Well, you have to hand it to our American cousins. They can certainly do theatrics. The solving of the (self-inflicted) debt crisis has been a real nail-biter. At the tenth hour last night, there was a bi-partisan vote in the US House of Representatives, including the hugely poignant appearance of Rep. Gabrielle Giffords. All House members were on their feet as she returned to Congress for the first time since being shot while carrying out a constituency surgery (as we would call it).
It was pure Hollywood. But beneath the tear-jerking choreography let’s acknowledge that it is genuinely historic for the Democrats and Republicans to come together in sufficient numbers to pass something like this. Quite awesome actually. And Rep. Giffords is a true heroine for those of us who value democracy.
But I can’t help thinking that we will look back on this as a seminal moment. The moment when the USA started a decline in its super-power status, as the sun rose in the East (just over Beijing).
The whole thing is just a complete mess, as Obama called it. George W Bush caused most of the debt with his wars and tax cuts for the super-rich. That is, the George W Bush who would not be out of place at a Tea Party rally.
The whole crisis was totally unnecessary. And yet, 50-70 Tea Party members out of 535 congress representatives or Senators held the country to ransom, behaving, as Vice President Biden put it, “like terrorists”. Or, perhaps the USA is finally waking up to three party politics. The Tea Party Representatives, in practical terms, do not recognise their nominal leader, John Boehner.
One Tea Party cheer-leading press release, during the drama, congratulated the Tea Party hold-outs and added “the American People are watching you”. That phrase seemed to suggest an arrogant attitude. An attitude that disregards the views of the representatives of 87% of the people in America and only regards the representatives of 13% as legitimate. “Compromise” is a dirty word, synonomous with “caving in”. Indeed, in one interview John Boehner refused to use the word “compromise” despite it being put to him several times. He preferred the phrase “common ground”.
Meanwhile, Mitt Romney kept out of all this and then just came in at the end to enjoy the luxury of hindsight, condemning the final plan. What a rotter! But politically, he probably did the right thing and you’ve got to conclude, after all this, that dear old President Obama’s “jaiket is hanging on a shooglie nail”, as the Scots would say. His re-election is looking less and less likely.
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That’s “shooglie nail” at the end there, by the way.
Yes, if Obama doesn’t come up with some political judo to turn the past fortnight’s kamikaze kraziness into a way to push through some tax revenue hikes and such, his reputation will shift between “weak” and “closet conservative”, and ever larger numbers of Democrat voters will be asking, “what’s the point in supporting the guy?”
Thanks Jon for the spelling. Yes, you’re right.
I’m not so sure. Americans seem to be disgusted with the whole process, and it is pretty obvious that the Tea Party were the lead brinksmen. Remember that the American electoral college focuses all importance in a handful of voters in a way that even Tory and Labour conservatives in UK could only dream of, and it’s pretty sure who has done more to alienate independents in the past three weeks. Added to the fact that entryism in the Republican Party has a real chance of selecting as their candidate an absolute lunatic and they could still have a George McGovern situation on their hands.
US decline started with their neoconservative adventures in Iraq and Afghanistan.
This deal is a disaster according to Paul Krugman; http://www.nytimes.com/2011/08/01/opinion/the-president-surrenders-on-debt-ceiling.html?_r=1&src=ISMR_AP_LO_MST_FB%EF%BB%BF
Yeah, but Paul Krugman thinks that Gordon Brown was a paragon of economic competence, so is hardly a reliable witness.
“But I can’t help thinking that we will look back on this as a seminal moment. The moment when the USA started a decline in its super-power status, as the sun rose in the East (just over Beijing).”
I’m inclined to think the seminal moment was, just after being elected, GW Bush derided Clinton’s budget surplus, and wiped it out with a massive tax cut. I think historians will often wonder what would have happened to the USA if Bush hadn’t been elected, and the budget surplus had continued.
I don’t think it’s helpful to credit George W Bush as the author of all the problems in the US economy and I don’t think it’s helpful to condemn Tea Party supporters for their frustration that these problems are not being sorted out and there is no policy change.
National debt has been identified as a significant problem in the US for more than 40 years, yet it continues to increase only in proportion with the growth of inequality. Clinton may have been the single deviation from this trend, but inequality still rose under his tenure.
So raising the debt threshold does nothing but postpone the eventual reckoning, and although it’s possible to celebrate the extra breathing space we can expect the same suffocating farce to be repeated under each new presidency until the issue is grappled with effectively.
I strongly disagree with Tea party activists, but it’s foolhardy to ignore their rise to prominence as an expression of disgust at the two-party stitch-up and the accumulation of failures made under successive US governments.
