Wile E. Coyote and the fiscal cliff

One of my favorite shows when I was growing up was Wile E. Coyote and the Roadrunner. Even without the use of any dialogue the show was really entertaining. You always knew that any plan the Coyote concocted would end up in what kids call now "an epic fail".  Even the laws of nature would conspire against the Coyote once in a while. Things would fall upside down or sideways and crush the Coyote instead of the Roadrunner.  It was predictable, funny and nobody would really get hurt. Cartoon characters seem to miraculously heal after walking away from the crash site looking like an accordion.

One of my favorite cartoon-world features was "cartoon gravity".  You could get past the edge of a cliff and continue to safely run on air as long as you didn't look down.  Also, if you fell down a cliff while standing on an object, a big rock for instance, if you jumped off the rock just before it hit the ground, you would be fine. I loved cartoon gravity.

I think all these subliminal messages about cartoon gravity are deeply ingrained in the psyche of our ruling class. As a country, we have been running on air since the century started.  Since we didn't want to look down, it didn't matter. Then all the mess in Europe an Japan put the fear in the heart of some common people. Our political class decided that only the deficits that were created by the OTHER side really matter. Basically they are trying to convince us not to look down and blame the Roadrunner or Coyote. Since their positions are over simplifications of otherwise useful economic theories, these guys start sounding cartoonish to me. They are just not as funny as my favorite show used to be.

This time, Republics and Democrats are falling down the cliff on top of a massive rock, both hoping that they can jump off the rock at the last millisecond and be unscathed. I think this approach did not work last time. Brinkmanship on the last debt ceiling debate was punished  in the last election. It also created all this uncertainty for business, not just government contractors. It probably had enough of a negative impact on business prospects that it lowered job creation. Someone somewhere got hurt by last year's politically created debt ceiling crisis.

I expect that Roadrunner and the Coyote will get along a little bit better this time around. The main reason is that if they cannot agree, the outcome is something neither party wants. So at the end of the day, they will posture and dramatize the issues to ingratiate themselves with their constituents, but there will be a compromise. This will happen a minute before the last minute. Not too early in the game to appear as a pushover, but early enough not to appear inflexible and uncompromising.

Oh, the games we allow them to play with the regular people.

I tend to agree with Warren Buffet. Fixing the deficit is easy, we pass a constitutional amendment that makes any member of Congress ineligible for re-election if the deficit goes over 3% of GDP on a given year. Have them be concerned about their own unemployment for once.