THE BLOG
03/06/2013 10:24 am ET Updated May 06, 2013

What Happened to the Dreaded 'Fiscal Cliff'?

Remember the dreaded "fiscal cliff"? It was all the rage in December. The media hyped it. We were told that going off the "cliff" would lead to economic catastrophe.

What happened? How did "sequestration" -- a banal, bureaucratic, deliberately opaque word -- replace "fiscal cliff" in the media and in Congress?

The explanation is simple. Wall Street and most major corporations and investors came to recognize that the "cliff" was only a danger to the little guy. Consider this from the on-line New York Times:

Experts estimate so-called budget sequestration could cost the country about 700,000 jobs, but Wall Street doesn't expect the cuts to substantially alter corporate profits or threaten stock markets.

Indeed not, as the Dow Industrials hit new highs yesterday. So much for a "fiscal cliff" for the suits and operators on Wall Street. But for the government employee facing a 30 percent cut in salary and extended furloughs, a "cliff" is not such a bad metaphor.

Our politicians like to wring their hands while pointing the finger of blame at the other party. But the truth is that Republicans and Democrats would have forged a compromise if their corporate handlers had told them to. But the bankers and CEOs recognized they had little to lose -- and perhaps much to gain -- by allowing the country to go over the fiscal cliff. Oops, scratch that last phrase. I mean, allowing the sequester cuts to happen.

There. Don't you feel better? If your salary or benefits have been cut, you're no longer facing a cliff; you're just a victim of "necessary" or "stupid" sequester cuts.

Remember Obama's "Jedi mind meld" comment? The real Jedi mind trick was getting everyone to forget the scary "cliff" and to focus instead on the banal and largely impenetrable "sequester."

Score another rhetorical and financial victory for the Sith Lords on Wall Street!

Astore writes regularly for TomDispatch.com and can be reached at wjastore@gmail.com.

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