Government Shutdown Bait and Switch Underway

The date for when the government will default if Congress does not authorize an increase in the debt ceiling is apparently now November 1 not October 17. This according to a story by Annie Lowrey, "Tracing the Calendar Down to the Last Cent":

That is when more than $55 billion in federal payments come due, almost certainly more than enough to use up whatever cash the Treasury might still have on hand. The three weeks between now and then — should Congress fail to raise the debt ceiling — would most likely be ones of market turbulence, plummeting confidence and a slowing economy.

But so far the markets have not reacted in a significant way. Jesse Eisinger writes in a DealBook column "Complacency on Wall Street Could Be Worse Than a Panic" that having gone through this once before people are jaded and feel that this is all a pantomime on the Potomac that can be ignored. Eisinger cautions that this is dangerous and could lead to disaster; he thinks that there are real not fictive barriers to reaching a deal. As someone who has been predicting an adverse market reaction by now if a deal had not been reached, I tend to agree with him.

There appears to be a deal of sorts in the offing. That deal, according to the reliable Jonathan Weisman, involves a short-term funding of the government and raising of the debt ceiling while negotiations begin once again in pursuit of the El Dorado of the "grand bargain." The problem with the grand bargain is there is no deal at the end of that rainbow. It is a Paul Ryan initiative. It is my perception that anything Ryan touches -- not unlike George W. Bush, another youthful-seeming, modestly telegenic GOP standard bearer -- turns to shit in his hands. Ryan wants to take a meat ax to Medicare and Medicaid. There are not the Democratic votes there. Any grand budget deficit bargain would have to be extremely modest to get through the Senate. Then you're right back at the problem that started all this -- the Tea Party fire eaters in the House. They will torpedo any modest grand bargain.

As for the problem that started all this, the fire-eating Tea Party, there is a frontpage story by Eric Lipton, Nick Confessore and Nelson Schwartz, "Business Groups See Loss of Sway Over House G.O.P.," that is worth checking out. I think it oversells the extent to which groups like the National Retail Federation and National Federation of Independent Businesses will go out of their way to recruit and fund primary candidates to take down some of the Tea Party yahoos in the House. Nonetheless the article features some choice quotes:

“We ask them to carry our water all the time,” said one corporate sector lobbyist, who demanded anonymity in order to speak frankly about the relationship with Republicans. “But we don’t necessarily support them 100 percent of the time. And what has happened is the rise of an ideological wing that is now willing to stand up to business interests.”

Lipton, Confessore and Schwartz rightly point out that the Tea Party phenomenon is a Frankenstein monster of the Chamber of Commerce's making:

To some extent, the Chamber itself, along with other lobbying groups, helped create the conditions for Washington’s impasse. 

After the 2010 elections, the Chamber and other business interests funneled millions of dollars into Republican redistricting efforts around the country, helping draw overwhelmingly safe Republican districts whose occupants — many among the most conservative House members — are now far less vulnerable to challenges from more moderate Republicans. 

The Chamber spent more than $32 million on the 2012 election, nearly all of it backing Republicans. Similarly, the American Banking Association sent 80 percent of its $2.6 million in political action committee donations to Republicans in the last election cycle, compared with 58 percent in 2008, according to data compiled by the Center for Responsive Politics, out of dissatisfaction with Democratic efforts to impose more financial regulations.

Two-thousand-and-eight might seem like a lifetime ago but the political vibe that it created at the time remains vivid to this day. Bush and Cheney had thoroughly discredited the Republican Party with a disastrous invasion and occupation of Iraq and a ham-handed response to the Lehman Brothers collapse. A black man won the presidential election in a rout. He had large Democratic majorities to work with in the House and Senate. Business leaders were shitting their britches. They feared a raft of progressive legislation -- card check, carbon regulation, universal health care -- churning out of Washington.

Starting in the summer of 2009 they fired up the assault engines. In order to man those engines, the only people around willing to be used for the cause were the kooks and conspiracy-theorist types.

The kooks have always been around. In our recent political dispensation, say since the 1960s, they have been known as Birchers, the far Right Wing ideologues that filled the ranks of the John Birch Society in Southern California suburbs and who believed communists were everywhere hiding in plain sight. The difference is that in our present-day period these kooks have been provided a megaphone. The media dutifully fell in line and reported the orchestrated response of kooks being lined up to speak out against health care reform at the Congressional townhalls conducted that summer of 2009 as somehow signifying a grassroots popular democratic mass uprising against Obama and progressive policy. It was nothing of the sort. It was nothing more than an assiduous stove-piping of select events and images which created the impression of an uprising. "If you build it, they will come." And they did. Citizens United helped. The 2010 elections were a watershed for the Tea Party.

And here we are today.