Monday, December 24, 2012

NHL Lockout = Fiscal Cliff

I got to thinking today about the impasse in both the NHL and our federal government and how similar they are.

Both are at the "drop dead" point of negotiations.  If the NHL owners and players cannot come to an agreement in the next two weeks or so, the entire NHL season will be cancelled, the players will go without pay, the owners won't have any games in their arenas and ancillary businesses like bars, restaurants and souvenir shops will be severely impacted.  If the White House/Senate cannot come to an agreement with the House of Representatives within the next week then taxes are going up on everyone in the US beginning 1/1/13 and government spending will be slashed--both having significant impacts on the US economy, likely plunging the country back into a recession if it goes on for very long.

In both cases, the opposing sides aren't event talking to one another.  The NHL owners broke off all talks after the players union made a counter proposal to what the owners had said was a take it or leave it offer a couple weeks ago and no progress has been made since.  Supposedly they are going to be back in contact after 12/26.  The White House and John Boehner haven't really been in contact and exchanging ideas for about a week now, ever since Boehner's Plan B proposal fell through.  The Congress has all gone home for the holidays and the President is off in Hawaii.  No serious talks are forecast for the next week.

In both these cases it is likely that one side or the other (if not both) doesn't want there to be a successful resolution.  The owners at a minimum in a significant portion, don't want the NHL negotiations to work (or at least be a real "negotiation" with compromise on both sides).  I've seen the internal numbers.  The weak teams (Columbus, Tampa Bay, etc.) are BETTER OFF when there is no hockey.  They lose far more money when the teams actually play than if their arenas just sit there unused by the team.  The owners of the stronger franchises want to break the back of the union and reduce their costs further--with ownership like the Jacobs' in Boston not caring if the team plays or not as they are almost a rounding error on their financial statements.  There is little to no impact to their well being when the Bruins don't play.  In Washington the White House and Senate are dying to raise taxes and increase spending on the backs of EVERYONE as that's the only way to move their Socialist agenda forward given the debt we are already in.  If the entire country is bankrupt, Socialism looks pretty good!!  The Republicans in the House meanwhile are significantly beholden to their "no tax" pledge and they only way they can get around that pledge and compromise in some fashion is if the tax rates GO UP FIRST.  Going over the cliff will raise rates automatically and then those same Republicans can say they voted for tax CUTS, despite the resulting rates still being higher than what they had been on 12/31.

These are all cynical arguments I realize but they're about spot on.  In the end I seen the NHL season being cancelled outright and the US going over the fiscal cliff with a slipshod, short term resolution being put through sometime around the end of January.  Enjoy your holidays!!

No comments: