Megan McArdle might be onto something:
In finance, there’s an art known as “Big Bath Accounting” which is used to manage earnings expectations. Here’s how it works: if you know you’re going to have a bad quarter, you look around for anything else that might go wrong in the future, and you decide to “recognize” that bad news now. Inventory looking a little stale? Write it down, man! Customers getting a little slow to pay? Now would be a good time to write off their accounts as bad debt… The theory is that there is only so much bad news people can take in all at once, so you might as well cram all the bad stuff into one action-packed earnings call.
This is a couple days old, but the more you think about it – and the more news cycles turn since ScandalFest 2013 dropped – the more sense it makes that having all this hit at once is a good thing for the White House.
None of the controversies has been what any serious commentator would call impeachable, but each serves to damage credibility. Imagine if they were spaced out a little more. If the IRS scandal broke after two weeks of talking about the Benghazi hearings, and was subsequently followed by the AP/DOJ dust-up breaking a week or two after that, it would be far worse for all the President’s men. Each scandal would be discussed in its own spotlight for a little while, but the timing would still maintain that “Groundhog Day” feeling.
In order for the current blitzkrieg to be as damaging, new information will have to come out fairly regularly over the course of several months. That’s a lot of new stuff that would have to break, like the President said, there may not be that much “there” there. Meanwhile, a public with a short attention span and a media looking for fresh news will find new stuff to talk about. Democrats who are looking for fundraising and grassroots support in the mid-term elections will be slow to criticize the President.
On top of that, scandal discussion sucks up a lot of oxygen that could be used on other issues. Higher taxes are shrinking paychecks, and Obamacare is making American health care more expensive and complex. The policy environment is ripe for Republican criticism, but the line that connects a big government that taxes too much and overreaches on programs with a big government that swipes reporters’ phone records and harasses its opponents is not starkly obvious to casual observers. And there’s always the chance for a Republican politician trying to overplay his or her party’s hand.
The last couple of weeks may have been tough to get through. There’s still plenty of time for the scandals to fade into the background and there will be opportunities for the President to go back on offense. If all this bad news was going to hit anyway, having it hit at once was the best possible outcome for the White House.
Sometimes a crummy week makes for a better year.
Jim Eltringham 