Fiscal Cliff: Does Familiarity breed contempt?

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Maybe its best if we just jump!

About four years ago, I was working as an executive in a company where it became clear just such cuts needed to be made.  I counseled one of the many division presidents who reported to me that the horrible outcomes they were predicting would not happen, and as distasteful and unpleasant as the process was, in the end, her division would be much improved, her employee’s futures more secure, and the morale in her division would also improve.  Needless to say, the president, and likely many of her colleagues—although no others would openly tell me their feelings— did not share this view!  She shared this view willingly, passionately, with me on numerous occasions.  About eight months after the event was complete, the president came to see me to discuss some plans for growing her division.  During the meeting, she remarked how unbelievably to her, just as I predicted, performance had improved, production had increased, employees were happier, and sales volume had grown.  It was just amazing, she said, she would never have believed it.
It is amazing how attached we get to the status quo; how our routines can drive our beliefs and our expectations. We can get so ingrained in what we want to see and how we want things to be that any thought of change often gets met with absolute rationalization for the status quo.  Like this true life example, the predicted disaster is often nothing more than fear postulated as pure justification for no change at all.  The end results typically include increases in productivity, increases in growth, better bottom-line, and more security for employee’s future.  This is a result of our human nature.  On the one hand, we are afraid of change and get satiated by the status quo.  On the other, when the going gets tough and we see people “changed” out of our system, many soon then actually do change.  People change work habits, they change attitude, and they try harder, sell more, complain less and alter all the things they feel are putting them at individual risk.  In other words people then work to not be “changed” themselves!
While, at first people lament the loss of friends and colleagues, unfortunately the reality is quickly those gone are soon forgotten.  The performers are rewarded, in this case by keeping their jobs.  Employees who typically complain, are low producers or make routine mistakes either are cut during these reductions or soon get a clue.  As the initial shock subsides, attitudes mysteriously improve along with work ethic and productivity (at least for a while).
No one ever wants to go through these processes and I certainly have never wanted to facilitate them even though I have done so many times.  But the reality is, more often than not they do make things better.  It is like an old growth forest before and after a major fire. Before the fire, on the surface the forest is a romantic and mysterious place with lots of familiar things that we have grown very comfortable viewing on a daily basis.  But just beyond the surface, often seen but likewise ignored, the forest also has deadfalls, decay, disease, detritus, and lots of areas of risk and problems.  These areas we know of but no longer see. We all know where we can go in the forest that is safe and wonderful, and what to avoid as dangerous and risky.  We see the good things and overlook the bad.  Even if we know the forest is in decline we will hold dearly to the ideal that exists in our mind.  Truly, at first, a forest fire is almost total devastation. But within a few weeks new growth appears.  Biologists who measure such things will tell you that the energy productivity of these new growth fire zones is much higher than that of the old growth areas.

Saint_Augustine_by_Philippe_de_ChampaigneSt. Augustine said,
“Familiarity breeds contempt.”

