Yep, we’re in trouble. And the issue at the moment is the debt ceiling, which must be raised or for the first time in our history the United States goes into default – we cannot pay what is due on what we’ve already borrowed and spent, and when we renege on those treasury bonds the world thought were so safe the markets panic and everyone scrambles to find a new safe place to park their money – probably in cash, causing a worldwide massive run on all the central banks, which don’t have that cash on hand, and will thus collapse. It’ll be the Dark Ages once again. Or as Andrew Sullivan suggests, only this happens:
We have a potential catastrophe of national default, an event whose consequences are unknowable but which could quite easily wreck the US and global economies, profoundly damage people’s savings, raise interest rates and destroy jobs for a very long time. In most countries, the goal of the entire political class is to avoid such a thing if at all possible. Greece is currently facing down riots in order to slash its deficit. Britain is entering a period of profound austerity. All of this pain is to prevent the worst possible crisis to hit a country: default. All responsible politicians understand this is something to be avoided at all costs. Conservatives especially see any weakening of the full faith and credit of sovereign governments or the EU as very destabilizing to growth and democratic stability.
But here we have one party that seeks the collapse of the global economy if they do not get their way on every single thing, cutting all government activity to the bone, and ending most every social program and any investment in new stuff and any maintenance work on the infrastructure, and promising to never raise taxes again, but to lower them so no one will ever pay much of anything. In short, except for defense we just shut things down – period. People should take care of themselves, not the government – if you want to go somewhere, well, buy the land, hire someone to build the road, or just stay home. People whine too much. And to start off, let’s make sure we cannot borrow money to do things – let’s stiff those folks we’ve borrowed money from too.
And they want to be admired for all this, which seems to be driving Sullivan crazy:
The point of economic blackmail is that it works. If you have a scintilla of public responsibility and you hold public office, you cannot allow default. And so you give them everything they want. You announce this while declaring you abhor the package but have to back it for the sake of the national interest in preventing catastrophe. You detail and expose the Republican priorities far more aggressively than in the past. You blame the performance of the economy entirely on them from now on out. And you run on a platform of shared sacrifice- of revenue-enhancing tax reform and tax hikes for millionaires. Then you run against the Republicans as hard as you can.
Yes, there are ways around this – you can invoke the Fourteen Amendment and order the Treasury to keep paying its debts – that is what the amendment seems to say you can do. Sullivan notes that Bruce Bartlett outlines the mechanism here and offers other ideas here – for what that’s worth. And Sullivan adds this:
What you probably cannot do is negotiate with economic equivalent of terrorists. What Cantor and Boehner are doing is essentially letting the world know they have an economic WMD in their possession. And it will go off if you do not give them everything they want, with no negotiation possible. That’s the nature of today’s GOP. It needs to be destroyed before it can recover.
Those are strong words, but who listens to him? In fact, who listens to whom?
And that is an interesting question. When the markets crash and central banks around the world collapse – being set up now so Obama cannot win a second term – people will look back and say gee, we should have listened to this person we mocked, or to that person who we said was not thinking clearly, or to Paul Krugman.
Or maybe not – and the model for that was the Iraq War. Yes, you were going to look foolish when our guys discovered those massive stocks of chemical and biological weapons, and those nuclear bombs – all those weapons of mass destruction. You’d see Bush had been absolutely right. But when there were no such things no one admitted they, not the skeptics, had been the foolish ones. No, somehow they were still right – if you really, really thought about it. And the damned hippies on the left were still wrong, even if they had been right, because they’re always wrong. Legions of political writers have spent years explaining this, and that’s a good gig.
But this isn’t complicated. You see, some people are just permanently SERIOUS PEOPLE – folks like Thomas Freidman and Karl Rove and maybe Tom Hanks and Doctor Phil – and others are not – like Michael Moore and Hans Blix, and Dominique Marie François René Galouzeau de Villepin and every Frenchman who ever lived. And this seems to have nothing to do with being right. So on the debt ceiling, the Republicans, saying give us exactly what we want or we’ll all die, right here and right now, may be no more than terrorists. And they may be wrong about how deadly serious this is. You don’t play with this kind of fire. But they are branded as the serious people here – or have been so far.
This is a mystery. And an interesting example of this just appeared in the Wall Street Journal – which everyone knows is a Serious Newspaper, even though Rupert Murdoch bought it a few years ago and is working on slowly morphing it into some sort of Hannity meets O’Reilly meets Glenn Beck sort of broadsheet. And now it’s David Wessel with what the United States could do to jump start the economy:
The U.S. economy resembles a patient who survived a heart attack, and tells his doctor: “I took your advice and swallowed the pills, and I still don’t feel well.”
