Obama is handling data negotiations

Face-off over US borrowing limit fans public irritation with DC

Every time I step outside the US, someone is bound to ask me, “So how did that Tea Party stuff happen?” 

Thankfully, American politics never disappoints and there is always a nice contemporary explanation.

The latest is the apparent face-off over raising the US federal debt ceiling beyond $14.3 trillion. The official line is that negotiations have been going on for weeks between Republicans and Democrats but recently stalled and have had to be referred up to the most senior level – i.e. President Obama and the heads of both parties in the Senate and the House of Representatives.

The reality, though, is that everything we have seen so far has been political theatre, and it’s a performance that is becoming increasingly predictable, repetitive and irritating.

Few of those engaged in the earlier negotiations wanted any part of a settlement since, when it finally comes, it will inevitably involve a combination of further stringent budget cuts (anathema to Democrats) and tax increases (anathema to Republicans).

Indeed, the word on the street is that the man who killed these deficit talks, Eric Cantor, the second ranking Republican in the House, did so primarily to push responsibility for any deal not just into Obama’s lap but also that of the House’s top-ranking Republican (and Cantor’s boss), Speaker John Boehner.

So, the whole thing smacked not just of partisan politics but also personal inter-party rivalries at a time when the topic supposedly under debate was whether or not the US intends to welch on its borrowings and show itself up as the biggest deadbeat nation of all time.

OK, trust me on this. There will be a deal on raising the deficit before the August 2nd deadline. The US will pay its debts and raise the money to pay for its budget commitments (and, yes, you did read that right – Washington’s politicians have already agreed to spend money before they have voted themselves the right to borrow it).

But if you were watching this from the outside, amid a slow, jobless recovery, you would be forgiven for feeling seriously peeved. It is this anger that has fuelled the Tea Party and which could still seed a serious ‘independent’ candidacy in the 2012 Presidential election. People have had enough.

By contrast, I was recently at the Design Automation Conference in San Diego and it made clear how events in DC and events in industry have become disconnected. There was no real sense of a strong recovery at DAC, since the feeling was that the event did not deliver many leads for new business. However, companies did feel that they could ‘get through’ because plenty was happening in terms of retaining and nurturing existing business.

Now, high technology has never felt that strongly connected to government – fat defence contracts notwithstanding – but another undercurrent at DAC was that while Washington couldn’t probably do much to help companies grow out of the downturn, it could make things take a hell of a lot longer. And indeed, seemed hell-bent on that course.

There’s a wonderfully colourful US phrase for times like these that, in its family-friendly version, goes, “Keeping the Shinola to shoe level”. Thankfully, that’s where we are right now, but it’s interesting to hear how those levels rise: ‘pixie boots’, ‘Hunter wellies’, ‘hip waders’ but, then finally and apocalyptically, ‘Representative Anthony Weiner’ (Google him if you don't know). That’s right, when you’re really in it, only a political metaphor will do.

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