To those of you who may not believe that social mood matters to politicians, I bring to your attention the bipartisan press conference held today at the White House. Because politicians are constantly running for office even if they have just been elected, policymakers respond to changes in social mood better than any other group. There is nothing like a quick 1,000 point drop in the Dow Jones Industrial Average over concerns about the impending "fiscal cliff" to bring players together in well-choreographed bipartisanship. We shall soon find out whether or not this meeting was just for show or a more meaningful response to a very serious issue.
Unfortunately, as I mentioned last week, I am not optimistic that a compromise will be reached by the end
of the year. Raising taxes on the wealthiest Americans will generate an extra $100 billion in revenue. Considering the government is running a trillion dollar deficit each year; where is the other $900 billion going to come from? Higher taxes on the middle class? Spending cuts? And according to the meeting today, this is all going to be accomplished by Christmas. Sure is going to be an interesting few weeks!