In this case, it can be said that the status quo blinds us to the painful change that is necessary.  It often blocks us from accepting the distasteful actions that we know we need to take. Like in my business career, if one waits too long to implement these painful acts, sometimes recovery becomes no longer possible.
Perhaps, we are at the same point with government.  Despite the disagreement on the value of increasing taxes to the nation and the potential effect on the economy, there is much less, I hesitate to say little, debate on the ‘need’ for cuts.  Most people seem to now routinely espouse the need for cuts, but they simply cannot bring themselves to proffer any parts of the forest to cut. At the time of the sequestration’s creation, the administration and congress put forth the idea that these cuts would be necessary if… (You can fill in the blanks with the rationalization)  They now both say that they were not really serious about the cuts, they just wanted these cuts to be so dreadful that the debt crisis would be averted. Really?  This is leadership?
It is no longer a serious debate whether or not cuts are necessary.  No, significant cuts are necessary!  Oddly enough, no one disagrees with the fact that we need to make cuts or, that we need to make cuts in sacred cow programs. Yet none of our so called leaders are willing to proffer any serious discussions on the specifics of how much and the methods to use to make these needed cuts. Is it just possible, that we need the sequestration to happen to finally prime the pump to get our leaders to make the cuts that all agree are necessary?
I am not advocating for the specific cuts defined in the sequestration agreement.  I agree that these cuts will be very bad indeed on many levels.  But it appears that there are no cuts that anyone thinks are better to do or are able to mentally consider discussing.  Every potential cut has its own disaster rationalization scenario.  So, St. Augustine’s quote seems to me to be in play for all of us.
No, I am not advocating for these specific cuts.  I am not even advocating for any specific cut.  I am actually advocating for all potential cuts.  Our old growth economy is full of deadfalls, detritus, and layers upon layers of dangerous and diseased areas.  We simply do not have the cojones to collectively agree on any cuts.  Our elected officials know well that if they actually had the temerity to cut something that any one of us prefers to keep; then their future will be in significant jeopardy.  We tell them things like, “we want you to lead,” but if they do, in fact, lead, we are all assured that we will lose something as they lead.  And, as we have evolved over the past thirty years, few of us are really willing to sacrifice for the greater good of anyone.  So if our leaders lead, they know they will not be leading for long.  Who wants to take this bullet?
No, perhaps we just need to take the worst and most painful automatically programmed cuts now, and retaliate against the pain by cutting even more.  Maybe, like I advised the president in that company, we need to take these seemingly drastic efforts now in order to create the momentum to foster the real change that is necessary for our future prosperity.
I have read quite a bit about the areas to cut, and I have spoken to many people on both sides of the aisle about them.  Like everything else, all of us now have our ‘opinions’ as to the various disasters that will befall us should any one, or another, of the cuts happen.  I no longer think any of us knows for sure what any of the cuts will really mean.   I believe that just like my prior experiences we will adapt rapidly to the new normal and both our behaviors and practices will change for the better.  Why do I believe this?  Because in the end, just like in the past, it has to!
Lest at least one half of you who read my stuff,  want to attack me because you perceive there is a republican hidden agenda because I have not spoken about increasing revenue through increasing taxes— I just spoke about cutting—and you argue a valid argument that cutting just hurts the poor not the rich; let me say this!  I don’t think we need to argue about taxes to solve the problem.  The tax argument, particularly taxing the ‘rich’ more is a great political point and has some merit.  No one on either side really believes that increasing taxes on the top 2% will come close to filling the void or eliminating the need to really address the systemic problem—no one!.
I do think that we need to re-address how we tax corporations and how we tax wealthy individuals.  Remember money is nothing but an arbitrary measure of work, value and productivity.  It has been such, since the king of England so long ago used a notched wooden stick, called a ‘tale,’ to track taxes and payments instead of using gold. While I do think we need to address how corporations and individuals are taxed and receive benefits, I also believe that we all need to pay some more taxes if we are going to actually solve the problems.  While I do think the wealthy can pay more, I also think it is the height of hypocrisy to believe that some group of people due to their prosperity has a disproportionate obligation to pay for non-essentials for others who choose to not produce as much, for whatever reason. I believe that the helpless need to be helped.  Few debate the need to solve for the helpless, they are not the issue nor the drain on the economy. I also believe that the clueless and the fraudsters need to be filtered from the equation if we expect to make any system work in the long run. It is in these areas that the seeds of our current crisis have found their root.
When I had the talk with that president years ago, my role was to push each of the presidents off their own fiscal cliffs, so to speak.  As they say, I did not have to like it; I just had to do it.  I was confident that in the end it was necessary and if done timely and completely without equivocation, we would end up with significant improvements in more than just fiscal areas.  Is it just possible that if we jump off the currently looming cliff, that the end results in this case will be vast improvements as well?

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