2 days of stock market turmoil followed by a brief respite on Friday and here they are again doing their best to convince us that they are both willing to compromise except on the very issues on which they know the other side won’t budge.
I was taken aback when I searched for pithy quotes on compromise to discover that most of the ones that Google threw out were arguing against compromise. Principles matter. Well that may be and I confess that there are lines I will not cross. Nevertheless I am getting just a little bit fed up with politicians playing chicken with the economy. It is not beyond the realm of possibility that the grating agencies will say ‘hard cheese’ and downgrade the USA again. Now it may not seem like Standard & Poor’s, Moody’s etc. have a lot of credibility left. Indeed I believe an Australian Court this week ruled that S&P misled investors – to borrow from the Beeb,
Federal Court Justice Jayne Jagot said that both S&P and ABN Amro were “misleading and deceptive” in the rating of two structured debt issues in 2006, which she agreed were “grotesquely complicated”.
That may be true but the bond market vigilantes will not be merciful if they think we are going into a lengthy, acrimonious and destructive paralysis. Smarter minds than mine, and there are many, argue that a compromise will be hammered out, probably in January. Maybe. I hope so. In the meantime we can expect another 2 months of Punch and Judy show. Luckily I shall beheading down to Antarctica for the best part of a month so I won’t be too bothered by the traditional Christmas pantomime.
At the same time as the USA is demonstrating the unrivaled joys of democratic fisticuffs, on the other side of the globe the Chinese are allegedly pulling the plug on Google’s search engine. Possibly they needed it to complete the set after the fuse blew on Bloomberg and the NY Times. I did read they have also banned balloons because people may write subversive messages on them and release them around Beijing. The carefully choreographed Communist Party Congress will eventually spit out a new cadre of leaders, none of whom will have red lines and all of whom will follow the consensus. Otherwise they will be shot. I am not necessarily advocating that such an approach be adopted universally. I am sure Messrs. Obama and Boehner aren’t afraid of balloons. However at the current time it does have some attractions. Perhaps my compromise would be for O & B to have a balloon fight and the one who bursts the most wins.
The Middle Kingdom has regularly been accused of manipulating its economic data over the years and true to form, just as the Congress meets, all the indicators move from red to green and the corner has been turned. China is back! I find it mildly ironic that after questioning Chinese data for so long it fell to the Arch-Capitalist himself, Jack Welch, to suggest that there was similar skullduggery afoot in the USA. Now you may wish to think that, Mr. W., I couldn’t possibly comment. The art of comedy is in timing, they say. So maybe the statisticians are just having a gentle pre-election joke with us. Somehow I doubt it. It does seem that whereas there may be some reason to reflect on the accuracy of data mined in a few days across a country of a billion and a half citizens it is less likely that the veracity of the data in the USA is equally suspect. No doubt it is subject to sampling error, revisions etc. but probably with the fullness of time, maybe sometime in 2015 we shall discover that the numbers were broadly in the right ballpark. All of which tells us that provided Obama and Boehner don’t screw it up the US economy has a fighting chance of a robust recovery. That doesn’t automatically fix everything but it is a whole lot better than failing to find a compromise over revenue and expenditure. To quote Mr. Micawber:
“Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”
My suggestion is a political swap. Put Xi Jinping and Li Keqiang in Washington for a few months and send Obama and Boehner to Beijing. Two things we can be sure of – there would be no Fiscal Cliff in the USA and balloons would be back on the permitted list in China. And with a little luck, Google might also be plugged in again. To quote Deng Xiaoping………Yee-ha!