Grassroots Holacracy

The different skill levels in Holacracy are often compared to the different skill levels in playing soccer. They may be playing by the same rules, but the skill expressed by a child just learning how to play soccer will look substantially than the skill of a highly trained professional.

This is a great analogy as I can attest having followed my children progress through soccer from a young age in the weekend community soccer leagues through middle school and high school. In the beginning they play what I call swarm soccer. All the kids gather around the ball in a swarm and kick at the ball until it accidentally goes into one of the goals. By middle school they have learned the positions and mostly stay near their assignment. By high school, they have learned when they can break the position pattern and when to reform back to that pattern. Each level looks totally different. Holacracy has similar level of development, from still trying to get consensus or approval from the boss, to rigidly holding their roles, to flexibly moving between roles and individual action, etc. I am sure others have observed other patterns at the various levels.

This individual focused analogy between Holacracy and Soccer can be expanded to an analogy at the movement level.

In soccer we start at the preschool level in local community leagues, sponsored and paid for by low cost fees to the players and/or community funded. The teams are coached by parents who may only have a basic understanding of the rules themselves. This feeds into school and traveling teams which have a higher level of financial investment and more skilled coaches which may be a mix of amateur or professional. This feeds into college with more investment and more skilled professional coaches and finally feeds into the professional leagues with a high level of compensations and coaching skill.

At the bottom the population of players is huge. As you step up each level a large number of players drop out until at the top you have a very small number of very skilled players.

The players that drop out are not lost to the sport. They may continue to play in community leagues or pick up games. Because of the experience in the lower levels, they are likely to be fans and supporters of the players that move up. Thus to have a vibrant competitive top level you need a huge base to select and feed the talent as well as support the sport from the sidelines.

Today, Holacracy is focused at the professional level without much of a base. This is why it is so difficult to find an organization to do an implementation with out a highly evolved heroic leader to take the plunge, sign the constitution and buy into the process of giving up control and supporting the transformation. There seems to be an underlying opinion that everyone needs to transform and play Holacracy at the professional level. That playing at the lower level is not successful, that it does not bring value. In my opinion, this is very much a “in the eye of the beholder” judgment. Being successful is determined by your definition of success.

Many small business do not have much of a business process, what they have is usually a random collection of actions that seem to work having tried and failed many times. There is little coherency with a lot of manual checks and cross checks that could be eliminate by implementing a process that generates role and accountability clarity. Implementing Holacracy, even at the simplest level of mechanically following the rules, creates enormous value in the eyes of these small business owners. All without a major transformation in conscious level. Yes, there are subtle shifts and over time even these organizations become more susceptible to a major shift.

I see these businesses as the base level for Holacracy. A potential fertile soil to feed the growth of the higher transformations all the way up to the highest professional level. At this grass roots level is where the real awareness of Holacracy will grow as them more people exposed to the gut level feeling of some value in Holacracy, the more that they will tell their friends and encourage more than an intellectual curiosity. For the past year I have been researching this level by attending small business expos, networking events, user groups and business meetups. I get no recognition that something like Holacracy exists. With a couple minute conversation, I get very positive reactions.

The need is clearly there, the value to these organizations is there, the current structure to get help excludes these 90% of the businesses.

Lets look at the structures for getting help without a full consultant fee structure.

When the Holacracy population was first developing and everyone knew everyone else, the Community of Practice platform was a great tool to discuss issues and get some help/feedback.

Looking back over the past year, it seems that activity in that forum has almost completely dried up. It is being replaced by more open forums on LinkedIn and Facebook. While the subscription for the CoP may keep many of the casual observers away, I think that a major part of the lack of activity, even for those subscribed, is that it suffers from fragmentation because of the “yet another form I need to keep track of” syndrome. I know that I am more likely to pay attention and participate in a forum that consolidates many communities that I am already participating in into one interface.

Facebook and LinkedIn support very global communities. Being part of larger community building services, I believe that they will continue to provide value for the more globally minded Holacracy practitioners for a long time.

