Obscured by Amy Winehouse's "unexplained" death (the whistle-blower in the Murdock case who died last week, his death was also "unexplained"), by the further death of scores in Norway at the hand of a right-wing nutcase The Onion couldn't have dreamed up, and by, on a positive note, persons of the same sex being allowed at long last to marry in the State of New York, is another eleventh hour stand off in Washington, this time over raising the debt ceiling, something that, contrary to the noise and fuss about its being historic in nature, has been done an average of nearly once a year since the Federal Reserve was created, ostensibly to preserve the value of our currency, near the start of World War I.
Like the bailout of the banks, and the auto industry, and all the "quantitative easing" that has come down the pipe (and will continue to come down the pipe, in various costuming), this deal will get done because people with money and power will insist on it. We will not default on our debt and risk the wrath of bond-holders worldwide. Moreover, we cannot afford even slightly higher interest rates given our indebtedness (as we could the last time we were into this situation, when the Vietnam War and The Great Society got to be too much for the nation's pocketbook, back in 1980 or thereabouts); we will not risk having our debt downgraded by the ratings agencies that did such a fine job, btw, of separating the wheat from the chafe ahead of our last crisis, but never mind.
So, while our debt is a looming disaster waiting to happen, it isn't, blessedly, as looming as Europe's, or Japan's—ours, as the giant bond fund PIMCO says, is the least dirty shirt of the bunch.
We're screwed, but others, friends of ours, are screwed worse! Thankfully!
And from the point of view of any politician paying attention, there's yet a decent chance we'll get our screwing in a way where most of us won't even realize we got it, much less cast blame on who did it, and how brazenly. It'll be as though someone slipped us a mickey in a bar, and then screwed us. We won't remember a thing.
The politicians, correctly, I would say, are assuming the bit by bit screwing of, notably, savers, people on fixed income, hobbled in one way or another, possibly from serving their country in a war that didn't pan out so well in terms of booty, is preferable to draconian austerity, to bankers holding lousy debt having to actually lose money on it, to the stock and bond markets crumbling, to unemployment rates going higher still, to rioting in the streets—and I wouldn't necessarily disagree.
In any case, this is not a problem that is going to be "solved" anytime soon. We've gone way too long (at least thirty years too long) as a country, as a people at a particular time in history, doing things that history is likely to judge pretty harshly, and now, bit by bit, we're reaping the consequences, and it isn't pretty (except here in Louisville; everything is pretty in Louisville; if you want to see how a tiny part of the whole bucks the trend, come to Louisville, and bring your wallet).
Anyway, here's what I think is going to happen: Obama, through his Chief of Staff on "Meet the Press" today, says he'll veto anything that doesn't put this debt-ceiling matter to bed until 2013 (read: after the election, which, given his competition, and absent a game-changing calamity of a pretty extreme kind, he is going to win, hands down—and if you don't agree, let's put a hundred bucks on it), but, the Republicans, powerful in the way of a willful child who knows his parents will spare the rod when push comes to shove, are not going to agree to anything of the sort. They will want to keep as much crisis in the moment, or at least not far in the distance, as possible, since it is their only hope, and a slim one at that, of gaining power in 2012. They are betting that Obama, when they start with their sassing, won't grab them by the ear and haul them off to the woodshed, where, in the days of LBJ, there would be much screaming and gnashing of teeth—and they'll probably be right. And we'll get some short-term, little kick of the can deal. In spite of Obama getting in Cantor's face a few days ago, we'll get stop-gap, or something like it. And the people holding Treasuries, thinking of holding Treasuries, rating Treasuries, will wonder ... and gold will go up ... stuff like that.
To be fair, both parties know that a $4 Trillion dollar "Grand" deal isn't going to solve the problem anyway, not even close. The only people who believe that don't understand the problem, and in that scenario, a grand deal scenario, Obama wins, for shepherding a grand deal, like a good leader should, and that's no good for Republicans, who are more concerned with ideology at this stage of their history than with where their bread is actually buttered (read: not by their "base" but by the wealthy, who are tiring of these shenanigans, who can deal with a little more taxation (they're rich!), entitlements they, personally, don't need, but their customers do, will, and lots of them, soon ... whatever, so long as they know what it is and their financial people can adjust accordingly, they're good).
Obama, in short, despite his ire over the intractable opposition, will give in first. It's what a loving father does. And the child knows it.
To further understand the dynamic—given Ms. Winehouse's passing this weekend, we may as well have a tie in here—imagine the country were our daughter with, say, considerable gifts and talent, but a bad drug and alcohol problem. The Tea-Bagger wing of the Republican Party would strap her to a metal bed in the basement and have one of the better behaved, more pliable children read the Bible to her until she howled and screamed and finally straightened out—just like Ms. Winehouse might have had someone had the courage to do the right thing with her. They would lock up all the booze and drugs in the house (after they were done using them) and if the daughter wouldn't see the light she'd stay in the basement, tied up, and they wouldn't talk to her, and the well-behaved, pliable child would keep reading the Bible to her and the door would stay closed and the music turned up while she did. Clockwork Orange, Baby! Straighten up, or we just might shoot you, or read Leviticus forever.
And I say/we say, No no no!!!
Liberals would argue that the daughter needs a better job, or maybe just a job, any job, to better be able to fund her habits so that she wouldn't always have to be coming to Mommy and Daddy for help. They would try to talk to her, help her, even as she spit in their face.
Those kinds of parents, people, leaders, are always in a weak position, always getting taken advantage of. They often don't live long—at least that's what I've heard. Their consolation is that at least they're trying, and they're not crazy, at least not in a brutal way ... like the people who tie their children to metal beds and beat them like LBJ used to slap around the opposition, but he was a, well, something you don't see anymore, so ...
Stay tuned!
