Shutdown averted. But.

So the government shutdown didn't happen. As a guy who's still getting paid, I'm kind of glad I was wrong on that one. As a guy who spends a lot of time researching economic facts, and politics, I'm a little less than thrilled. Allow me to explain.

The Republicans won the House back in last year's midterm elections based on a few things. They promised jobs, they promised tax cuts, and they promised to cut spending in Washington. Two of the three I think they actually even planned to do. Fox News started the Tea Party as a means of rallying the populace to the cause, and Glenn Beck and Sean Hannity praised the Tea Partiers and their patriotic goals every night on TV. I remember watching it on Fox News in the chow hall on my base in Iraq. So some new Congressmen and women march into Washington with a clear objective. The Tea Party, meanwhile, is excited to a fanaticism that America hasn't recently seen in politics, which gets sticky. The Republicans had already instituted a “don't compromise or work with the Democrats ever” policy, but with the Tea Party going they would now be unable to compromise at all, even when they wanted to. Which, let's be honest, is now necessary if government is to happen.

President Obama, usually an intelligent man, didn't seem to notice that. So the Democrat proposal was a pre-emptive compromise. They want $61 billion in cuts, let's offer about half that. That's the best we can do. This is a strategy that sometimes works while buying a car, because you don't have to buy the car. You can walk away. But there has to be a budget, and by starting out with a compromise the Democrats gave away all the power. Again. Do you remember the roundtable health care reform discussions? My favorite was the time that John McCain made a point, and while waiting for Obama to reply he got his angry retort ready. He already had his angry face on as the President said “good point John, we should fix that.” That was one confused looking Senator. But why did we have the attempt at compromise? Nobody crossed the aisle. Republicans who do are vilified by Fox and lose their next primary, and they know it.

Instead of starting off with a compromise figure, the Democrats needed to take the lead and try for once this century to control the tone of the debate. I would have loved to see President Obama on TV telling people that John Boehner wanted to eliminate jobs and destabilize the economy. That Eric Cantor was tired of unemployment dropping to levels that we haven't seen since the economy crashed under Bush. Explaining that while he understood the suffering of the long term unemployed, the Tea Party wanted to make sure rich people got tax cuts, so we might have to cut back on things like infrastructure projects that create jobs. We might have to fire some teachers, and Border Patrol agents, and meat inspectors. We don't want our meat inspected anyway, who ever hears of food poisoning these days? That's the debate I should have seen, and I feel robbed. Because all I heard about was the deficit, which is the bogeyman this year. Everybody needs a bogeyman, Bush used terrorists to great political advantage, this year it's the deficit.

Is the deficit a problem? Sure, has been since Nixon removed us from the gold standard, Reagan tripled the deficit, and GWB handed Obama the largest one ever. But being in the military has taught me some things, and one of those is that tactically, you worry about the thing that will kill you now before the thing that might kill you in a minute or ten. So is the deficit an IED a few hundred meters in front of our economic Humvee? No. It is an IED on the road. Just not this road, and we can still turn before we hit it. But there's an IED right there in front of us, daisy chained to the one that hit us three years ago. (Daisy chaining is a tactic wherein insurgents place several IEDs in a row in order to catch more than one vehicle, or catch vehicles not hit in the initial blast.) This IED is known as unemployment, and it's still big.

Are our unemployed still having a hard time finding work? Yes, although corporate America has returned to record profitability. The Bureau of Labor Statistics reports that unemployment is “little changed” at 8.8%. Output in the last quarter of 2010 is up 4%, 5.9% in manufacturing, while labor cost decreased 0.6% and 2.7% respectively. Yet by the July-September quarter of 2010 corporate profits were 12% higher than before the recession. (http://www.telegram.com/article/20110410/NEWS/104109883/-1/NEWS04) It seems that while the recession was in full force our workers got more efficient, or maybe they just started working more hours for less pay. Either way our economy started producing at or above pre-recession levels without the commensurate hiring orgy that would seem to naturally accompany such success. It seems those profits haven't trickled down enough yet to result in hiring. So what do we think will happen when the government pulls $38 billion out of the economy? $38 billion is 760,000 $50,000 a year jobs. (I know it's not that simple, some of the money would have bought office supplies, some would have been spent repeatedly, thereby skewing the figures. Bear with me.) Of course, that budget only applies to the next 6 months, so double either number. Unemployment is about to go back up. Remember to thank your Congressman in November of next year. Alas, they will find a way to blame Obama. I just wonder what buzz words Fox News will introduce to the debate.

Thanks for reading.