Face off at centre ice
As 2012 draws to a close, it’s increasingly clear that two of the most exasperating news stories of the year have converged into one. We’re talking here about the NHL hockey lockout and the political staring contest over the U.S. budget.
In both cases, the real game in question is chicken. Whether it’s the future of the hockey season or the future of the American economy, the parties concerned appear convinced that they’ve got a monopoly on being right – whatever the damage they inflict on others or, ultimately, on themselves.
In fact, it seems the interests of other stakeholders just don’t register.
In the budget issue, Democrat and Republican politicians seem quite prepared to cause all sorts of hardship for individuals and to the broader economy. Even as President Obama visits financially-fragile families in a folksy bid to publicize his stance on the budget, failure to achieve a compromise will ultimately hurt those same people.
The standoff between the Democrats and Republicans has led the U.S. to the edge of a “fiscal cliff,” a combination of tax increases and spending cuts that threatens to push the economy back into a recession in 2013.
The U.S. Congressional Budget Office estimates the threat of those $7-trillion measures could reduce the country's overall GDP by 0.5 per cent in the latter half of this year alone. Some say it could slow down the U.S. economy by as much as 3.5 per cent in 2013.
Even if the fiscal cliff doesn’t lead to economic disaster once midnight passes on Dec. 31, it does represent a psychological barrier. Uncertainty has already curtailed business spending in the U.S. and the detrimental effect of the unknown will continue to take a toll.
Still, as year-end rapidly approaches, the political posturing has intensified to the point where even a compromise would be construed by both sides as failure.
The Democrats, for example, are adamant there will be no deal to resolve America’s fiscal mess unless Republicans agree to higher tax rates on the richest Americans. But they’re mum about their side of that bargain: the cost-cutting reforms to programs like the government’s health-care scheme for the elderly and Social Security, that they are expected to offer in return.
In fact, some Democratic politicians are so anxious that Republicans will drive too hard a bargain on taxes and program spending that they have even suggested deliberately jumping off the “fiscal cliff”. That would involve letting tax rates rise for almost all Americans and allowing major cuts to government spending to proceed. The rationale is that Republicans would become more agreeable to negotiations if the worst-case scenario became reality.
It’s sort of like crashing a car filled with passengers just to prove a point.
In the case of the NHL, the deadline – which is implicit rather than explicit - comes around the point when there are 50 (or fewer) games left in a regular season. And as with the budget impasse, the posturing by both sides has escalated over time.
The team owners have been like the Republicans in their insistence that the status quo will lead to chaos and destruction. The players, like the Democrats, have displayed bafflement and injury at the ferocity of the attack against them.
In both cases, with such partisan positions so deeply entrenched, neither side appears able to comprehend the long-term damage that’s being done to their own interests.
The principal self-inflicted injury, of course, is that voters, viewers and other stakeholders stop engaging.
The most obvious example of that is the widespread concern about “getting out the vote” and encouraging people to exercise their democratic rights. But arguably, it’s precisely this sort of high-stakes brinksmanship that disillusions voters and makes them pull away from the process.
It also means it is harder to make the case for tax increases because the credibility and legitimacy of government is so badly damaged. Who wants to pay more to support a government that identifies a fiscal cliff and then dances on its edge for months, while the economy hangs in the balance?
Similarly, in the case of hockey, fans drift away, corporate sponsorship declines, advertisers find new venues, television contracts diminish and peripheral industries fail. The majority of teams lose even more money.
In both cases, even where the damage can be un-done, it takes years to restore the faith and goodwill that are squandered.
Finally, in budget and hockey politics the rich are pitted against the poor. The Republicans have taken a hard line on increasing the taxes of the top one or two per cent of income earners in the U.S. In the hockey sphere, the rich teams are unwilling to share revenues or benefits with poorer teams.
Whatever may get resolved before 2012 ends, it’s already clear that 2013 has a lot of baggage.
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