The Difference Between Private and Public Governance, Part Number Whatever

Let's suppose a Fortune 500 company went through a rancorous internal debate about strategic priorities, perhaps even resulting in proxy fights and such (think Blackberry, HP, and many other examples).  The debate and uncertainty makes investors nervous.  So when the debate has been settled, what does the CEO say?  My guess is that he or she will do everything they can to calm investors, explain that the internal debate was a sign of a healthy response to adversity, and reiterate to the markets that the company is set to be stronger than ever.  The CEO is going to do everything they can to rebuild confidence and downplay the effects of the internal debate.

Here is President Obama today, talking about the budget battle

“Probably nothing has done more damage to America’s credibility in the world than the spectacle we’ve seen these past few weeks,” the president said in an impassioned White House appearance.

Good God, its like he's urging a sell order on his own stock.   I was early in observing the Republican strategy was stupid and doomed to failure, but you have to show a little statesmanship as President.


Standard & Poor’s estimated the shutdown has taken $24 billion out of the economy.

If this is true, this number is trivial.  0.15% of GDP (and this from someone hurt more than most) loss from a government shutdown about 4.4% of the year (16/365)


  1. Michael:

    I haven't tried looking, but I'd be curious about the components of the $24 billion figure. Is any portion of that estimated from compensation to the furloughed workers? If so, does that get revised at all if/when they receive backpay for the 16 days they were furloughed?

  2. mesaeconoguy:

    That’s where Obama is an utter failure – he has no self-awareness, and zero capacity for compromise.

    He is a dictatorial fool, and aggressively stupid person.

    The total shutdown impact may actually be greater, as this agreement only kicks the can to Feb. 2014. This means additional future uncertainty, and hesitance and inability to plan for businesses.

  3. mahtso:

    Coke v. Pepsi, Part Whatever -- Does anyone think Mitt Romney would be behaving as the President routinely does?

  4. skhpcola:

    Nobody that actually thinks believes that Romney would be misadministrating the country as is Ozero, but some liberaltarians like to puff up and act like Mittens would be doing all of the same things. It's a character failure of some self-important assholes who think that they are morally and/or intellectually superior to the great Unwashed Masses.

  5. mesaeconoguy:


    He would have AT LEAST 3.5% GDP growth by now, when we need it most, and that is where I part ways with many liberatarians.

    Note: I’m slightly less lefty than Warren, but he’s still dead on with many things, like suing Obama to re-open parks.

    See next comment below for ramifications.

  6. mesaeconoguy:

    The upshot of Cruz:

    If Republicans aren’t careful (and they’re not), they will split their own vote with right-leaning libertarians and the actual “far right” and possibly hand control of the House of Reps to Dems again in 2014, and then you will have full-on direct wealth confiscation and seizure far beyond the income tax to worry about.

    Capital controls, seizure of 401k and retirement plan assets, and a complete re-write of securities law are in your future.

    Plan accordingly.

  7. bigmaq1980:

    This is my fear. The factions within the GOP are demonizing each other almost as fiercely as they do the Dems. Many foolishly think that a third party is the way to go. That would guarantee Dem dominance for however many election cycles until they figure out how foolish they were (my guess would be at least past 2018).

    If so, then it would be a matter of too little too late, as we'd be well on the path of a national "Detroit", since there'd be nothing stopping the Dems on wholesale transformation and spending.

    The defund effort ended up as a fools errand. As any good leader would know, you have to make reasonably sure you have buy-in and support before you push a particular strategy/tactic. Cruz did not build support within the GOP (or sufficient numbers) beforehand to make it work. If he cannot convince his own party to support, how is he going to garner support from the public in general? His effort counted on a groundswell from the public which failed to materialize. Not even clear what was organized to build that either, other than talk radio and a few conservative blogs. As one executive would tell us regularly "Hope is not a strategy".

    There is plenty to be concerned and frustrated with the Obama WH, and a lacking GOP leadership, but there ought to be smarter ways to get to the same place.

    One tidbit: Recent lesson from Greece and Cyprus...don't have all your wealth in one account.