Entry 183: The Wile E. Coyote School of Economics

No doubt you’ve heard politicians and the media talk about the “fiscal cliff” we are rapidly approaching as if the entire country was Thelma and Louise. There is a lot of confusion about this, and about what exactly happened to Geena Davis’ career, so allow me to explain it to you in layman’s terms.

Investors are worried, and financial pundits are in a frenzy, all because something or other is going to happen on January First if Congress doesn’t agree on something or other.* I think that’s about the size of it. Oh, and Geena Davis made this big-budget stinko movie called Cutthroat Island and never really recovered.

The reason why John Boehner and Harry Reid** are holding hands while speeding toward the precipice in their blue convertible has something to do with the last argument they had, which was about something called a debt ceiling. I’ll use a cartoon analogy to clarify this so that even you can understand it.

Let’s say the country is Wile E. Coyote, and it’s trying to catch Road Runaway Inflation.*** The country has just purchased an ACME trampoline (for millions of dollars) because it thinks Road Runaway Inflation is going to be on an overpass, but the country puts the trampoline in the wrong spot and instead of bouncing up next to the overpass so it can grab Road Runaway Inflation by the throat, it bounces right toward the bottom of it so it can get a concussion.  Fortunately, the top of its bounce is just beneath the bottom of the overpass (the debt ceiling) and, defying gravity, the country pauses in mid-air long enough to hold up a sign that says “WHEW!” Unfortunately, while it was doing that, Road Runaway Inflation has raced under it, looked mischievously at the audience, uttered it’s trademark slogan “DEBT DEBT,” and sped off with the trampoline so that the country crashes into the ground. Meanwhile, the ACME Boomerang Rocket, which the country launched at the beginning of the cartoon, has returned. It flies between the country’s legs and carries it over the nearby fiscal cliff where it suddenly runs out of fuel. Again defying gravity, the country and the rocket hang there a moment while the country holds up a sign that says “HELP!” and then the country plummets to the canyon floor, crashing with a puff of smoke.

Is the situation clearer now?

Look, here’s all you really need to know: Just as it did with the debt ceiling crisis, Congress will reach some sort of compromise that postpones anything resembling an actual solution. And, as a result of partisan politics and inaction, something bad will happen, but it won’t be as bad as the media are telling us it will be. Maybe, for instance, the country’s credit rating will be lowered and everybody will be screaming about it and the market will go down although nobody without a finance degree will know exactly what it means that the country’s credit rating has been lowered except that it doesn’t sound good because we know what it means if our credit rating gets lowered, and we’re wondering if the government will now have trouble getting a loan so it can remodel its kitchen. Obviously, the government should have responded to one of those e-mails offering free credit reports.

Besides, if the consequences of going over the fiscal cliff will be so bad, how come none of the TV experts can agree on what those consequences are? Listening to the pundits, you’re not sure whether we’re going to fly over the cliff and fall to a fiery death or fly over the cliff and discover there’s a ledge two inches below it. Maybe it doesn’t matter…as long as we don’t look down.

The fact is that whatever happens to our economy as a result of the fiscal cliff will be predominantly caused by people making such a big deal about the fiscal cliff. An irrevocable law of looming disasters is that talking about them makes them happen. I can explain this with The 3 Stooges. In their famous “lost” short, The 3 Stooges Go into the Antique Business, the owner of the antique store gives the hapless stockboy (Curly) a priceless Ming vase to carry across the room and Moe says “Be careful with that, dummy; it’s a priceless Ming vase,” and as soon as he says that, you just know Curly is either going drop the vase or cause some sort of Rube-Goldberg-like chain reaction that results in the total destruction of the entire building and everything in it so that he ends up standing there in the rubble holding the undamaged vase which, of course, he will drop when Larry bumps into him.

That gives me an idea. Maybe the media could be a little less dire about the fiscal cliff.  Maybe it could be a “fiscal banana peel.” The country’s finances would take a comical pratfall, all the other countries would laugh uproariously, and we could go back to our lives with maybe just a slight laceration to our 401k’s.

See you soon.

*Disclaimer: I have absolutely no clue what I’m talking about in this entire post, which means I’m writing from the point of view of the average American.

**Both of whom have something to do with Congress, as I understand it. There’s someone named Pelosi in there, too, I think.  Above is a rare photo of the three of them together at the opening of a shipbuilding plant.

***Actually, the whole fiscal cliff thing has nothing to do with runaway inflation.^ I just liked the play on words with Road Runner.

^I don’t think. (See disclaimer above.)

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