We were warned that the post-recession recovery, now marking its second anniversary, would be painfully slow. It’s worse than predicted. And it’s hardly reassuring for Federal Reserve Chairman Ben Bernanke to concede: “We don’t have a precise read on why this slower pace of growth is persisting.”
Although U.S. unemployment is at 9.1% and forecast to remain above 8% through next year, the Fed says it won’t do more to help the economy. The adrenalin of fiscal stimulus is wearing off. And Washington is fixated on deficits and debt ceilings. Is there really nothing to be done to help the economy heal?
Will this be one more screed on how Obama had done everything wrong, and he should have shut down the government and ended all taxes and just watched the now totally free economy boom.
One set of physicians, the Keynesians, are sure their medicine worked, but the dosage was insufficient. They prescribe more stimulus, perhaps renewing the payroll-tax holiday that is to expire at year end. Another set, influential among Republicans, is just as sure the medicine didn’t work. They prescribe the opposite: Starve the fever – cut spending significantly and soon. A third set, influenced by professors Kenneth Rogoff and Carmen Reinhart’s history of financial crises, says deleveraging is like detox: Painful, takes time and can’t be rushed.
Okay, fine, but then Wessel starts sounding like a damned hippie:
To be clear: Like a middle-aged man who needs to exercise, quit smoking and eat fewer French fries, the U.S. government needs to enact now a credible, long-term plan to reduce future budget deficits. Period. But that doesn’t mean deficit reduction alone will unleash a surge of growth and hiring. Remember: The worse the economy, the bigger the deficit. One-percentage-point slower economic growth in 2011 (even if the economy rebounds in 2012) adds nearly $100 billion to the 10-year deficit estimate.
So then he starts calling for growth using direct government action and some spending, as with housing:
It’s time for a rethink, in light of the persistently sour housing market. Perhaps state-owned enterprises Fannie Mae (FNMA) and Freddie Mae (FMCC) should be deployed to refinance credit-worthy underwater borrowers. Perhaps the federal government should buy foreclosed homes from banks and give them to local governments to fix up and rent.
And then there is the unemployment mess:
Tax breaks to give consumers spending money is one approach, but maybe it’s time for another: Nudge employers to hire with a tax credit for every worker they add or every extra dollar they spend on payrolls. Yes, it will reward some employers who would have hired otherwise. But 4.4 million Americans have been unemployed for more than a year, their prospects for ever going back to work diminishing. Watchful waiting is costly and cruel.
And here he also sounds like a damned hippie:
Declaring a tax holiday for repatriating foreign earnings will boost spirits, but isn’t likely to add many jobs or much investment, based on academic scrutiny of the 2004 tax holiday. One fact: Of the nearly $1 trillion in cash on S&P 500 companies’ books, about 60% is already in the U.S., according to S&P and a new survey by the Association for Financial Professionals. Big business isn’t short of cash.
And there is this:
How about a quick round of government-funded infrastructure maintenance, putting some unemployed to work today on chores we’ll have to do someday anyhow?
This is a very odd item for a Murdoch newspaper to run, and Duncan Black gives his Shorter David Wessel:
“The hippies are like so totally wrong about everything, but here’s my plan in the WSJ to implement the hippie agenda.”
That’s a bit of an unfair characterization, but I wish pundits could just say “here’s what should be done” without pretending to float above everyone else who is wrong.
I’d summarize Wessel’s column a bit differently: it’s roughly “Some people thought from the beginning that the stimulus should have been much bigger. Hahaha! Also, it turns out that the stimulus was too small, so we need some more.”
But he is not surprised:
This is actually a fairly familiar thing from my years as a pundit: the surest way to get branded as not Serious is to figure things out too soon. To be considered credible on politics you have to have considered Bush a great leader, and not realized until Katrina that he was a disaster; to be considered credible on national security you have to have supported the Iraq War, and not realized until 2005 that it was a terrible mistake; to be credible on economics you have to have regarded Greenspan as a great mind, and not become disillusioned until 2007 or maybe 2008.
And Digby agrees:
He’s right, of course. And it goes back a long way. I don’t know how long, but I do recall that leftists who joined the Spanish civil war against the fascists were excoriated at the time and later dubbed “premature anti-fascists.”
Being right too early is never fully forgiven, I’m afraid. Perhaps the next question is why this is always aimed at the left?
But the answer is obvious. They just aren’t serious people – never have been, never will be. These folks are always right too soon. That really irritates people. Don’t do it. Go with the flow.
