Hammer Lane Blog

Thirty years on since graduating college, there are only two things I learned in classrooms there that have truly stayed with me. A Journalism instructor, whose night job was reporter for New York’s Daily News, admonished us that “when in doubt, throw it out,” and that bit of rhyming advice has paid off handsomely throughout my career.

The second was my poli-sci professor’s near-constant refrain that “the three principles of American governance are compromise, compromise, compromise.” That oft-repeated alliterative utterance, along with my studies of American history in and out of school, has ever since informed my view of politics and especially of partisanship in this country.

And that is why I could only shake my head in sad disbelief when I learned that yet again the national politics of our times have proven to be so besotten by partisanship that its practictioners would sooner see our Republic mired in the quicksand of finger-pointing than have either side offer the other even the thinnest reed of compromise that they might then together pull our federal government out of the ghastly hole of inaction in which it is intractably if not permamently now stuck.

I am speaking of course of the widely reported failure of the so-called Super Committee of Congress to end the debt crisis.

As The Wall Street Journal put it, “The deficit-reduction super committee, stuck in a partisan deadlock, faces an almost certain collapse—raising the threat of disruptive military spending cuts and a resurgent public anger at Congress as it struggles with the basic tasks of governance…. the committee is expected to announce Monday that it failed to reach its mandated goal of writing a bipartisan bill to reduce deficits over the next 10 years by at least $1.2 trillion.”

Note well that the committee’s “mandated goal” wasn’t just about hitting a specific number, but also doing so in a bipartisan manner.

“The stalemate was the latest sign of partisan deadlock in Washington, which members of both parties do not expect to lift until the 2012 election has clarified which party has the upper hand,” noted a report in The New York Times.

But what should be coming first from these servants of We The People– what they think they need to do to win an election (that is STILL a year away) or doing what is best for our country and all its citizens right now via compromise?

When did the ship of state run so far aground that no less an eminence– and one of the few political commentators still around who can be taken as non-partisan– than David Gergen ends up asking as he did online, “Have they gone nuts in Washington?“ He could have just as well titled his opinion piece: “Founding fathers spinning in their graves.”

In his post, Gergen argues that while “everyone knew that members of the super-committee had deep differences… such contentious disagreements have characterized our politics since the dawn of the republic, and in almost all crises of the past, political leaders have worked out compromises. As Thomas Jefferson put it in 1790, ‘In general I think it necessary to give as well as take in a government like ours.’ George Washington agreed and pushed continually for what he called ‘a spirit of accommodation.’”



“In general I think it necessary to give as well as take in a government like ours.”– Thomas Jefferson

Obviously, I am with Gergen on this. He goes on to say, and I agree wholeheartedly, that “this failure of the super committee represents a reckless, irresponsible gamble by our ‘leaders’ in Washington. It’s difficult to remember a Congress that has put the nation so much at risk in the service of ideology and to hold onto office. Partisans on both sides are grievously failing the country.”

He rightly does not stop with just blaming our good-for-nothing Congress. “An honest assessment would lay blame on the White House doorstep, too,” Gergen argues. “Yes, the President finally put up a plan a few weeks back and made a few phone calls. But he has been exercising the most passive leadership imaginable. Nor have the Republican candidates for president been any more engaged.”

And where does all this leave us, the American people and our business and personal interests? Up the proverbial creek without a paddle let alone a Washington, Jefferson, Adams or Hamilton to get us to the other side, to name just a few of Our Founders– all of whom must be spinning as furiously in their graves as the wheels in Washington are in the rut to which they have been consigned by the myopic and apparently woefully uneducated politicians with whom we are now saddled.

The only saving grace is there is an election coming up. But will enough Americans bestir themselves to turn out in droves enough to truly vote for change in how Washington works? That iwill be a true test of our democracy.

A news story posted today by The Wall Street Journal– under the hed “Fed Expresses Modest Optimism“ — reported that Federal Reserve officials today “refrained from taking new steps to charge up the economy as they expressed some modest optimism about the recovery while they continue to debate ways to bring unemployment down without stoking inflation.”

The WSJ report went on to state that the Fed’s decision-making body voted 9-1 “to leave their easy-credit policies [that’s the newspaper’s description!] unchanged for the first time since August, citing an economy that’s ’strengthened somewhat in the third quarter.’”



Will Bernanke and the Fed be able to boost jobs and control inflation?

The dissenting vote was cast by Chicago Fed President Charles Evans “because he wanted to see additional policy accommodation [whatver that means],” noted the news report.

Hearing the Fed has “modest optimisn” about the ragged economic recovery might not make Wall Streeters jump for joy, but it should bring some albeit small comfort to everyone who lives and breathes and works — or is looking for work– on Main Street.

However, I am very guarded about what this latets pronouncement by the Fed adds up to for two reasons.

Firstly, in terms of “easy-credit policies” what exactly is The Journal referring to? Maybe it is a reference to banks loaning to banks, but I for one have not heard of much if any loosening of credit to businesses or consumers. Certainly not enough to encourage businesses to start hiring again or enough to enable most consumers to buy more than just what is absolutely necessary to sustain their individual standards of living.

Secondly, how much longer does the Fed– and teh White House and Congress, for that matter– need to debate “how to bring unemployment down without stoking inflation” before they actually make policy decisions that would– hopefully– do just that?

Writing in Newsweek way back in May, columnist Robert J. Samuelson contended that Fed Chief Ben Bernanke is betting on embracing “super-easy credit to cut the appalling 8.8% jobless rate; that’s 13.5 million people, nearly half out of work for six months or more. Since late 2008, the Fed has held short-term interest rates near zero. To cut long-term rates, the Fed is buying gobs of Treasury bonds and mortgage securities: $1.725 trillion from late 2008 to March 2010; an additional $600 billion from last November through June. These purchases are known as QE1 and QE2, for ‘quantitative easing.’”

But Samuelson pointed out that it’s questionable whether “all the pump-priming” is aiding the recovery or boosting inflation. “The economy’s fate may hang on who’s right,” he wrote. “Studies by Fed economists are, not surprisingly, supportive. One estimated that QE1 and QE2 lowered long-term interest rates by about 0.5 percentage points and saved nearly 3 million jobs; the jobless rate otherwise could have approached 11%. Many private economists are less impressed; they suspect the benefits of QE1 faded with QE2.”

I am not an economist, a central banker or a politician so I won’t even hazard a guess as to whether Bernanke’s bet will in the end pay out.

But as a student of history, I know that past financial crises, no matter their root cause, that this country endured were ended– or at the very least steered toward an ending– not by endless dithering but by bold governmental action expressed by political leaders who had the ability to garner the support of both business interests and consumers to, depedning on the situation, curb inflation and/or put Americans back to work.