I try to stay away from politics because people are usually very polarized and emotional in their political beliefs. But today, with the “failure of the super-committee” in the headlines, I am compelled to say a few words on the topic.
Imagine that you have a grown son, David Cole, who is 34 years old, married to a great positive girl. David, or D.C. as you have always called him, hit the ground running after graduating from Yale and now has one kid in 3rd grade, one kid in kindergarten, and a third in the oven. He landed a good job with IBM as a major accounts salesman when he graduated from Yale, worked hard, had a few truly dynamite years where the commissions were generous. He bought a substantial 4,500 sq. ft. five bedroom in Barrington Hills, financed two german luxury cars, joined Bushwood Country Club as a junior executive member, and recently bought a time share in Tahoe. The bills were being serviced but his family budget was very tight.
Two years ago, D.C. showed up on your doorstep for a loan. “Mom, Dad, I’ve had a lean year. I was transferred to a new data warehousing division at IBM, the product is not as solid as it should be, it isn’t selling well and the commissions I was counting on are not coming through. I’m sure that they will fix the software soon and you know I’m a top gun sales professional. I need fifty thousand to get me over the rough patch but I’ll pay you back over the next two years.”
You don’t like it, but you agree to loan David the money with no interest. The next two years pass and you can’t help but notice that D.C. is living larger than before, a new Benz sits in the driveway as a replacement for the previous one that was only 4 years old when traded, his wife shows up for the family traditional Sunday brunch invariably wearing new shoes from the boutiques of the Galleria, and the 3rd grader is sporting her own Apple 4S smartphone. You ask D.C. about when he plans to start paying you back several times over the two years. The answer is always flavored with excuses and really soon Dad is the ultimate message.
Today, D.C. is back on your couch in the den, hat and Starbucks in hand. “Mom, Dad, over the last years, I have borrowed more than I should have and I’m now deep in debt with credit cards, the house, and my margin account at Merrill. I’m in danger of not making my payments, losing my house and my cars, and it turns out that D.C. Jr needs to go to a special school that helps kids with ADHD. Please give me another $60 K and I’m sure that I will turn this around.”
What would you do?
I would bet that an austerity discussion would follow. I think all of us would discuss the Bushwood golf membership, the shiny cars, and the real need of five bedrooms in Barrington Hills when Peaceful Valley has great schools and good value. D.C. argues how he “needs” all of it, every bit, to live his lifestyle. “I can’t earn big commissions if I have to take clients to lunch in a Honda, Dad – you just don’t get it.” More revenue is coming – he will get the generous commissions again soon – the loan is just to bridge this year’s budget. It will turn around.
Our elected politicians in D.C. are not being adults. More and more revenue squandered (revenue sounds better than taxes so the pols have renamed it) does not get Washington D.C. or America a permanent fix. It is time to downsize the government, pay down some debt, live within our means, and save for a rainy day. Why can’t some not see the parallels with D.C. and the advice that they would immediately and vigorously give their own son?
I believe America’s best days are in front of us. We need to hurry up the process. We need to elect a new administration and demand serious bi-partisan cooperation that actually does their job — making tough adult decisions for the future of America — rather than the good’ole’boys that simply fight for their own re-election. Lets stop electing life-long politicians. I’m all for electing candidates who are actually qualified and experienced at running big businesses well. We need brave leadership and financial common sense, no matter which party each people’s representative is affiliated with.
The super-committee was not asked to come up with a huge budget haircut, relative the US GDP or tax revenues or current spending, but they super-failed none-the-less. Time to elect some adults to D.C.
It is not up to gentlemen in the picture above – they just had their chance to be all-stars for the people. It is up to us to demand that our representatives start acting like adults. It is up to us to elect qualified leaders. This is not about the 1% versus the 99%. This is not about more revenue to pay for Bushwood and healthcare for all. This is not about capitalism being broken. This is 100% about the U.S. government moving to a four bedroom in Peaceful Valley and giving up the timeshare in Tahoe.
Washington needs to fix just one core-issue, well. Pick one place to start. Fix social security. Now. If they fixed one thing, people would regain confidence in them and they could move on to big issue number two. Throw the American people a bone and optimism will return.
I.M. Optimism Man