As an international student at HBS, I was exited when I found out that my 2 year MBA in the US would coincide with the presidential elections at the end of 2012. The election of the US president must be one of the most covered political events in the world. And on top of that, I was looking forward to being part of the whole craziness leading up to election day: the debates between the candidates, the aggressive adds on TV and the tons of random discussions between people on the street and on campus. I experienced all of it… and loved it.
Little did I know that less than a year after the presidential election, I would be part of another turbulent political moment in the US: the Shutdown! According to Wikipedia, a government shutdown can best be described as “a situation in which Congress fails to pass authorization for sufficient funds for government operations.  the government stops providing all but “essential” services at first . Federal services that may continue for a time after a shutdown include the National Weather Service and its parent agencies, medical services at federal facilities, armed forces, air traffic management, and corrections (the penal system).”
So, here I am in the middle of the 18th American government shutdown in history. The main issue causing the current shutdown is a strong disparity in opinions between Democrats and Republicans on the Affordable Healthcare Act, aka Obamacare. In short, it is the result of political games between both parties. Shutdowns have often been used as an ultimate negotiation technique, which has led to 17 shutdowns in 35 years (an average of one every 2 years!) with an average length of about 6 days, with the longest one lasting for 21 days at the end of 1995. Future will tell how long this one will last.
Until now, I have barely been affected by the current shutdown. Most services continue normally. The one issue I had is that certain online databases run by the government have been taken offline (which seems counter-intuitive to me, as taking them offline might be more work that letting them run) – see the screenshot attached. Other people seem to suffer more from the shutdown. About 700.000 American officials have to stay home from work… and will not get a paycheck. Tourists are being kicked out of (government-run) national parks. And maybe more importantly, financial markets might get nervous about this new political problem. With the US expected to reach its current debt ceiling on October 17th, the lack of an agreement between Republicans and Democrats might lead to the US not being able to fulfill its (international) payment obligations. Will both parties want to play the game that hard?
I attended an interesting talk at MIT by a former Associate Director of The White House Office. He explained some of the dysfunctions in the current political system in the US leading to these kind of shutdowns. Interestingly so, he pointed out that most of the discussions between Democrats and Republicans are linked to a relatively small part of total government spending, and hence would not fundamentally impact the overall government budget.
Anyhow, future will tell if this shutdown is just a minor hick-up or if it is history in the making. For those that want to keep track of the length of the current shutdown, have a look HERE. For those that want to know how the average American feels about all this, one can always count on Jimmy Kimmel to go out on the street and to ask the right/wrong questions to the right/wrong people – “Would you prefer the Affordable Healthcare Act or the Obamacare Act to be enforced?” Did I already mention that they are the same? And what do guns have to do with it??? Find the link HERE. Enjoy!