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Whenever someone tries to define the art of writing, I often read what they have to say. Yes, I am looking for some defining characteristic about myself and of course, seeking some evidence of how I conduct myself in my craft.Roger Rosenblatt often takes a look at my world of writers most recently in his book “Unless It Moves the Human Heart: The Craft and Art of Writing” and even more recently in an essay in the New York Times Book Review.
He wrote: “writers answer questions no one asks. Others tell you what they know. Writers imagine what they know.” Mr. Rosenblatt focuses much of his writing energy in pursuit of the mystery. Which I suppose is what all writers do. And when writing about the world of finance, the mysteries are often right in front of us. He suggests that as a group, “we look as weird as kid detectives,” adding that when we do, we are guilty of “pursuing criminals of our manufacture, and making nuisances of ourselves.”
We are detectives, the Nick Charles, Sam Spade, Lew Archer type. “We want to catch the bad guys, tromping around,” as Mr. Rosenblatt explains, “in the murky zones of good and evil, right and wrong, justice and injustice, so that in the long run, we may settle on the good. We wonder is there is any absence of evidence knowing that there is probably evidence of absence.”
Now one of the most difficult places any writer, specifically one who chooses to write about finance is how to drag from the shadows the conclusions while the shadowy world of politics lurks in the background.
In several weeks, we will know whether brinkmanship over the debt ceiling, a show as crazy and illusory as anything staged by Cirque du Soleil, will be raised, kept the same or in my opinion, should be Congressionally voted out of existence.
Few of us know who to listen to and when it comes to politics, we tend to listen to those who conform to our own thinking in the past. But the truth about the debt ceiling, the evidence as it were, has been spelled out in both political and apolitical arenas to such a large degree, offering so much information we no longer know who to believe.
Yes, Congress should raise the debt ceiling. As Jon Stewart suggested the other night, we can’t park our country down the block in the hopes of avoiding the Chinese repo man. The world depends on our resilience, our “good faith” promises and us.
Yes there are consequences if the country defaults. They are serious and long-ranging and shortsighted politicians can honestly profess that the world won’t come to a halt simply because we can’t pay our bills. Nothing as large as the US will grind to a halt. A ship like the Titanic would need 2 nautical miles to come to a complete stop and that’s with the engines running in full reverse. But it will eventually stop.
As a writer, I believe you should know two things: the debt ceiling should not be there in the first place as I mentioned removing this problematic debate from the world of politics instituted in the first place to give Congress a say-so in the debt accumulation. And that debt, no matter what anyone tries to suggest, takes as long to eliminate as if does to stop a ship.
But as it slowed, here’s what would happen: interest rates will rise. This doesn’t make the debt go away. It simply makes it harder to borrow. For Uncle Sam, for you, and for the businesses that are what one party continues to believe are the engines of job creation. Now Uncle Sam has had no problem borrowing to keep the possibility of recovery in sight and you as a consumer are witnessing some of the most favourable borrowing rates in the history of borrowing. In spite of that, businesses haven’t seized the opportunity to borrow to grow their businesses. Instead, they simply refinanced more costly debt. Even Federal Reserve Chairman Ben Bernanke pointed out, he would have little in his arsenal to battle such a shift.
Add that up and unemployment will rise. And consumers will pull back further. The stock market will falter making retirement investors less prone to increase contributions. And August 2nd will arrive.
This my friends is a dilemma faced by all writers who fancy themselves prognosticators around the first of January and who think, that somehow we can see evidence of crime where none has yet to be committed. In the absence of evidence, we have the evidence in absence. None could have predicted what is about to happen and none who thought they could, would want it to. Making predictions about the world of money is the stuff of flashlights casting illumination into dark corners. In short, this is the way out we tell you. None of us saw this.
So the coming months will unfold with a certain reliability and an undeniable unknown. Our point-of-view will be all that matters. Our search for the criminals, as seekers of guilty parties will continue with our financial streets growing less safe in the process. We are neck deep in clues and motives and like all great mystery writers, we will be working alone to try and solve our personal outcomes.
It’ll be easier with the ceiling being raised and easier still with no ceiling at all. But using the debt ceiling as a political tool will make it more difficult for everyone and like every crime, filled with unintended circumstance.
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