The “fiscal cliff” is all the rage these days, and believe it or not, the media coverage will only intensify as we inch closer to the Dec. 31 deadline for getting a deal done. While most outlets will endlessly quote officials from the republican and democratic parties, the Federal Reserve, and consultancy groups, such experts can only relate to part of the story. That’s why we at WalletHub went looking for some added insight from a few underrepresented (and perhaps unexpected) sources: folks who have their fair share of experience with cliffs.
Professional Cliff Divers
For starters, I spoke with some of the world’s most accomplished cliff divers in order to get a sense of what it’s like to actually go over the edge as well as how to deal with the fears that inevitably accompany an impending dive.
Both David Colturi and Steven LoBue have backgrounds in traditional high diving. Colturi, 23, won USA Diving National Championships in the individual and synchronized 10-meter dives in 2009 and LoBue, 27, narrowly missed a spot on the 2004 U.S. Olympic team. Now, as members of Red Bull’s cliff diving team, they have one of the coolest part-time jobs in the world: venturing to some of the world’s most picturesque locales in order to hurl themselves off cliffs into bodies of water waiting roughly 90 feet below. They obviously understand high stakes, so let’s see what they have to say about the high-stakes economic standoff that we have on our hands right now.
Colturi, whose current day job entails working in a cardiopulmonary academic research lab at the University of Michigan, thinks that part of the problem when it comes to the fiscal cliff is that everyone is too focused on what could go wrong instead of accomplishing the task at hand.
“When doing a cliff dive, it can be really scary … but you just have to figure out what works best for you [in terms of] staying calm and just focusing on the things that you need to focus on,” he said. “If you’re up on the platform and you’re thinking, ‘Oh shoot, what happens if I smack or get a bad takeoff, or end up doing all these mistakes that might get me injured or even worse,’ and you’re not focusing on the things that actually are positive points to do a good dive … [that’s] basically the worst thing you can do.”
The good news is that he says cliff divers strive to always land on their feet because people’s wrists, shoulders, and elbows can’t withstand the force of entering the water at speeds of around 70 mph. Let’s just hope that our economy lands on its proverbial feet as well.
LoBue, who teaches diving and elementary physical education when he’s not traveling for Cliff Diving World Series events, also emphasized the mental preparation that goes into cliff diving but built on Colturi’s advice by offering a crucial caveat.
“Keeping your fear in check is definitely something that’s really important, but it’s equally important to make sure that you have some fear because if you didn’t have any, you shouldn’t be up there,” he said. “I took one wreck when I first started. I smashed my tailbone just because I went up there and I was overconfident. I went up there not really respecting how high I was and the consequences that came with it. So I was humbled pretty early on by the impact and don’t take it for granted anymore.”
To recap, here’s the overall advice for our nation’s political leaders that we can glean from the wisdom of our cliff diving experts:
- Respect the consequences of failure, but focus on what you need to do to accomplish the task at hand, rather than what could go wrong
- Visualize success
- Try to land on your feet
After hearing what the cliff divers had to say, I thought, who better to also weigh in on the subject of the fiscal cliff than a leading economist who’s actually named Cliff?
So, I turned to Dr. Clifford W. Smith, who is the Louise and Henry Epstein Professor of Business Administration and Professor of Finance and Economics at the University of Rochester’s Simon Graduate School of Business. Dr. Smith is of the prevailing school of thought that the fiscal cliff issue is merely a manifestation of political gamesmanship, rather than a true cause for concern.
“The most charitable explanation I can offer for the fiscal cliff is that both the republicans and the democrats expected to be in a stronger political position after the election and so they agreed before the election that if no subsequent agreement were reached, the default would be something that neither would like,” Smith said. “In a ‘game theory’ context, they kicked the can down the road, but with a credible commitment to address it after the election. Now that the election is over, it’s time to more seriously address these issues. Looked at this way, I believe that there is a reasonable likelihood of a resolution.”
Even if a deal isn’t reached by the Dec. 31 deadline, Smith believes that falling off the cliff will merely serve to the increase the pressure on party leaders, forcing them to come together and strike an agreement that retroactively applies to Jan. 1. (Hmm, it looks like we were onto something with our Credit Predictions for 2013).
Still, it’s obvious that the fiscal cliff isn’t really the true story here. It simply speaks to broader economic issues and the apparent commitment of politicians to procrastinate when it comes to solving them. A few months back it was the debt ceiling, now it’s the fiscal cliff, and soon enough it will be the debt ceiling again. At some point, someone needs to step up to break this vicious cycle and address the underlying problems.
“I have a hard time believing that this gun to our head strategy is the best way to run the economy. I happen to believe that at its heart, we have a spending problem,” Smith said. “Over 150 years ago, David Ricardo noted that ultimately, there is only one way for the government to make us collectively better off: We need to buy things through the government that we collectively value at more than they cost. And this spending decision is dramatically more important than the financing decision of a) should we pay for it with current taxes, or b) should we borrow and pay for it with future taxes, or c) should we pay for this by printing money. My reading of the available evidence is that much of the spending is for stuff that costs more than we value it (pork).”
So, let’s again condense Dr. Smith’s main points into some actionable advice for President Obama, Speaker Boehner, and the rest of the crew.
- The “Fiscal Cliff” is more of a political issue than an economic one
- Just get a deal done already; we all know it’s coming
- Once the deal is done, find a lasting solution to our economic problems
At the end of the day, we’ll have to wait and see if they take this perhaps unorthodox advice to heart. Oh, and before I go, I just wanted to note that Clifford the Big Red Dog was unavailable for comment on this story!