Debt ceiling dance

Greg Sargent’s doing yeoman work on this stuff:

noted earlier today that when it comes down to it, the White House should act as if the debt ceiling is not Obama’s problem, but Congress’ problem. If Congressional Republicans don’t want to raise the debt ceiling, it’s on them.

Walter Dellinger, the former solicitor general under Bill Clinton, emails me his take on why this is true on the substance, never mind the politics. It’s a good one:

I understand why the debt ceiling is a problem. What I don’t understand it why it’s Obama’s problem. The debts that will come due are the debts of the United States, not the debts of Obama family and not even the debts of the executive branch…

If the U.S. defaults on loan obligations because of failure to increase the debt ceiling, every single American would be made somewhat poorer by the dead weight loss to the American economy that this would cause. I don’t see why either political party or either branch of government should gain any leverage by threatening economic harm to the United States of America whose financial management is the mutual responsibility of each of them.

The whole thing reminds me of the great moment in “Blazing Saddles” when Sheriff Bart takes himself hostage by pointing a gun at his own head. The simple townsfolk of Rock Ridge were dumb enough to fall for it. Are we?

Yes, apparently we are. You can read through reams of reporting about the debt ceiling and not find anything that explains the most basic facts about the situation. It is widely being reported on as a conventional Washington standoff, in which Dems want a debt ceiling hike, Republicans want spending cuts, and we’re now going to see a game of chicken in which the two will meet somewhere in the middle. This bears no relationship to the reality of the situation, in which Republicans are pretending that in refusing to hike the debt ceiling, they are withholding a concession for which they should ultimately be rewarded. In reality they are demanding that Dems give them something in exchange for agreeing not to do immense damage to the whole country. As Dellinger’s email neatly demonstrates, the situation is profoundly absurd and unbalanced — yet this is completely lost in the business-as-usual coverage.

Fortunately, it’s becoming clearer that the White House and Democrats really don’t intend to play along. Chuck Schumer reiterated today that Dems will not negotiate around the debt ceiling. Harry Reid has privately told Obama that he will support it if the president utilizes a way to get around the debt ceiling that doesn’t involve Congress. While the President is unlikely to opt for that route, the support for it among Dems suggests they are in no mood to see any concessions made in response to GOP debt ceiling hostage taking.


Okay, now it’s official. I’m the new managing editor at Crooks and Liars, and I’ve been swimming in the deep end for the past two weeks. Please be patient until we get back to our regularly scheduled programming.

How the austerity class rules Washington

The Nation’s Ari Berman:

How, in the midst of a massive unemployment crisis—when it’s painfully obvious that not enough jobs are being created and the public overwhelmingly wants policy-makers to focus on creating them—did the deficit emerge as the most pressing issue in the country? And why, when the global evidence clearly indicates that austerity measures will raise unemployment and hinder, not accelerate, growth, do advocates of austerity retain such distinction today?

An explanation can be found in the prominence of an influential and aggressive austerity class—an allegedly centrist coalition of politicians, wonks and pundits who are considered indisputably wise custodians of US economic policy. These “very serious people,” as New York Times columnist Paul Krugman wryly dubs them, have achieved what University of California, Berkeley, economist Brad DeLong calls “intellectual hegemony over the course of the debate in Washington, from 2009 until today.”

Its members include Wall Street titans like Pete Peterson and Robert Rubin; deficit-hawk groups like the CRFB, the Concord Coalition, the Hamilton Project, the Committee for Economic Development, Third Way and the Bipartisan Policy Center; budget wonks like Peter Orszag, Alice Rivlin, David Walker and Douglas Holtz-Eakin; red state Democrats in Congress like Mark Warner and Kent Conrad, the bipartisan “Gang of Six” and what’s left of the Blue Dog Coalition; influential pundits like Tom Friedman and David Brooks of the New York Times, Niall Ferguson and the Washington Post editorial page; and a parade of blue ribbon commissions, most notably Bowles-Simpson, whose members formed the all-star team of the austerity class.

The austerity class testifies frequently before Congress, is quoted constantly in the media by sympathetic journalists and influences policy-makers and elites at the highest levels of power. They manufacture a center-right consensus by determining the parameters of acceptable debate and policy priorities, deciding who is and is not considered a respectable voice on fiscal matters. The “balanced” solutions they advocate are often wildly out of step with public opinion and reputable economic policy, yet their influence endures, thanks to an abundance of money, the ear of the media, the anti-Keynesian bias of supply-side economics and a political system consistently skewed to favor Wall Street over Main Street.

Taken together, the various strands of the austerity class form a reinforcing web that is difficult to break. Its think tanks and wonks produce a relentless stream of disturbing statistics warning of skyrocketing debt and looming bankruptcy, which in turn is trumpeted by politicians and the press and internalized by the public. Thus forms what Washington Post blogger Greg Sargent calls a Beltway Deficit Feedback Loop, wherein the hypothetical possibility of a US debt crisis somewhere in the future takes precedence over the very real jobs crisis now.

Even President Obama’s new jobs plan—a long overdue break with austerity-class orthodoxy—has been pitched in the context of deficit reduction. Every debate over measures to improve the economy begins with the question “How much will it cost, and can we afford it?” rather than “How many jobs will it create, and how will it help the country?” Far from possessing the solution to our economic crisis, the austerity class represents a major impediment to finding one.

We need a revolution, don’t we?

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