If our country were run as business, both political parties would be fired. Over the past month, we have witnessed a series of stunning management failures on the part of the congressional Republicans and President Obama.
First, we have a partial shutdown of the federal government inconveniencing millions of people. Second, by even allowing for the possibility of a default on our national debt, congressional Republicans were guilty of criminal negligence. Never mind the recent rally in the stock market following the temporary budget agreement, our country will pay a long term cost in the global capital markets.
Simply put, our reputation as a credible borrower has suffered. As was noted as far back as the 1960s, the United States is privileged to be able to borrow in our own currency. That means instead of actually earning income through exports or attracting capital from abroad, all we have to do to pay our debts is to print money. Other countries, such as Greece and Portugal, are not as fortunate.
As a result of putting default on the table, not once, but twice, we are now in the process of losing our monopoly status as the world's reserve currency. As a result, the dollar will be weaker and interest rates will be higher; not necessarily today, but gradually, as global portfolios adjust to reflect the loss of our international credibility.
If you think this notion is pure fantasy, I would call your attention to the late 1970s, when the world did not trust the inflationary policies of the Carter administration. At the time the U.S. was forced to borrow in foreign currencies to defend the dollar. It can happen again. Thank you congressional Republicans.
If this weren't enough, we have had a failure to launch healthcare.gov, the entry website for purchasing health insurance under the Affordable Care Act, more commonly known as Obamacare. The administration has had two and a half years to develop a website and all of the necessary back-end systems to enable Americans to purchase health insurance on a government run exchange. After all of that time and hundreds of millions of dollars, the system crashed on its first day, and it continues to fail. Not only is the front-end failing, the back-end is failing as the participating insurance companies are receiving the wrong information with respect to applicants and qualified dependents. This is not a mere glitch, it is a system failure.
Even more striking, Health and Human Services Secretary Kathleen Sebelius noted on CNN yesterday that President Obama wasn't aware of the problem until after the website was launched. Hello! President Obama is not a chief executive. He is now learning that there is a real difference between making policy and implementing policy. The real work is in implementation.
Now, I do not expect the president to be sitting in the Oval Office writing computer code, but I do expect him to be briefed at least monthly on the status of his signature program. He should have been familiar with all of the "deliverables" and "milestones" associated with the law. It is not even clear there was a senior White House staffer in charge of monitoring the program. Only yesterday we found out that former Acting OMB Director Jeffrey Zients will be in charge of the "tech surge" in the Department of Health and Human Services. All I can say is that if we had a real chief executive, Kathleen Sebelius would be fired.
Given what has happened in the past month, it is no wonder a majority of Americans want to replace the entire Congress and it is no wonder that the usually administration-friendly Jon Stewart's "Daily Show" has been offering the most biting criticism of the rollout of the health insurance exchanges. The government is not working and most Americans know it.
David Shulman is a retired Wall Street executive. He is currently Senior Economist at the UCLA Anderson Forecast and is also affiliated with Baruch College (CUNY).