“The Boehner Bunglers”: The Truly Incompetent Can’t Even Recognize Their Own Incompetence
The federal government is shut down, we’re about to hit the debt ceiling (with disastrous economic consequences), and no resolution is in sight. How did this happen?
The main answer, which only the most pathologically “balanced” reporting can deny, is the radicalization of the Republican Party. As Thomas Mann and Norman Ornstein put it last year in their book, “It’s Even Worse Than It Looks,” the G.O.P. has become “an insurgent outlier — ideologically extreme; contemptuous of the inherited social and economic policy regime; scornful of compromise; unpersuaded by conventional understanding of facts, evidence and science; and dismissive of the legitimacy of its political opposition.”
But there’s one more important piece of the story. Conservative leaders are indeed ideologically extreme, but they’re also deeply incompetent. So much so, in fact, that the Dunning-Kruger effect — the truly incompetent can’t even recognize their own incompetence — reigns supreme.
To see what I’m talking about, consider the report in Sunday’s Times about the origins of the current crisis. Early this year, it turns out, some of the usual suspects — the Koch brothers, the political arm of the Heritage Foundation and others — plotted strategy in the wake of Republican electoral defeat. Did they talk about rethinking ideas that voters had soundly rejected? No, they talked extortion, insisting that the threat of a shutdown would induce President Obama to abandon health reform.
This was crazy talk. After all, health reform is Mr. Obama’s signature domestic achievement. You’d have to be completely clueless to believe that he could be bullied into giving up his entire legacy by a defeated, unpopular G.O.P. — as opposed to responding, as he has, by making resistance to blackmail an issue of principle. But the possibility that their strategy might backfire doesn’t seem to have occurred to the would-be extortionists.
Even more remarkable, in its way, was the response of House Republican leaders, who didn’t tell the activists they were being foolish. All they did was urge that the extortion attempt be made over the debt ceiling rather than a government shutdown. And as recently as last week Eric Cantor, the majority leader, was in effect assuring his colleagues that the president will, in fact, give in to blackmail. As far as anyone can tell, Republican leaders are just beginning to suspect that Mr. Obama really means what he has been saying all along.
Many people seem perplexed by the transformation of the G.O.P. into the political equivalent of the Keystone Kops — the Boehner Bunglers? Republican elders, many of whom have been in denial about their party’s radicalization, seem especially startled. But all of this was predictable.
It has been obvious for years that the modern Republican Party is no longer capable of thinking seriously about policy. Whether the issue is climate change or inflation, party members believe what they want to believe, and any contrary evidence is dismissed as a hoax, the product of vast liberal conspiracies.
For a while the party was able to compartmentalize, to remain savvy and realistic about politics even as it rejected objectivity everywhere else. But this wasn’t sustainable. Sooner or later, the party’s attitude toward policy — we listen only to people who tell us what we want to hear, and attack the bearers of uncomfortable news — was bound to infect political strategy, too.
Remember what happened in the 2012 election — not the fact that Mitt Romney lost, but the fact that all the political experts around him apparently had no inkling that he was likely to lose. Polls overwhelmingly pointed to an Obama victory, but Republican analysts denounced the polls as “skewed” and attacked the media outlets reporting those polls for their alleged liberal bias. These days Karl Rove is pleading with House Republicans to be reasonable and accept the results of the 2012 election. But on election night he tried to bully Fox News into retracting its correct call of Ohio — and hence, in effect, the election — for Mr. Obama.
Unfortunately for all of us, even the shock of electoral defeat wasn’t enough to burst the G.O.P. bubble; it’s still a party dominated by wishful thinking, and all but impervious to inconvenient facts. And now that party’s leaders have bungled themselves into a corner.
Everybody not inside the bubble realizes that Mr. Obama can’t and won’t negotiate under the threat that the House will blow up the economy if he doesn’t — any concession at all would legitimize extortion as a routine part of politics. Yet Republican leaders are just beginning to get a clue, and so far clearly have no idea how to back down. Meanwhile, the government is shut, and a debt crisis looms. Incompetence can be a terrible thing.
