A view to a downgrade

I woke up early this morning to the sound of screams, which I'm now pretty sure were my own. I don't know exactly what kind of effect the S&P downgrade will have on the U.S. or world economy; Dylan Matthews says it could be trivial, as it was with Japan's recent downgrade. But symbolically, it's horrible. It's a (technically) neutral observer saying "We know you have debts, and we know you have the money to pay them, but we don't think you'll do it." And it's hard to counter that assessment given recent political events.

Ezra Klein has a good take this morning. He notes S&P's chutzpah -- they told us just a few years ago that all those financial products from a few years ago that turned out to be complete junk deserved an AAA rating, which contributed to the massive meltdown of 2008. Oh, and thanks to that meltdown, government revenues have dropped and outlays have increased, which is a large part of the reason our debt has spiked. But that aside, they're not wrong to question America as a solid investment. As Ezra says, quoting the S&P statement,

“The downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges,” they explained in the statement accompanying Friday’s decision. After Republicans in Congress spent three months weighing whether or not to default on our debt and Senate Minority Leader Mitch McConnell said that paying our bills would never again be a foregone conclusion, can anyone really argue with that? After every Republican presidential candidate save Jon Huntsman either remained silent on, or flatly opposed, the deal to raise the debt ceiling, can anyone really say that U.S. debt is completely riskless? That there’s no chance of a political miscalculation, and if there is such a chance, that they can perfectly predict the outcome of the ensuing chaos?

I'd like to think that such a sobering assessment from an ostensibly neutral observer would turn this into a cooperative game, that it would force members of Congress to reconsider some of their previously held beliefs. It won't. Republicans read this as evidence that the cuts in last week's debt ceiling deal weren't deep enough. Democrats read it as evidence that Republican recalcitrance on taxes is killing the country.

What might be more realistic to hope for would be a reassessment of how the U.S. structures its political institutions. For example, perhaps we should just do away with the debt ceiling, an unnecessary vote that just invites hostage-taking. More generally, perhaps we should do away with counter-majoritarian rules (like the filibuster) and just let the majority party govern as it wishes. If Democrats want to increase services and taxes to pay for them, let them, and let the voters decide if they should remain in power or not. If Republicans want to return us to 1920s levels of services and taxation, let them, and let the voters judge.

I recognize that such an ideal can never be quite achieved in a system where executives and legislators are elected separately, which allows for divided government. But moving toward this ideal would likely be better than our current situation, in which one party's top priority is to protect government services and the other's top priority is to not pay for those services and both have the power to see their top priorities enacted simultaneously.

The debt ceiling metaphor I was looking for

Last week, I did a post comparing John Boehner with Indiana Jones pointing a bazooka at the Ark of the Covenant. In retrospect, I think the better metaphor would be the bounty hunter in Jabba's Palace using a thermal detonator as a negotiating tool. Interestingly enough, Obama's response was almost exactly the same as Jabba's -- pay the price demanded, and let the bounty hunter spend the night in the palace.

Modern Republicans and the invented crisis

Jeanne Cummings and Mark Niquette wrote a decent piece for Bloomberg recently suggesting that the ultimate cause of the current debt ceiling crisis is the rapid rise in party loyalty in recent years. This is only partially right. Hyper-partisanship is a necessary, but not sufficient, condition for this crisis.

To be sure, polarization has occurred among both parties, and both parties' Congressional leaders are willing to play serious hardball to get what they want. But only one party chose to impeach a president for lying about fellatio. Only one party proposed shutting down the government to force a president to agree with its agenda. And today, that same party has chosen to use the pretty routine task of raising the debt limit to pay for past commitments as a weapon to constrain future spending. This is simply how the modern Republican Party operates when Democrats control the White House: they invent crises. I do not say this to score partisan points -- it is simply an observation of recent political history.

Why do they choose such high-profile showdowns, especially given the outcomes of previous showdowns? After all, while the Clinton impeachment embarrassed the White House and possibly affected the 2000 election, it failed to remove Clinton from office, portrayed the GOP as extreme, and cost Speaker Gingrich his job. Similarly, the government shutdown of the mid-1990s is, among Republican officeholders, widely believed to have been a huge miscalculation that damaged their party's reputation and strengthened President Clinton's hand.

But the Republicans do not pursue such tactics to become loved. For one thing, you don't need to be loved to win an election, just hated slightly less than the other guy. For another, the GOP approach to governing is a logical consequence of how they whip up their activist base in order to win elections. If you tell people that the president is an illegitimate, immoral monster or that government spending is a mortal sin enough times, eventually you have to deliver on it or your base sees you as a fraud.