These forums seem to focus on announcements of events and blog entries, with some discussion of specific larger issues. What is missing is the personal touch. In a more local setting, many more people would be more willing to ask for help on detailed issues that arise in their business. People need to sit down face to face with people that they are familiar with to get to this personal level. This is particularly true for small business owners.

This is where user groups and Meetups come in. User groups and Meetups fill the same role of providing personal face to face community building. Meetup creates a nice set of tools that is becoming the consolidation point for different interest groups to fine and interact through the same interface. There for, I think that the next level into the grassroots spreading of Holacracy is via Meetup. A Meetup in any location that has a few practitioners, would be the logical entry point to building that local support group to help small business move into Holacracy. The more small businesses that implement a mechanical interpretation of Holacracy, the more that will be positioned to need a deeper level of coaching to get the next level of value.

These initial implements have to be very low cost, possibly free, if the local community can enable it. If we look at some of the most successful services in the world to day, most of them have a free level and a premium level. I believe that creating the Meetup infrastructure is the way to get the introductory implementation, which, as the value of Holacracy is internalized and realized, will enable the transition to engaging the premium services.

This was the model that I was pursuing over the past year. I hope to get back to it sometime in the future to develop it more and try it in the real world. I put this post here to record my thoughts,

mike

Why I am a Holarchist and not an Anarchist

About a month ago, was it really that long ago? I really lose time when I have my head in my app development!  I saw a posting which some of my friends liked, titled "coming out anarchist".  To see the full post:   https://www.facebook.com/TheArtOfNotBeingGoverned/posts/198456046969968

This article really caught me attention and resonated in so many ways.

It supported the non-aggression principle (NAP): That it is immoral for a person to initiate the use of physical force against another person or their property without consent.  
I believe that this one of the most important principles that we could integrated in any social/governance change going forward.

The author focused on the idea: the State is the most chronic and large-scale violator of the NAP. 
I believe that you would have to be in denial to not understand and recognize that as a fact in today's world.   I believe that we can take this even further and include most of the organizations in the world, in particular the largest businesses.  The larger the business the more likely they become depersonalized and worship simple profit to the detriment of  the world ecology as well as continued suppression of the majority of the people over the few leaders. 

The author further focused on voluntaryism – the belief that all human relationships should be based on voluntary consent of all parties, and that no person has the right to enter into a relationship with another person or their property without consent.  
An awesome concept and a guiding force for moving forward.

Where I diverge from the author's conclusion is that this is anarchy. This redefinition fails, a possibility of the parts do not define the whole.  I suspect that the Author is looking for a container to harness his ideals and the label anarchy seemed attractive.   But, anarchy is in its simplest definition, an absence of rules. Anarchy is an unstable state. When humans find themselves in an a state of anarchy, they automatically start to self organize and develop rules.  Often, it evolves into a strong man society where the strong rise to power and use/abuse the weak.  It is possible that a society based on voluntaryism could arise, but human history does not hold out much hope for that succeeding in the log run.

I agree that anarchy allows the formation of a voluntary society, but a democratic society tends to be a bit safer for developing a voluntary sub-culture than anarchy. You are less likely to be killed by citizens of a democracy for participation in voluntaryism than the strong men that naturally arise from an anarchy. In a democracy there are less violent ways to affect the power holders than a violent revolution.  Compare the leader transition in Syria today with the leader transition in the US.

The sense of rule-less-ness that seems attractive is well understood and described in Zen Buddhism.  First as a beginner you don't know any rules, you have little skill, this is at the level of anarchy.  Then you take on tasks that teach you rules and how to live and see reality.  After many years you begin to develop a mastery of the rules.  Eventually you reach a state of mastery where you naturally know when to follow the rules and when to break the rules.  As this is perfected, the master appears to not follow any rules and thus appears to have returned to the beginners mind.  But this is a misconception  the master has not returned to that beginner state of anarchy, but has transcended to a higher state of awareness and responsibility. It is only those with the lack of development that see it as a return the the original state.  Organizations follow the same sequence, from anarchy through sometimes oppressive rules to some transcendent state in the future.