By: Paul Krugman, Op-Ed Columnist, The New York Times, October 6, 2013
“The Debt Ceiling Matters”: House Republicans Are Threatening To Unambiguously Violate The Constitution
The word we keep hearing is “catastrophe.”
“A U.S. Default Seen as Catastrophe, Dwarfing Lehman’s Fall,” screams the headline in Bloomberg Businessweek. “A default would be unprecedented and has the potential to be catastrophic,” says a Treasury Department report issued on Thursday — two weeks before the government is expected to begin running out of cash.
But what does “catastrophic” actually mean in this context? In the summer of 2011, when Republicans refused to raise the debt ceiling unless President Obama caved to their extortionist demands, the same word was bandied about. It scared the political class enough that they kicked the can and avoided a default.
This time around, the need to raise the debt ceiling doesn’t seem to be generating nearly the same concern. Indeed, Tea Party Republicans seem to be almost rooting for the government to default, as if that would somehow bring about the smaller government they so yearn for.
But this is incredibly wrongheaded. A failure to raise the debt ceiling, should it come to that, would likely inflict a different kind of pain than sequestration or even a shutdown of the federal government. It won’t make the government smaller. But it does have the potential to diminish the value of one of America’s greatest assets — the backing of its debt — while throwing the world economy into chaos.
The first point worth making is that the 14th Amendment to the Constitution, which declares that “the validity of the public debt of the United States . . . shall not be questioned,” was added precisely to avoid what is happening now: a faction of Congress using the debt ceiling as a bargaining chip. That basic truth, as Fortune’s Roger Parloff noted in a recent blog post, “ought to weigh very heavily in the minds — and on the consciences — of the House Republican faction that is now unambiguously violating its letter and spirit.”
The second point worth making is that U.S. government debt is the only risk-free asset in the world. That debt undergirds the entire world financial system — precisely because the whole world has such faith in it. There is always demand for U.S. government debt. Almost every other asset you can think of is in some way measured against it. A default would destabilize the market for Treasuries. And that, in turn, would likely destabilize every other asset.
The stock market would fall. Interest rates would rise — meaning, for instance, mortgages would become more expensive just as the housing market is starting to revive. Treasuries themselves would likely have to pay higher interest to investors, which would create a rather sad irony: a default would exacerbate the country’s long-term debt (the very problem the Republicans claim to care about).
Let’s move to the havoc a destabilized Treasury debt would have on the banking system. “The plumbing of the global financial system depends on Treasuries,” says Karen Petrou, a banking expert at Federal Financial Analytics. Remember what happened to Lehman Brothers? As the market lost faith in the company’s ability to meet its obligations, Lehman lost access to the “repo” market, which is the way banks are funded on a short-term basis. Treasuries make up a great deal of the collateral in the repo market. If a default were to cause the repo market to freeze, the entire banking system would find itself in crisis. Meanwhile — more shades of Lehman Brothers — the ratings agencies would likely downgrade Treasuries, forcing money market funds to start dumping government debt.
Painful choices would have to be made. Right now, the Treasury Department says it does not have the authority to pick and choose which creditors to pay. But, in the event of a default, it is hard to imagine that the government wouldn’t make some tough decisions about who should get paid in the short term — and who would have to wait. And, though this would infuriate millions of Americans, bondholders in China would likely get their money ahead of, say, Social Security recipients.
“From a purely cost-benefit analysis,” says Mark Zandi of Moody’s Analytics, “not paying bondholders would wind up costing the U.S. much more than not paying Social Security recipients” — because if bondholders lost faith in Treasuries, it would cost the government billions more in interest payments each year.
During the 2011 debt-ceiling crisis, consumer confidence dropped by 22 percent. When consumer confidence falls, people are less willing to spend and businesses are less willing to hire. That’s how recessions — or depressions — begin, and that may be the most important consequence of all.