Consider Alex Pareene examining the case of Mark Halperin – who “is pretty sure Sarah Palin and Donald Trump are 2012 front-runners” and thought “suspending his campaign” to fix the economy, and not knowing how many houses he has, “were both huge messaging victories for John McCain” – and this:
He wrote a book about how to win in 2008 that predicted everything Hillary did, but in his world it all worked. He thought Bush’s political comeback would come any day now throughout the entirety of the years 2006-2008. He can’t interpret polls or see through the spin of GOP consultants who are much smarter than he.
And MSNBC just pretty much fired him on Thursday for calling Obama “a dick” on air – not for always getting everything wrong. Halperin was trying to say Obama was just not a serious person, because he got vaguely nasty about the Republicans dicking around on the debt limit thing. Still he will be back. He’s wrong at the right times – early on, when everyone else is wrong too. Folks forgive that. His career is secure. He is still one of the Serious People.
So the trick is somehow, by being wrong or nutty, to enter the ranks of the Serious People. And there is no better example of someone in the process of doing just that than Michele Bachmann. And Christopher Hitchens discusses that in this item on that woman – a discussion of her adventures in Iowa.
Yes, she was bragging to Fox News about “her small-town Iowa roots” – she said wonderful things about Dairy Queen and Wonder Bread and “the sturdy small town of her girlhood” and he went on to claim that “John Wayne was from Waterloo, Iowa.” And of course she added this – “That’s the kind of spirit that I have, too.”
And Hitchens takes off:
John Wayne was from Winterset, Iowa, which can be found about 150 miles to the southwest of Waterloo. It was his namesake John Wayne Gacy, serial rapist and killer of 33 teenage boys and young men, who spent time in Waterloo. (I long ago pointed out that having “John Wayne” in your lineup of given names is a bad predictor: John Wayne Bobbitt was reduced by an infuriated partner to hunting in the weeds for his abruptly severed penis.)
Traditionally, the phrase “to meet your Waterloo” means to encounter a final and unarguable defeat. Perhaps it’s too early to say that, but really. In one stroke, Bachmann shows that she can’t tell one folksy Iowa town from another.
Then she compounds the error by confusing a folk hero with a villain and psycho. Finally, and having never done or said anything that would stand a second’s comparison to the spirit of The Duke (whatever you may think of him), she tries to borrow the mantle of a husky gunfighter in the very week that she is pathetically advocating that we leave Col. Qaddafi alone.
He is not amused and wonders about this attempt to be taken seriously:
Where does it come from, this silly and feigned idea that it’s good to be able to claim a small-town background? It was once said that rural America moved to the cities as fast as it could, and then from urban to suburban as fast as it could after that. Every census for decades has confirmed this trend. Overall demographic impulses to one side, there is nothing about a bucolic upbringing that breeds the skills necessary to govern a complex society in an age of globalization and violent unease. We need candidates who know about laboratories, drones, trade cycles, and polychrome conurbations both here and overseas. Yet the media make us complicit in the myth – all politics is yokel? – that the fast-vanishing small-town life is the key to ancient virtues. Wasilla, Alaska, is only the most vivid recent demonstration of the severe limitations of this worldview. But still it goes on.
Yep, Bill Clinton played on his being born in tiny Hope, Arkansas, even if he grew up in Hot Springs, and Hitchens offers this:
I once thought of writing a speech for Al Gore, who was largely raised in a luxury hotel in Washington, then named the Fairfax and owned by his aunt. “When we were hungry – and we knew hunger – we would call room service. When we were tired, and our clothes were dirty, we dropped them on the floor …”
I thought this would position him nicely as a man on whom Washington had already exerted all its seductions, a candidate who knew the capital as a president must. But, no, he insisted on stressing his short time spent in Tennessee looking at a plough over the wrong end of a horse. Whom did he think he was fooling? It was like the Bushes pretending to be Texan pioneers and wildcatters when they were Connecticut Yankees.
And he finds all this dispiriting, as he goes on to discuss foreign policy and the new calls for making cuts in foreign aid and getting the hell out of this place and that, as it’s now filtered through this small town stuff, “the easy appeal that derives from the image of lazy and ungrateful foreigners feasting on our largess. It is as if we had no stake – to put it no more nobly – in the welfare of other peoples and societies.”
But she is just trying to be considered one of the Serious People. And it seems that has nothing to do with being right about the matter at hand, and at the moment it really matters. Out here the serious people voted for Arnold Schwarzenegger for governor. Now they say they knew all along that would never work out. They’re still serious people.
But you do have to wonder about a nation where you’re only considered a serious player if you’re been consistently wrong, along with everyone else, and stunningly right only when it’s far too late. And of course when we default on our debt, and the markets crash and chaos and pain follow, serious people will say all along that they knew we should have raised the debt ceiling. Weren’t you listening?