With human organizational development today, we have come a long way from the anarchy from which we arose.  I, for one, would never want to go back to an earlier state. I do value the contributions that each earlier state contributed and the sacrifices of the individuals need to make progress.  Having seen the possibilities of the future, the current strong man model that most of our states and business organizations embrace today has become obsolete and painful to observe and endure.  The principles expressed by vountaryism need to take precedence.  

That can never be anarchy.

The system that I have experienced that provides the best practices to promote voluntaryism is Holacracy.  Holacracy gels all of these great principles into a well defined completely self consistent set of practices for the individual in an organizations and the governance of the overall  organization.  It has a clear path from our current broken organizations to a fully power distributed voluntaristic organization, which both more effective at getting things done and more respectful of the principles of vountaryism.  

Holacracy is alive and well in the world today. It is being implemented with great success in many organizations in the US, Europe and Australia. 

I implore you to abandon the backward banner of Anarchist and join the future under the banner of Holarchist.

Why am I still alive?

You may guess from the title that I have a potentially ultimate life altering story to tell.

Last week we had a big snow storm where I work in Northern Virginia.  During the work week I stay at my condo about a 30 minutes walk from work.  For the past 4 months, I have been walking to work. It is great, kind of a walking meditation and communing with reality at about 3 miles per hour instead of zipping by from behind a mobile box of steel and glass.  I thought, "great, I can experience walking in snow, should be beautiful." 

That morning, the temperature was just above freezing and the snow fell very heavy compressing on the ground semi-melting.  All the snow plows were out and threw all the snow onto the sidewalks.  So there I was slogging through about 5 inches of slush, it was a little like walking in soft sand above high tide at the beach.  What a workout.  I made it to work and was a bit tired. Awesome, I have developed a bit of endurance over the past few months.

After work, I check my blood sugar, I am a 41 years a type I diabetic. Levels are good, eat some melon left by the cafeteria staff and head out for home, confident that I am well equipped for the return walk.  Not much has been cleared from the sidewalks, so a similar slog back home.  All is well as I cross over the commuter rail track about a block from my condo. 

As I pass the rail station and step off a 4 inch curb onto the drive to the station parking lot, my knees buckle.  I think, where did that sudden fatigue come from.  I stumble across the drive and land in a snow drift.  A kind man stops his car and helps me stand up, asking if I am alright.  I say my legs are a little tired and that I will sit and rest on a rail station bench a few feet away for a few minutes.  I sit down, say thank you and am again all alone with my thoughts.

While I sit there taking stock, I realize that instead of gaining strength from resting, I am getting weaker.  I realize that my blood sugar level are steadily dropping.  I need to get some sugar into my system.  I try to get up, but I am so weak that I cannot move my self along the bench, let alone stand.

Ok, time to call for help.  I pull out my cell phone, press the button and now response.   I hold the power button to turn it on and the Nexus icon comes up for a few seconds and turns off. What? I had plenty of power when I left work! Why is it dead now? 

I remember shortly after leaving the building I had received a call. The wind was blowing so bad that I could only understand a word or two.  They said that they would call back later.  As is my habit, I hit the button to turn off the screen and put in in the holster.  Somehow the screen must have locked on completely draining the battery.

There I sit for over an hour at an empty dark train station with a dark winter coat that know one can see from the road.  Nobody is around because all the commuter trains were cancelled for the snow storm.  There was no foot traffic, and I don't remember seeing any cars after the one with the man that helped me stand up.

I realize that I am in real trouble and that I will likely die before some discovers my body the next morning.  Except for a moment of anger as I call myself an idiot for letting this happen, I am completely calm and present with the situation. I don't fear dying and there is no pain or comfort, so don't think that I am suffering in any way.  Actually it was very beautiful. Snow flakes whisking around each on its own errand.  The detail of each wood grain stands out on the post directly in front of me.  Time starts to become discontinuous.  Five minutes seems like twenty, then twenty minutes seem like five.