For as long as anyone can remember, the ability of the United States government to pay its bills on time has given the rest of world tremendous confidence. At the same time, to have the one asset everyone in the world trusts has given America great advantages.
Why on earth would we ever risk that? Why?
By: Joe Nocera, Op-Ed Columnist, The New York Times, October 8, 2013
“Woefully Ignorant”: Congressional Republican Lawmakers Who Struggle With Basic Concepts
Rep. Ted Yoho (R-Fla.) knows exactly how he plans to deal with the debt ceiling and the full faith and credit of the United States.
“I think we need to have that moment where we realize [we’re] going broke,” Yoho said. If the debt ceiling isn’t raised, that will sure as heck be a moment. “I think, personally, it would bring stability to the world markets,” since they would be assured that the United States had moved decisively to curb its debt.
Now, Ted Yoho isn’t some random guy who called into a talk-radio show, or some troll in online comments thread. He’s a member of Congress. This elected federal lawmaker believes world markets would be more stable if the United States chose default on purpose.
While every day brings new evidence of policymakers saying foolish things about important issues, I feel like there are more examples than usual crossing the radar right now.
* Rep. Darrell Issa (R-Calif.) wants to replace “Obamacare” with a federal benefits program that’s eerily similar to the Affordable Care Act.
* Rep. Jack Kingston (R-Ga.) demanded to know why a reporter with health care insurance didn’t enter an exchange marketplace designed for people with no health care insurance.
* Sen. Tom Coburn (R-Okla.) argued this morning that there’s “no such thing as a debt ceiling in this country,” and we won’t “default” on our debt by failing to raise the debt limit.
* Rep. Mike Pompeo (R-Kan.) is convinced the government shutdown is about entitlement spending.
The list goes on (and on), but the larger point is, the country is in a difficult spot right now. The government is shut down, a debt-ceiling crisis is underway, and there’s no clear way out of the ongoing, self-imposed fiascos. The nation would benefit from sensible, knowledgeable policymakers showing sound judgment.
Instead we have these guys.
By: Steve Benen, The Maddow Blog, October 7, 2013
“Disarming A Weapon Of Economic Destruction”: The Debt-Ceiling Crisis To End All Debt-Ceiling Crises
The most important fact about the shutdown crisis, which is soon to become the shutdown/debt-ceiling crisis, is that Democrats are not making any demands. The only thing they want is for the government to reopen and for the United States not to default. Since these are things Republicans also claim they want, they can’t be considered demands. Republicans, on the other hand, have lots of demands, even if they keep changing. That’s why the current Republican talking point—”Why won’t the Democrats negotiate?”—is fundamentally misleading. One way for this whole thing to end is for Republicans to give up their demands and admit they’ve lost. Unsurprisingly, they’re reluctant to do this. But what if Democrats started making a demand of their own?
Today, White House press secretary Jay Carney said something encouraging: that Barack Obama is never again going to negotiate over the debt ceiling. “Whether it’s today, or a number of weeks from now, or a number of months from now, or a number of years from now, it will always be Congress’s responsibility to raise our debt ceiling so that the United States can pay the bills that Congress has incurred,” Carney said. “It will always be, as long as he’s president, President Obama’s position that that responsibility is not negotiable. That there’s not a game of trading for political priorities or agenda items that Republicans have not been able to achieve through legislation or the ballot box.”
That’s a good start, but how about this. As part of the resolution to the crisis, Obama should demand that whatever agreement they come to include eliminating the debt ceiling. Not raise it, blast it to oblivion. The fact that we have a debt ceiling at all is ridiculous. It essentially requires Congress to approve every budget twice, once to spend the money, and once to pay the bills for the money they just spent. There’s only one other democracy in the world (Denmark) that has such a thing, and they set theirs high enough that it never matters. In the days before the Republican Party descended into madness, the debt ceiling was nothing more than an occasion for some harmless grandstanding by the opposition party, but now it has become a weapon of economic destruction that needs to be disarmed. So get rid of it. If Republicans don’t want the country to take on debt, they can try to put together a balanced budget and see if it can pass. But this insanity has to stop, and the way to do it is to take away the minority party’s ability to initiate what Bloomberg News calls “an economic calamity like none the world has ever seen.”
