Monday, October 17, 2011

The King Is Dying

In ancient times, word that the king was seriously ill could lead to an economic depression. The uncertainty would make people scale back their plans and hesitate on new initiatives. This makes sense when you consider that this was before the days of business executives, and the more capable kings would serve as the central manager who kept the country working together. If there was no king to watch out for the economic system as a whole, it was hard not to have doubts that the system could keep moving forward.

We are seeing some of that effect in the United States this year. The economic statistics from May, June, July, and August have showed that the national government’s flirtation with bankruptcy took a heavy toll on the national economic psyche. When we find out that the people in Washington are no longer even talking to each other, and a fraction of them are actually trying to bring the country to a halt, it is like hearing that the king is dying.

The news from Washington, of course, has not improved in the two months since. At the end of September, with the budget deadline looming, the House of Representatives took most of the week off. In the end, there was no budget because no one in an official capacity in the House had even tried to write one. At the deadline the House could barely agree on a resolution allowing the federal government to stay open.

The king is dying. And so it comes as no surprise if several measures of economic confidence are at the lowest levels ever. A disaster is on the way, soon or later, inevitably, and the people in Washington will go on recess leaving it to us to figure out what to do.

It is no wonder that tens of thousands of people are huddling in living rooms, hotel meeting rooms, union halls, and out on the street to try to figure out the answers that can no longer be found in Washington. These private discussions may ultimately provide the road map we will realize we need when we get to the next turning point.