I look across the tracks and there is a Fosters hamburger restaurant.  Only 100 steps away lies my salvation.  There is only the guy working there, appearing in each window in turn and he goes about his business.  He can't possibly see me as it is quite dark and I am in a dark corner with a dark coat. I think to myself, I really have to get there! 

I must get there, but as hard as I try, I can't move my body.  I am looking at the sign on the post and realize that it is visually fractured.  Angular pieces with letters start to shift.  Then suddenly the rail sign becomes the menu at Fosters with all of the offerings in fractured pieces shifting as I try to focus on some of it. That is really strange! Am I remembering the last time I was eating at Fosters?

Something is touching the fingers on my left hand.  A voice says "Blood sugar 49."   49! I should be fairly lucid at 49, been there done that. What am I hallucinating!

The voice says "Drink this, it is fruit punch." A straw is put to my lips.  I then see a stretcher and am moving onto it. I then am told "move to the bed" as I am helped on to a hospital bed.  I start to gain more mental continuity as they are asking me for my insurance, medical and other personal information.

As I talk to the emergency room nurse, I start to shiver violently, my tee shirt, shirt and sweater are soaked from the the hypoglycemia sweating and I have a bit of hypothermia as the nurse has trouble getting a temperature. Replacing my shirts with a hospital gown, within about 20 minutes, I am back to normal and ready to go home. Call a cab, go home and get back to work at a normal 9am.

I don't remember walking across the tracks to the restaurant. I don't remember being put into the ambulance, the ambulance driving to the hospital or even being wheeled down the hallway in the hospital to the alcove in the emergency room where I recovered.  Except for the few flashes, I was totally unconscious.

So how did I get across the tracks?  I remember someone saying I had collapsed on the counter at Fosters causing them to call 911.  I take this to mean that no-one helped me there.

So it seems my unconscious body saved itself. My mind was not strong enough to move my body and I had calmly resigned myself to sit there. It would have been a very easy peaceful death.  But my body really wanted me to live and when my mind gave up, my body took over. 

People often ask, "why am I alive?", looking for their purpose.  Now I get to ask, "why am I still alive?" My body believes that I still have some purpose to fulfill, therefore on its own volition saved me from a sure death. 

I still seek my next purpose.

Stop Trying to Change the World

Lat night I listened to a lecture by Alan Watts on YouTube titled: Stop Trying to Change the World. It really took me back to earlier years when I was doing a lot of studying Buddhist philosophy, and caused me to reflect a bit.

It seems that I have been running full tilt at trying to change the world for about 7 years.  Seven is significant as I often make major life changes about ever 7 years or if I start something significant it either changes or is dropped after 7 years. Two examples are: my first marriage and time to a black belt and then switch schools and styles.

Before about 7 years ago I never really tried to change the world.  I was pretty easy going and tended to be open to most things. I had an easy life and made the best choices I could with what was in front of me. I rarely got excited or expressed much emotion.  In high school I was so subdued that if you stabbed me with a pin, I would pause to think about it before saying ouch. Really, the ultimate nerd.

Sometime in 2005 I attended a local SPIN (Software Process Improvement Network) meeting.  The speaker was talking about some new concepts in software development in the area that we now call Agile and/or Extreme Programming.  I don't remember what he was calling it, but it caught my interest so I started reading related articles and books.

In 2006 I got the training to call myself a Certified Scrum Master.  I have followed the development in the Agile community ever since.  Used many of the concepts but never got a chance to work in a team that was fully embracing a complete Agile methodology.  However, staying active in the Agile community put me in the place to attend a Agile Philly meeting later in 2006 at Ternary software.  This happened to be, I think maybe one of the first public presentations of a new organizational governance system called Holacracy.

I remember the presentation well, it made a major impression on me.  Holacracy greatly expanded on the fundamental concepts that first attracted me to Agile.  After the meeting I approached the presenter, Brian the founder of Holacracy, and asked how could I join his company. I applied the next day and went through a rather novel and extensive interview process that included a full day simulation.  It was awesome, I learned so much.  This was the first signal that this may not be a good path for me, but I was so over whelmed by the implications of Holacracy and it's value for the future that I ignored my natural tendencies and grabbed hold as tightly as I could.  I tried to do everything I could to implement any piece of Holacracy into my live that was possible for where I was at the moment. And offered to do anything to help spread Holacracy.

