I’ve got to believe that most of the world’s developed economies, and several emerging ones that are increasingly influential in world trade, have placed multiple phone calls to the White House, if not both houses of Congress. Let’s tune in on one such call to an unnamed partisan zealot, elected to represent a certain minority contingency that purports to be pro-business and fiscally prudent.
“Yes? Who is it?” the legislator asks as he sips his tea.
“Congressman Sweeney? Thank you for taking my call,” the premier of Sinostanland says. “Listen, I just have a couple of questions for you, if you don’t mind.”
“Sure,” Sweeney replies. “Shoot.”
“Well, I hope it doesn’t get to that” the premier says. “I just wanted to ask what you think you’re doing.”
“Excuse me?” Sweeney puzzles.
“It seems you think that your actions only affect your country, and even with that assumption, you think your actions won’t affect your country’s economy. Essentially, you’re using potential default on your sovereign debt as a threat to get what you want on a health care law that you failed to overturn through due process three times,” the premier says. “The effect will be to trash your own country’s businesses as well as the rest of the world.
“I think you have a saying, don’t you? ‘Cutting off your nose to spite your face,’ isn’t it?”
Sweeney sits up in his red leather desk chair in Washington, D.C., and huffs.
“I have an obligation to do whatever I can to prevent my country from becoming a socialist state, where the individual is told how they should take care of themselves. Our country was built on self-reliance. Nobody needs to tell us what to do!”
“Yes, I know your country’s reputation for stubborn individualism,” the premier replies. “I studied at Harvard and learned something of history, of American culture.
“You’re the country where towns situated in the middle of what you call Tornado Alley have the right to refuse to spend public tax revenue on storm shelters in elementary schools. Don’t you have a humorous award you give such people who choose to hasten their own demise? I think it’s the ‘Darwin Awards,’ right?”
“Look,” Congressman Sweeney says, “You don’t need to butt into our business. This is the way democracy works. It’s messy. It’s supposed to be messy.”
The premier of Sinostanland responds, “I’d agree with you if your mess was confined to your own yard. In case you haven’t noticed, the world’s nations are no longer independent self-determining states. We jointly thrive, or falter, depending upon what each of us does or doesn’t do.
“Our global trade system has created untold wealth and a chance for more of the world’s people to experience a higher quality of life. The flow of goods, services and capital around the world is so inextricably bound together that a tug on the string of commerce in any one of the top 20 economies affects all 19 others.
“And you have borrowed money and sold securities amounting to trillions of dollars to other nations around the world. Your currency is the safety stash for most countries who want to preserve purchasing power when their own denominations inflate or deflate.
“In short, Congressman Sweeney, your desire to win this questionable point of defunding your own legitimately enacted law by putting the world’s economic health in a chokehold is like committing suicide by sinking the densely populated cruise ship you are sailing on. The other passengers don’t appreciate it.”
Sweeney is running out of ways to argue his point, because in the several months that this partisan feud has ensued, he has taken the time to learn a little bit about economics and global interdependencies.
Sweeney was stunned to find that if foreign countries decided tomorrow to quit buying even a modest fraction of the U.S. debt they normally buy, the American government would be instantly insolvent. It doesn’t matter if we do or don’t raise the debt limit if no one will loan us money.
The premier of Sinostanland tries to drive his point home, “Look, congressman, I think you are absolutely right to worry about the U.S. debt and deficit. No question. Some hard choices will need to be made, and soon. But at Harvard, we learned something about business that you apparently haven’t been exposed to.
“Your country’s ability to earn its collective livelihood is dependent upon your lenders’ collective confidence in your ability to provide them a return of capital and a fair profit on the use of the money. As your Benjamin Franklin once said, in his treatise entitled ‘Advice to a Young Tradesman’:
‘He that is known to pay punctually and exactly to the time he promises, may at any time, and on any occasion, raise all the money his friends can spare. This is sometimes of great use. After industry and frugality, nothing contributes more to the raising of a young man in the world than punctuality and justice in all his dealings; therefore, never keep borrowed money an hour beyond the time you promised, lest a disappointment shut up your friend’s purse forever.’
“So my best advice to you, congressman, as your creditor and investor, is: Don’t hold your own government hostage with my money.”
Sewitch is an entrepreneur and business psychologist. He serves as the vice president of global organization development for WD-40 Company. Sewitch can be reached at firstname.lastname@example.org