Business guru Tom Peters once observed, “You can’t shrink your way to greatness.” Clearly Tom left his tri-cornered hat at home, because that’s not how today’s Tea Party operates.
In the recent debt ceiling negotiations budget cuts were the sole strategy to address what ails our nation. Raising taxes? Are you crazy? Questioning entitlement programs? Downright unpatriotic. Nope, to the Tea Party there is only one mantra, cut today, cut tomorrow and then put together a commission to cut in the future.
Unfortunately these “patriots” chose the wrong party to affiliate themselves with. They’re much more like the Donner Party than the folks who threw tea into the Boston Harbor to protest a British tax on tea in 1773.
To refresh your memory, the Donner party was a group of 87 pioneers who set out for California in 1846. Choosing a new route to follow, the Hastings Cutoff, they got trapped by a huge early snowstorm near Donner Lake, Utah. Food supplies ran very low and some of the members chose to munch on other pioneers to survive, resulting in only about half of the group reaching California. Yep, the other “C” word, cannibalism.
Cannibalism? Isn’t that a bit strong to describe efforts to get the Federal debt under control? Which leads to another “C” word, Clinton.
According to FactCheck.org, Clinton’s combination of spending restraints and tax increases, which fell almost exclusively on upper-income taxpayers, produced a surplus of $1.9 billion in 1999 and $86.4 billion in fiscal 2000. Please note that I used the more conservative calculations that eliminated the Social Security surplus, which tended to hide the size of the actual Federal deficit. Contrary to popular belief, this short-lived bout of rational economics was not the motivation for Prince’s anthem “Party like it’s 1999.”
As a best-selling business author and award-winning internationally syndicated columnist, I’m a business guy, not a political pundit. But watching my beloved country suddenly saddled with a AA+ bond rating and trillions lost in stock markets worldwide, I couldn’t sit on the sidelines and watch pseudo-patriots drive my country into the ground any longer.
Before looking at any solutions, let’s reflect on the Tea Party’s roots and the fateful day of February 19, 2009. That afternoon, from the floor of the Chicago Mercantile Exchange, CNBC’s Rich Santelli criticized the government plan to refinance mortgages. He called it “promoting bad behavior” by “subsidizing losers’ mortgages.” Santelli suggested holding a tea party for traders to gather and dump the derivatives in the Chicago River on July 1st.
Yes, when I think of populism and fighting for the little guy my mind immediately thinks of the , CNBC and how losers’ mortgages are what really drove our economy off the cliff during the late ‘aughts. Personally if anything should have been tossed into the Chicago River on that day I think it should have been executives from AIG, Washington Mutual, Bank of America, etc. who profited from those bad loans and who were the real source of any bad behavior.
Watching the world’s economy teetering on the edge, Treasury Secretary Paulson proved that my grandfather’s admonition “In America we have socialism for the rich and capitalism for the rest of us,” was right on target. Instead of investing in keeping people in their homes, we tossed money willy-nilly at banks. At least Goldman Sachs, Paulson’s former employer, was able to get paid dollar for dollar by AIG on the money it was owed due to this bailout. And don’t even get me started on the “Let them eat cake” Bush tax cuts.
I’ve got my MBA and have served as an adjunct professor to MBA students. No, I’m not a credit-swap-smoke-and-mirrors-MBA. I’m a put-everything-on-the-table-MBA who believes that you have to look at all your options before you can solve a business problem as complicated as the Federal deficit.
Sure budget cuts must be a part of any solution moving forward. But revenue increases and entitlement programs must also be in the mix. Heck, forget Afghanistan and Iraq, we might want to consider closing the book on World War II and finally bring our troops home from Japan and Germany. Just sayin’.
Any attempt to address our budget shortfall by just cutting budgets is like trying to treat a case of the measles by cutting off the patient’s hand.
According to Wikipedia, some commentators claim that the “tea” in Tea Party stands for “taxed enough already.” Comedian Lewis Black sums up my feeling about taxes when he asked the question, “Why don’t we ever see paying our taxes as being patriotic?” If you really love America, shouldn’t you help to support it to keep it strong?
We can continue down the Donner Party, oops Tea Party, route and cannibalize our future. Or we can put everything on the table and actually return to the days of a balanced budget. Sure it will be painful, any effort to remove sloth requires some work to achieve.
And the next time you hear someone say that something is off the table in any budget negotiations, let’s join together to toss them off the table, because the Donner Party approach is nothing but a dead end.
About the Author: Bob Rosner is the author of the Wall Street Journal and Amazon best-seller, the Boss’s Survival Guide, and an award-winning journalist who writes the internationally syndicated Workplace911 column. He received a B in his MBA Finance course, which he believes qualified him to write this article.