So I was in position to attend the first 2 day Experiential seminar, and the first week long Facilitators class, I believe both were in 2007 maybe into early 2008. The Facilitators class eventually became the Certified Holacracy Practitioners class.

I worked with HolacracyOne to try and setup an Into to Holacracy near where I worked in VA, attended the first Washington DC seminar to lend whatever I could to the experience. For maybe a year I was participating in the Volunteer Circle reporting directly into HolacracyOne.  In the fall of 2008 I started a new consulting company I called HelloGovernance (the home for this blog) for the purpose of Holacracy consulting.  This was before the Licensed Consulting Firm policies were created so everything was being created as tensions arise.

In late 2008 maybe early 2009, I attended the first Certified Holacracy Instructor class.  This class was fairly quickly transformed into the current Certified Holacracy Coaches class.  With this Certification and my consulting company, in March I started hosting the first Introduction to Holacracy Webinars.  I saw a need and took individual action to fill it.  In June HolacracyOne started with Intro webinars so I stopped as the need was better filled by H1 and I wanted to keep more focus there than promote myself. I did make a number of sparsely attended public presentations. I found several companies that were willing to attend private webinars.  One company attended an hour long online simulation. It was based on a factious company called Mike's Flower Shop. It actually worked out rather well.

Coaching and training were the areas that long term I really wanted to do with Holacracy.  I have spent almost 6 years working with Toastmaster International to improve my presentation skills and through starting up and mentoring new clubs I worked on my coaching skills. But alas this was not meant to be.  I was doing contract programming which had very little time flexibility and chose that over abandoning my family to energize the HelloGovernance start up I was working on in evenings and weekends.  To much bandwidth to be able to be successful in both.  Still I really learned a lot about myself and consulting.

The effort in 2009 essentially burned me out, so in 2010 I reduced my efforts a bit from Holacracy and started writing Android apps as I had some specific apps that I wanted to use but were not likely to be written by anyone else.  Today I have 2 apps that  well received in their niche markets. Working with Holacracy was still my greatest desire so even to today it is still very much on my mind, constantly searching for ways to contribute of finding a job where I could use it and contribute to the spread of Holacracy.  I have written 2 Holacracy related apps but never published them.

20011 started major health problems leaving me with very little energy to do much more than go to work then come home and sleep.  May 2012 I got a kidney transplant which gave me back my energy.  I believe one of the first things I did when I got a smart phone in my hands after surgery was to respond to a question in the Holacracy Community of Practice.

As HolacracyOne started growing,  I believe I applied for every position. I wanted to help the advancement of Holacracy in any way that I could and the only game I saw was there. 

Never being a fit from Ternary to today, and given that my 7 year cycle is almost up, I am finally getting the message that this is not the work for which I am intended to focus on for the rest of my life.  I think 7 years is giving it a fair try. 

The Alan Watts speech really hit hard.  I so wanted to be involved with changing the world.  I have been elated, disappointed, encouraged and depressed; the greatest range of emotions in my life.  A very interesting journey.  It is time to take the Stop Trying to Change the World path.

I always have ideas to write about in this blog but recently I have not been motivated to actually write them down.  Maybe I will never write here again, who knows, but I know I will always have the ideas.

Holacracy will always hold a special place in me.  As I open up to more possibilities for the expression of my energy, I hope some day to be able to work with it again.   For now I am looking to get back on the meditation cushion as see the world through an even wider lens than the great one I developed studying and working with Holacracy.

