The hour when the U.S. tips over the fiscal cliff is getting closer. Meanwhile, politicians are focused on election day.
Wall Street was worried, now it’s terrified.
According to Politico, Wall Street CEOs have turned their fear into action. JP Morgan CEO Jamie Dimon, Goldman Sachs CEO Lloyd Blankfein and more have signed on to a multi-million dollar ad campaign to build public support for a budget deal and force Congress to enact something balanced — one that looks something like the Bowles-Simpson compromise.
In short: The CEOs want legislators to stop kicking the can down the road.
“Imagine what kind of stimulus it would be if politicians just reached some kind of long-term budget agreement to eliminate all this uncertainty?” Goldman Sachs chief Lloyd Blankfein told POLITICO in an interview. “It’s not that it’s easy to do. It will require some political sacrifice on both sides. But the solutions are so clearly within our means.”
They’re even including raising taxes in that solution. Naturally, that pits them against some powerful forces in Washington — namely, the Tea Party and anti-tax activist Grover Nordquist, who for years has had conservative lawmakers sign a pledge to never raise taxes.
Here’s what Nordquist had to say about this (from Politico):
“The Paul Ryan plan brings the budget into balance, is not a net tax increase and reduces spending as a part of GDP and pays off the national debt as you go out the door,” Americans for Tax Reform’s Grover Norquist said. “This idea that you have to trade entitlement reform for a tax increase is put forward by Democrats who when they had power didn’t do entitlement reform and don’t want to do entitlement reform. Democrats just want GOP fingerprints on a tax increase.”
Detractors, of course, say that the Ryan budget is incapable of fixing our fiscal problems because it doesn’t raise revenues.
On top of that problem, there’s a credibility issue. In the past few months, every time a Wall Streeter has gone down to DC, it’s answer for something terrible that’s happened (think: Jamie Dimon after JP Morgan’s massive trading loss or John Corzine answering for missing customer funds at MF Global).
Either way, good luck gentlemen, you’re going to need it.