With Fiscal Cliff Impacts Emerging, President and Congress Will Be Blamed


Anyone who doesn't own a dog or like them might find it hard to believe just how much of what we say to our canine companions is actually understood. For those of us who are doggists, all that is needed to confirm this effect is to recall one of those times when your pooch has torn up a newspaper or otherwise trashed your house, and how badly they take it when they get their verbal reprimand.

"What did you do?!" all dog-owners have said to their pet at one point upon discovery of the calamity.

Of course, this rhetorical question comes far too late to make any difference to the disaster at hand, yet the weight of its message and impact of its tone have an unmistakeable demoralizing effect on the offending beast.

Unfortunately, the collective frown of the nation does not seem to have the same effect on our elected ''leadership'' in Washington right now, as anecdotal and economic data emerge to confirm our fears that the "fiscal cliff" is more than just a beltway battle over taxing and spending.

Just today, we have no less than three different gauges of the holiday shopping season, all of which imply a downshift in spending growth and optimism. Americans became skittish after gridlock in Washington soured our moods at the most important and festive time of the year, a top story from Bloomberg News reports today.

And it's not just shopping that has taken a hit. Executives at businesses both large and small say the threat of the unknown has sapped their confidence and hindered their decision-making long before the "Cliff" became front page news.
Even General Electric (GE) CEO Jeffrey Immelt, the seasoned boss of one of the biggest, most diversified conglomerates on earth, is showing signs of cliff fatigue. A front page story in The Wall Street Journal today quotes the normally upbeat Immelt as saying he's been dealing with uncertainty "for nearly two years now."

Other corners of the economy, such as housing, have also been trying to keep their ''game face on" so to speak. But as the talks drag on, degenerate and fail, maintaining optimism is becoming increasingly hard, as strong(ish) trailing data give way to souring forward outlooks.

Nowhere will the sweeping impact of the fiscal cliff and its self-inflicted ineptitude be made more clear than in the fourth quarter earnings/2013 forecast season. In just three short weeks, this mid-January ritual will surely be a stream of soft results and tentative outlooks paraded beneath a singular category of explanation (or excuse-making): fiscal cliff uncertainty.

Even if, by some miracle, the president's truncated Hawaiian vacation turns out to be a catalyst to bridge the divide and, indeed, broker an agreement between Congressional negotiators, it will still be too late, since the damage from their inaction has already been done, cliff or no cliff. Good deal or bad deal.

Just like that puppy that ruined your favorite slippers or tore apart the sofa, all we can do now is look at them sternly and say, "What did you do?"

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