Riding the wave

There is a well know adoption curve that looks somewhat like a wave that products surf going through their life cycle.  Just like the surfer, they start well before the main curve/wave with the pioneers.  In this stage new possibilities are created, new ideas, new language.  Soon there is a slight build up of the approaching wave as early adopters discover and use the new product basking in the novelty.  A critical point develops, where the novelty is not enough and a transition to the main wave must be made.  This is often called the early adopter chasm as it is usually very difficult to make the transition to a mainstream product surfing on the massive wave.  While there is excitement in the early phases, with all of the discoveries and new ideas, the real impact is in the actual surfing of the wave. Here you feel the presence of the masses and prove the general usefulness of the product under stress.  Flow state is needed here to maintain the equilibrium to stay on the face of the wave.  Losing the equilibrium can cause a wipe out or even simply sliding over the top and off the backside of the wave.

I have experience the full life cycle through this wave.  In the late 1970's into the early 1980's, I was a contributor to the creation and development of early computer network architectures as a developer, architect and standards body member.  It was an exciting time, creating new protocols defining how computers talk to each other, new ideas about how to use networks.

The company I worked for created a very advanced network architecture well out in front of any other networking product existing in the world at the time. Many ideas we developed into a product came into the open internet many years, sometimes decades later.  The down side was that most people at that time did not know how to effectively take advantage of the features.  The implementation was so big that it could only run on mainframe computers.  Instead, a light weight protocol called TCP/IP satisfied their needs at the current popular level of sophistication.  I watched our network architecture slide into niche markets as TCP/IP took over the world.  30 years later, I recently, helped the last major user complete the transition to TCP/IP.  So I have experienced the full life cycle from birth to death.

Directly experiencing this, I learned a lot of lessons. 

1) Pioneers and early adopters are essential to feed the product pipe line. But don't expect to take what is developed there directly to the main stream. It must be tempered to fit the following:

2) Main stream products must be barely ahead of the current needs of the main stream users.  Not so novel that they cannot immediately see their need and its value. But yet novel enough to be seen as a bit different. It must not introduce concepts that are so foreign that it scares them away from trying it.  It must not be perceived as being bloated with features that do not address some known need. 

Developing and enhancing a product at this precise point is like surfacing the face of a wave, you need to be in flow state sensing the current need of the masses and moving with that need. Staying to far ahead keeps you in the early adopter stage, falling behind put you on the back side of the wave to be quickly forgotten.

The practice of Holacracy directly supports the flow state needed to surf the wave.  The principles of sense and respond apply to both the agility to adapt the product but also in keeping the entire organization constantly aware of the surf board and adapting its form to stay on top of  it.

You Get What You ...

A while back I wrote a blog post titled "You get what you measure" discussing the importance of metrics in the change process.  A couple of days ago I read a blog post at ZenHabits on the theme "You get what you do" discussing the actual change happens in the doing.  It hit me that these two concepts are intimately intertwined. How do you change without doing and how do you understand what to do without measuring.

These two came together recently for me in the area of weight loss. I have been on a steady uphill slope with my weight and became very dissatisfied with how I felt, how out of breath I became and of course not liking looking like a stuffed sausage.  I have heard the story: "I keep reading diet books but I am not losing weight". The punch line is that you cannot lose weight by trying to understand the process, but only by actual practice.

But what is practice?  It seems to me to be a loop of measure, do, measure, do...

Back to my weight.  Several months ago I saw a program by Dr Joel Furman about changing eating habits (life style change) to focus on consuming a diet high in micro nutrients (vitamins, phyto-chemicals, anti-oxidants, etc) but low in the macro nutrients (carbohydrates, fats, protein). One premise is that we over eat because the body craves micro nutrients but the western diet is high calorie but low in micro nutrients.  Thus we over eat and get obese.

So I increased my intake of micro nutrient rich food and watched my high calorie foods. Weight kept going up. So I began to understand that the phrase "watch what I eat" means exactly that; observe the food as it move from my plate to my mouth. It is not a measurement technique, but a placebo in place of actually doing anything to moderate my input.

So with the micro nutrients, my hunger was well contained and my body felt healthier, and I was actually doing something in the right direction, but I did not have any handle on calories. What I was missing was any real measuring.