That’s what Obama ought to demand.
By: Paul Waldman, Contributing Editor, The American Prospect, October 7, 2013
“Confidence Masking Ignorance”: Rand Paul Has A Debt-Ceiling Plan
By now, you’ve probably seen the amazing bit Jimmy Kimmel aired this week, in which he sent out a correspondent to ask folks which they like better: the Affordable Care Act or Obamacare. All kinds of people offered spirited opinions on the matter, arguing on behalf of one policy or the other, completely unaware that the two measures are exactly the same thing.
It was funny to watch folks express opinions on a subject they know so little about, though it was also easy to feel kind of bad for people who were made to look foolish on national television. After all, these were just regular Americans, not public officials whose job it is to understand the nuances and details of public policy.
When they say strange things on national television, it’s harder to feel charitable.
Sen. Rand Paul (R-Ky.) argued Wednesday that there’s no need to raise the debt ceiling because the U.S. can pay the interest on its debt with existing revenue.
“What’s going on is, interestingly, the Democrats are scaring people saying we might not pay [interest on the debt] because Republicans don’t want to raise the debt ceiling,” Paul said on CNN. “If you don’t raise the debt ceiling that means you won’t have a balanced budget, it doesn’t mean you wouldn’t pay your bills.”
Paul argued that the House has passed a bill, the Full Faith and Credit law, that mandates payments on debt interest, Social Security, Medicare and soldier’s salaries go out first. He said that if the debt ceiling is breached, other government function wouldn’t get financed, but that no default would occur.
This is, for lack of a better word, bonkers. Ezra talked with Rachel about this last night, explaining, “The way to think about Rand Paul’s plan is, imagine I said to you that unless you give me what I want, I’m going to burn down the studio. You said to me, ‘That sounds like a very bad idea if you burn the studio, nobody will have a studio.’ And I said, ‘No, no, I’ve got a plan. While it’s burning down, I will run in and grab all the things of value amidst the chaos, so that will all be fine.’ That’s basically the theory that he’s come up with here.”
The United States has a series of obligations and debts. For Paul, default is apparently an impossibility — the government will continue to collect a certain amount of revenue, which we can use to pay creditors. Once they’re paid, we can see if there’s money left for Social Security recipients and the military. If we still have a few bucks lying around, we can ignore some obligations and pay the others. Problem solved!
The world would abandon its confidence in the United States, many legal obligations would have to be ignored, and our full faith and credit would become a global punch-line, but isn’t Paul’s wacky idea easier than simply authorizing the Treasury to simply pay for the stuff we already bought?
Why would Rand Paul — a U.S. senator, mind you — say all this stuff out loud and on purpose? Because he thinks he’s saying things that entirely sensible.
This comes up all the time with the junior senator from Kentucky. In August, Paul spoke about the philosophic nature of “rights,” though his opinions on the subject were largely gibberish. The senator says he cares deeply about minority rights, which he struggles to grasp. Paul talks about drone policy, which he flubs badly. He’s expressed a great interest in the Federal Reserve, which he doesn’t understand in the slightest. Paul claims to hate Obamacare, but he fails to appreciate what the policy is and what it does. He says he’s deeply concerned about the deficit, but doesn’t know what the deficit is.
Obviously, no one is an expert in everything, but the key here is that Rand Paul, like the folks in the Jimmy Kimmel video, have strong opinions about subjects he claims to care deeply about, but about which he seems hopelessly confused.
The senator speaks with great confidence about these issues, as if he’s given them a great deal of thought, but the confidence masks a degree of ignorance that Paul seems blissfully unaware of.
By: Steve Benen, The Maddow Blog, October 4, 2013
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