I also remember when America cared about “who shot JR?” It was a manufactured media event and made the word “media-hype” commonplace.
Shooting the President was horrible, while shooting JR was a simple marketing ploy by advertisers of the Dallas TV show. Now — how does the 24/7 hoopla about the Fiscal Cliff compare to those two past events?
The Fiscal Cliff is very real and contains genuine drama. However, because of the need to find advertisers for the TV news, the media coverage is frantic 24/7, suggesting that chaos is coming — little old ladies in nursing homes will be thrown into the street, milk will turn sour before it reaches the grocery store and dogs will chase cats.
Right now, economists are doing a lot of hand-wringing about this week’s report that there was a large, unexpected drop in consumer confidence from 71 to 65 — duh! Who didn’t expect it? Only economists who don’t watch the news didn’t expect the drop.
As I write this, the futures market indicates the Dow will lose over 300 points when it opens Monday morning. Compare that with the 777 point loss the day Congress failed to approve TARP. This tells me investors still hold out some hope for a deal. (Of course, if there was a “grand bargain” that was permanent and included curbs on entitlements, I would not be surprised to see the Dow rise 1,000 points. A deal to kick the can a short distance will not impress the market).
My expectation is that America will be embarrassed, slip into a slight recession if the fall is prolonged, and then it will continue to be America. This is a time to discuss Democracy 2.0 — NOT a time to panic.
Going over the Fiscal Cliff is a stupid body-blow — NOT a death-blow. Think of it as an excuse to have a drink on New Year’s Eve . . . like you really needed an excuse.