Debt-ceiling Showdown: A test of Sanity
by John Case
The so-called “debt ceiling” crisis is upon us. Unless the amount the US can borrow is raised, a second financial crisis looms, partial default on our debts, the furlough of 800,000 federal workers and contractors, cancelled
checks to millions of social security and medicare and medicaid clients, and a host of other evils. Th president has said his young children are performing better on their homework, than leaders in the Republican dominated House are on theirs. He’s called for all to leave ideology at the door as he convenes them again at the White House tomorrow. But the only ‘ideologists’ are the so-called Tea Party fanatics, who act as witting or unwitting flunkies for reactionary Ag-biz, Energy, Defense and some of Wall street interests — those planning to make a killing by ‘shorting’ the whole
economy as it tanks again — while striving to distract everyone with racist and nativist ‘dialogs’, keeping women barefoot and pregnant and calling it ‘religion’, and tagging unions not banks for the deepening crisis.
Its becoming a test of sanity how long it takes all reasonable people to conclude that the Republican party has painted its teeth orange, turned right, and jumped off a cliff, to mangle an old Dylan lyric. Conservative NY Times columnist David Brooks calls a) threatening to bring on another financial crisis and “stain the honor of our country” over debt, and b) refusing to raise any tax whatsoever — acts that voters will and should repudiate.
“If the debt ceiling talks fail, independents voters will see that Democrats were willing to compromise but Republicans were not. If responsible Republicans don’t take control, independents will conclude that Republican fanaticism caused this default. They will conclude that Republicans are not fit to govern. And they will be right”
Nobel Prize winning economist Joseph Stiglitz says the problem runs deeper than psychological challenges of leading Republicans. He calls the showdown over debt ceiling and the obsession of right wing leaders with even more austerity, alongside the stubborn refusal of the rich to pay even a penny tax — “the ideological crisis of western capitalism”.
What has happened is that the entire trickle-down, free market fundamentalist premises that began with the Reagan Administration and drove financialization for the past 30 years have been proven utterly false. Some call it neo-liberalism. In any event — its failing. Those clinging to the hollowed out ideology appear less and less lucid and more narcissistic. On a personal level, If not treated, this can become a personality disease we call “sociopathic behavior” — a life without conscience or sensitivity to any other beings.
The path ahead is toward more socialism to protect a fair distribution of wealth, and to restrain super high risk private corporate behavior and concentration, of power. “Too Big to Fail” means “Too Big to Remain in Private Control.”
More socialism does not mean the end of capitalism or markets. Competitive markets — that regulation insures remain competitive! — are democratizing. They are one known key to efficient — meaning productivity-enhancing — commodity production. They are an important, although hardly the only, factor in encouraging innovation.
Every generation re-invents and reproduces almost every facet of both public and private institutions and all relations of production and exchange, including social classes and the interactions of public and private
property. The “more socialism” of the next generation will not be the same public institutions that arose in the big 20th century expansion of public sector activities across the world. It will be smarter, more scientific, more resilient and less bureaucratic or centralized. We will find the ways to make public institutions and services more accountable to,, and closer partners with, the people they serve. And it will be global in scope.
I predict sanity will prevail. We will make it through this storm, as a people, though I cannot say what the toll may be, except that all will be changed. There are crazed Captain Ahabs on the decks of our ships, and they are obsessed with a whale of their imagination, when a tsunami of monumental dimensions is approaching starboard.
- Let’s Put Our Thinking Caps On, and Really Try to Figure Out the Best Way to Respond to This Argument (coordinationproblem.org)
- Stiglitz: The Ideological Crisis of Western Capitalism (economistsview.typepad.com)
- White House Debt Ceiling Summit Aims for Grand Deficit Bargain (usnews.com)
- Editorial: Make a deal on raising debt ceiling (knoxnews.com)
- Inequality Dampening Economic Recover (ritholtz.com)
- Politics hamper efforts to solve worlds debt crisis (theglobeandmail.com)
Conservative N.Y. Times Columnist David Brooks:
“If the debt ceiling talks fail, independents voters will see that Democrats were willing to compromise but Republicans were not. If responsible Republicans don’t take control, independents will conclude that Republican fanaticism caused this default. They will conclude that Republicans are not fit to govern. And they will be right…”