Monday, August 8, 2011

Moving Forward

In my early days in administration, many years ago, I had the opportunity to serve on negotiating committees for various labor contracts and the position I held on these committees was the exalted chair-filler position. A chair filler has minimal involvement with the actual negotiations so expertise is not necessarily a prerequisite.  Instead a chair-filler is selected based on his or her ability to fill a chair and look both intelligent and engaged at the same time.  I did the best I could to meet these standards, and though I wondered initially why it was necessary to have such a position, I nevertheless found it to be a valuable experience.  The “why” in my opinion is simply because if one side has a large number of individuals on their team, the other side needs an almost equal number to show it is at least equally engaged.

The reason I found these early career experiences to be invaluable is that almost at the beginning of  the process I was able to gauge with a high level of accuracy exactly what the settlement would be.  In an environment where everyone realizes that bargaining is a mutual benefit equation, it is not that hard to predict the conclusion.  I believe the likely conclusion is known by the individuals heading the negotiations and those associated with the negotiations well in advance of the deadline date and perhaps even well in advance of the start of formal negotiation. However, the widely held belief is, if you settle too early, you are really not doing all you can to have your positions prevail.

In the recent budget/national debt debate in Washington, even though we came close to defaulting, I think our national leaders (as well as the accompanying chair fillers) knew based on clearly stated positions, exactly what the likely outcome would be. The fact that it took so long was designed to convince the public of how each side worked to have their position prevail.  I think this strategy was a mistake.  With an economy that is struggling, with a faltering economy, it is a serious mis-step to undermine confidence in that economy and not surprisingly in the Washington leadership in both parties.  And yet we have done that.  Would a settlement two weeks or a month sooner have made a difference? I believe it would have and that we would have been better off as a result of that earlier conclusion. 

More and more we seem to be headed for confrontations and for blunt economic solutions.  No changes in taxes, tax caps, and across the board spending cuts are blunt instruments.  There are no doubt tax loopholes that should be closed or tax rates that should be adjusted.  There are no doubt tax caps that will prevent real needs and priorities from being addressed. And across the board federal budget cuts, if it comes to that, will almost inevitably result in changes that undermine the national interest.

As I have said before we do need to contain spending, we do need to get a handle on the national debt and we do need to reduce the tax burden.  But unless we move away from brinkmanship, and also substitute well thought out policy initiatives for blunt economics, these goals will not be achieved or if they are achieved, the costs could rival the gains.  The economy is faltering and the clock is ticking. We need to do better and now is the time.

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