12/04/2012 04:41 pm ET Updated Feb 03, 2013

Holiday Fever

We are in one of those "in-between" periods.

Some of them are annoying.

Once February ends, I am generally in no mood for the "in like a lion, out like a lamb" daily dreariness of early March. I can understand why my co-religionists turned St. Patrick's Day on March 17 into an annual debauch. It was more an expression of frustration at the pace of seasonal change than a window into the soul of the Irish.

There is a different problem with a languid August. By then, the heat of the summer just creates lassitude as everyone waits for the fall. The French take the entire month off. We can't, of course, lest our vacationing -- along with the last vestiges of our social safety net and the not yet fully implemented vision that is Obamacare -- be vilified as "European-style socialism." But they have it right.

Not much gets done in August.

Unlike that period between Thanksgiving and Christmas. Where we are right now. And which is somewhat...


To begin, and this is where America often begins when it thinks about these things, the period is that one time of the year when commerce -- in particular, "retail" -- is one steroids. This year, the stampede that is Black Friday began on Thanksgiving itself. This more or less represents the repeal of the latter, which was initially created by George Washington in 1789 when he proclaimed November 26 as "a day of public thanksgiving and prayer to be observed by acknowledging with grateful hearts the many signal favors of Almighty God."

Among those "signal favors," according to Washington's proclamation, was "the peaceable and rational manner, in which we have been enabled to establish constitutions of government for our safety and happiness, and particularly the national One now lately instituted." In other words, Thanksgiving was created -- inter alia, as we lawyers say -- to thank God for...

The federal government.

Who would have thunk that!

In any case, our first president's intentions to the side, the day has now pretty much become a national prelude to... shopping. And shop we did this year. According to the reports, Black Friday (which began shortly after dinner on Thursday), followed by "Shop Small" Saturday and "Cyber" Monday, produced more than $62 billion in sales -- $59.1 billion of that spending occurred over the four-day weekend, about 40 percent of which was online. "Shop Small" Saturday accounted for $5.5 billion in sales and "Cyber" Monday had $1.5 billion -- both records. All sales figures were substantially above last year's figures, and in total, 247 million shoppers either visited stores or shopped online.

A little less than three weeks before this shopping spree, Americans went to the the polls to elect their president. At that time, about 127 million of them actually voted. Three weeks later, 247 million of them went shopping. In other words, there were about 120 million more shoppers than there were voters. Now, the "shopper" figure may be plagued by some double counting. Some people no doubt made more than one purchase over the weekend-plus-Monday's orgy of commerce, and that 247 million number would therefore have to come down to reflect actual individuals. But still in all, a lot more people shopped after (or on) Thanksgiving than voted on Election Day.

So take that, George Washington.

In any case, there are now 21 days 'til Christmas. We used to distinguish between "days to Christmas" and "shopping days to Christmas." But now, every day is a shopping day. So the math is less complicated. During this period, there will be office Christmas parties, relatives who undergo their annual holiday meltdowns, millions of visits to thousands of Santas, talk radio's now annual claims that liberals are taking "Christ" out of Christmas, and...

Incessant talk about the so-called "fiscal cliff."

Which is to economics what those old plastic trees were to Christmas.

Entirely artificial.

The fiscal cliff was created by politicians who held raising the debt ceiling hostage to their anti-tax, anti-spending crusade. They did so in the midst of an anemic recovery that followed a near depression, the only solution to which was a Keynesian stimulus, which they generally oppose. To raise the ceiling, Congress passed and the president signed a sort of mutual suicide pact -- if some agreement on taxes and spending is not reached by December 31, the tax rates on January 1 will return to the Clinton-era rates (39 percent at the high end, as opposed to today's 35 percent) and there will be big cuts in both domestic and defense spending. The combined effect is predicted to be a drop in annual economic growth of about 1 to 2 percent over the next two years and, potentially, a new recession.

The "fiscal cliff" is artificial for two reasons -- one metaphorical, the other real. As a metaphor, the notion is just false. It suggests that the fall off in growth (the "cliff," as it were) will somehow be the fault as much of those who refuse to reduce the deficit (the liberals) as it will of those who refuse to increase taxes on the wealthy (the conservatives). But it won't be. The loss in growth -- and this is where the artificiality becomes real -- will be a function entirely of the austerity the suicide pact enforces. If taxes on middle incomers (but not the super-wealthy) go up and spending goes down, that is austerity and that is what kills growth and creates a new recession. If taxes on middle incomers do not rise and the spending cuts are targeted, you do not decrease growth; at the same time, you nominally lower the deficit by improving the government's balance sheet on the revenue side.

There are some signs the cliff will never be reached. Having lost the last two presidential elections (and five of the last six if you count 2000 correctly), the GOP is now being hoist on a demographic and ideological petard that it quickly needs to unshackle itself from if it is to win nationally in the future. This means appealing to more than the 1 percent (or their wannabes) and religious fundamentalists, ending its alienation of Hispanic voters, and becoming pro-growth. Obama is proposing a pro-growth and relatively painless give-up on their part -- the rich pay more but everyone else stays where they are and draconian spending cuts are significantly softened; he is doing this in a post-election world where the polls say voters will hold the GOP accountable, as they should, for the anti-growth austerity the "cliff" tries to mask.

This is, as Bill Kristol told them shortly after the election, hardly a bad deal for the GOP. It allows them to retain their no tax bona fides with most of the country and doesn't undermine long term deficit reduction.

They will probably accept it, or some version fairly close.

If not...

There are 21 shopping days 'til Christmas.