congress shutdown and batteries

The news this week has been dominated by the government shutdown, the pending credit default crisis and, most recently, by optimistic reports of negotiations between the White House and House Republican leadership.  This optimism stems from a possible agreement on a continuing resolution and a small increase in the federal government’s borrowing limit that will allow federal employees to return to work and forestall a default on government debt.

I regret to say that I do not share the optimism.  While reopening the government would be positive and avoiding a credit default critical, the fact that these things pass for a resolution of the crisis in some circles concerns me deeply.  I am not sure that those in Washington fully understand how the current crisis is playing out among those doing business in the U.S. economy.  I would offer NAATBatt’s experience as one small example.

The National Alliance for Advanced Technology Batteries (NAATBatt) is a trade association whose mission is to support the commercial interests of our members by promoting advances in science and markets for advanced electrochemical energy storage technology.  We are primarily a networking organization, helping our members identify opportunities, technologies and alliances that will make their businesses more successful.

In the short term, the government shutdown has had little impact on NAATBatt.  NAATBatt is not funded by the federal government.  None of our revenues or programs have been lost or delayed.  Some conferences in which our members have participated over the past 10 days have been impacted by the inability of government employees to participate.  We also have great sympathy for employees of government agencies with whom we regularly deal, who are likely suffering some personal, though hopefully temporary, financial hardships because of the shutdown.  But all these issues will be resolved by a successful outcome of the negotiations now being so optimistically reported.

What will not be resolved is the longer-term impact that this crisis will have on NAATBatt’s future activities.  We are in the early stages of planning a Pan-Pacific Advanced Battery Summit, which will bring together senior executives of leading battery firms and their supply chain partners.  The idea of the Summit is driven by the desire of NAATBatt member firms to have better access to the growing Chinese battery market and for Chinese companies to have better opportunities in North America. Ordinarily, we would plan to hold the Summit at an attractive venue in the United States.  As a U.S.-based organization, this would be the easiest and preferred option.

But the prospect of future government shutdowns occasioned by one political disagreement or another must now figure into our planning.  In the best of times getting travel visas for Chinese businessmen to enter the United States has been a little unpredictable. Compounding that unpredictability by the prospect of occasional government shutdowns and their attendant halts to and backlogging of visa processing is simply more risk than NAATBatt can afford to bear.   With great regret we must at this point plan to hold the Summit somewhere outside of the United States next year.

The $16 trillion U.S. economy will little notice the few hundred thousand dollars it will lose by NAATBatt holding the Pan-Pacific Advanced Battery Summit overseas.  But multiply NAATBatt’s predicament by the tens of thousands of other U.S. businesses that must be making similar calculations and the staggering long-term cost of the shutdown becomes readily apparent.

For the last fifty years, the great strength of the U.S. economy, and its great advantage over other nations, particularly developing nations, hasbeen its political stability.  That we have arrived at a point where business people must account for political instability in the United States in their planning is a big deal.  I fear that our political leaders in Washington just don’t get that.

Reopening the government and paying back salaries to furloughed government employees may seem like a solution to some.  But it does not address the more fundamental issue that threatens to become a major problem for the U.S. economy:  the perception of real and consequential political instability.

The only effective solution is a political consensus, vocally and credibly voiced across the political spectrum, that a federal government shutdown and threatened credit default will never again be allowed to occur.  Political differences can and should remain, and can and should be passionately debated and acted upon through the legislative process.  But no matter what the political disagreement, shutting down the government must be placed permanently and irrevocably off the table.

Photo Credit: Government Shutdown and the Economy/shutterstock