Maybe the Democrats and Republicans will soon start offering some real answers to why only 50% of the population actually vote, as a way to understand the risks this present to their party system while ever more extreme voices start fill the spaces they won’t.
Unfortunately the circumstances make it patently clear nobody can ever hold their breath for that long.
Of course many of the Tea Party are bonkers but on the other hand 14trn is an awful lot of money to owe. Obama has been following a classic Keynsian borrow and spend policy with very little effect.
But his stimulus spending is dwarfed by the money lost by Bush’s tax cuts. Re-instating the taxes would be MUCH more productive towards eliminating America’s deficit.
The taxes would still be lower than over here.
The Republican Party has probably become more Tea-Party friendly now, but whether this will hold appeal beyond the primaries I don’t know.
Obama is in a world of problems. As far as I know, no country has cut their debts with tax cuts alone and that’s exactly what he has been bullied into. His only hope is that the Tea Party overplay their hand and start calling for the end of all welfare now and a complete freeze in immigration (things that some sections of their movement advocate). But I fear that Obama, in great part through no fault of his own, may end up being a one-term president.
It’s way too early to know what the political consequences of this are.
For what it’s worth, in my opinion, while this issue has hurt Obama, it creates much greater problems for whoever is seeking the Republican nomination. My guess is that, with the Tea Party emboldened, the Republican party will be deeply split between the Tea Party and the more moderate republicans. In that situation, I think the Republicans will find it very hard to take the White House.
I remember an interview with a former advisor to GW Bush, who said that the US budget deficit isn’t such a problem. All that was needed was a few cuts, and some minor tax increases. (Note, that’s a Republican suggesting tax increases) Unfortunately, the Tea Party are making it nearly impossible to get minor tax increases through, and, as a result, the deficit is much harder to deal with than it should be.
“The whole thing is just a complete mess, as Obama called it. George W Bush caused most of the debt with his wars and tax cuts for the super-rich. That is, the George W Bush who would not be out of place at a Tea Party rally.”
This paragraph contradicts itself. George W. Bush would be lynched at a Tea Party rally. He is the epitome of big-government conservativism, responsible for taking a budget surplus and turning it into a huge deficit. American libertarians are as critical of Bush as they are of Obama – sometimes more so.
“50-70 Tea Party members out of 535 congress representatives or Senators held the country to ransom, behaving, as Vice President Biden put it, “like terrorists”.”
Since when has elected politicians standing up for what they believe been a form of terrorism? That statement was a disgraceful piece of hyperbole by Biden. So much for the “Democratic” Party!
“The Tea Party Representatives, in practical terms, do not recognise their nominal leader, John Boehner.”
Party discipline in Congress has always been weaker than in Parliament, where MPs are whipped to obey party bosses. This is in part due to the integrated nature of our legislature and executive, which means most MPs hope for a government job one day. But it is also because Congress(wo)men build their own electoral machines and rely on the central party less than in the UK (Lib Dems possibly excepted).
And talking of Lib Dems, it’s a bit rich to talk about “An attitude that disregards the views of the representatives of 87% of the people … and only regards the representatives of 13% as legitimate”. We’ve been representing that sort of proportion for decades and I doubt many Lib Dems would accept the argument that they should not stand up for what they believe just because they represent a minority of the electorate.
So many strands to pick up on here.
Re the seminal moment when the USA started its decline … Not really a moment in my view but the gradual abandonment of the rule of law; it’s about stolen elections, an electoral system which means that money buys power, TBTF banks up to their necks in blatant fraud which the administration is doing its best to ignore and straightforward theft and embezzlement of billions from government agencies.
Nothing is honest, nothing is what it seems any more. Is it any wonder that voters are angry with the antics of Versailles on Potomac. And as for Obama, people are beginning to work out that although elected as a Democrat he is governing as a bankster agent. From Black Agenda Report:
The truth is that Barack Obama’s actions are entirely rational, understandable and even predictable if you suppose him to have been a vicious, vacuous and cynical right wing operative from the very beginning.
http://www.blackagendareport.com/obama-fake-debt-ceiling-crisis_smarter-than-you
Re Keynsian stimulus: there is nothing of classic Keynsian borrow and spend about Obama’s policies; what he is doing is bailing out a corrupt and failed Wall Street. Does anyone suppose that Keynes, were he alive today, have anything good to say about that? Remember that he argued that when capital investment is a by-product of speculation (exactly what we have now) it will be badly done. Still, there’s nothing like setting up a straw man – it’s so much easier to knock down.