A couple of months ago one of my best friends at work came in with a high tech pedometer and an app on his smart phone, raving about how measuring his steps and logging his food was helping him lose weight. The device and app came from a company called Fitbit. 

I looked into it.  The system was very easy to use and fairly automatic.  They had a tracker device that would measure steps, stairs, distance, calories burned and if worn on your wrist at night, how well you slept. It would automatically sync through a blue tooth connection to your online account.  They also had a wifi connected scale that measured weight and fat content; which also automatically synced with your account.  Just wear the tracker and step on the scale every day.  The only piece of the puzzle that was not automatic was logging food consumed. With the phone app, you always have a tool at easy hand to do that.

Automatic enough that I would stick with it, I bought the set.  I now have the measurement tools with historical graphs, etc. I need to understand what to do and the motivation to actually do it.

I started just before Thanksgiving and slowed down the gain that first week.  During the 3 weeks after that, I lost 10 pounds.  Seems like a lot but I am a big guy so this might be more like 5 or 6 pounds for someone else.  Most days I meet my goals in calorie intake, and my goal of 10,000 steps and 10 flights of stairs. I feel so much better. My physical fitness has noticeably improved.  Better yet this system feels like something I can maintain for a very long time, ideally a permanent lifestyle change. High in micro nutrients and low in calorie measure diet with goals/feedback in a walking program.

My take away from this experience is that to be effective in making a change in your life, business, anything at all; is to dynamically steer with a constant cycle of measure, adjust, do, measure, adjust, do...

PS, just got this out before the Mayan calendar expires.. ;-)

Over the Cliff

We hear a lot about the fiscal cliff now, not quite as much as we did for the Presidential election and particularly no flood of ads.  However I think that all the rhetoric about how we have to avoid going over the cliff, how the politicians in Washington have to solve this problem before the end is a bunch of hot air.

No need to worry about it.  I predict that we are going over.  I believe that it is pretty much a done deal.

First it is to big a problem to solve in one month.  The politicians are so out of practice in compromising that it will take longer.  The same conditions that caused them to set up the cliff still exist. All the politicians are still saying that they will only accept everything they wanted a year ago.

Secondly, and probably a bigger issue, is that preventing going over the cliff is to neither Republican's or Democrat's political advantage. In fact any move to solve it will bee seen a weakness and be a major political defeat by anyone who blinks.

Most of the Republicans got elected by their district on the promise of never voting to raise taxes and reducing the cost of government.  Many Democrats got elected on the promise of raising taxes on the rich and not reducing the entitlement programs.  If either blinks, then they lose their job next election. And that is what is closest to the heart of a politician (and of course most of us) keeping their job.

But falling off the fiscal cliff solves all of those political problems!

After January 1, the baseline is drastically changed! 

Taxes are higher and government expense is reduced. It is a much better political position to negotiate from.  You can reduce the taxes for one segment of the population without voting for an increase in another.  As far as government spending, it requires some justification to increase any budget.  No one has to vote to reduce a budget and budgets don't just automatically get grandfathered at the old high levels. Everyone politician can claim to be a hero back home where they get elected.

Of course this political victory come at a cost to the economy.  The greatest is the level of uncertainty business and people will feel for the next month and as long as it takes to come to a settlement.  In uncertainty, business will avoid growth investment.  So employment will take a hit.  People will not know how to plan for 2013 taxes.  If they can save for higher taxes that reduces spending.  If they cannot afford the higher taxes, depression and panic sets in.

Given that all of this is pretty obvious and politicians are pretty savvy about protecting their political interest is why I say that going over is pretty much a done deal. I would not be surprised if this is already recognized in backroom deals and that any negotiation that is happening is already using Jan 1 as the baseline.  The question is how fast after Jan 1 will they be able to act.

Even with all this as a back drop, progress can be made if they try to create a number of smaller bills get the low hanging fruit were everyone pretty much agrees and not try to get one huge bill perfect. I have heard some thoughts in this direction, but it would be a new way for congress to operate.

I will check back to this blog entry early January and add some though about how I think I did.