Default? Who cares? I assume that the notion below has been circulating on talk shows or web sites*, because I've gotten a bunch of messages making the same claim. A reader writes:
Default on the US national debt? Nothing new about that. Three times in US history the US has defaulted on its sovereign obligations. Once just after the Revolutionary War in 1790 when the treasury obligations, then valued at 75 cents on the dollar were "restructured" resulting in large losses to the creditors. And again in 1933 when the US went off the gold standard so that paper certificates could no longer be exchanged for gold. And yet again in 2008 when the Federal Reserve cut interest rates below the rate of inflation, a move which has cost savers over $100 billion so far with no end in sight. Another default? So what?
Why it's hard to engage arguments like this one. What's wrong with the argument above? The three cases this reader mentions are very different from one another, and completely different from what is contemplated now. I suspect that anyone who knows U.S. or economic history realizes this already, and that anyone who doesn't is not ready to be convinced of it by a list of similarities and differences.** A reader responds to a similar aspect in the "shutdown? What shutdown?" note I cited yesterday.
The reader you quote in your Sunday Shutdown #2 report is a good example of the sort of attitude that has me avoiding all discussion of politics with conservatives. It's true that sometimes you can have a reasoned discussion with folks coming from the right wing, but mostly I just encounter what I have to think is a kind of feigned ignorance.
Did the reader really expect immediate chaos in the aftermath of the shutdown? No. But did anyone? No. It's the perfect straw man argument. Does the writer really think there are no short and long term consequences for the country and himself by extension? He can't be that naive.
Does the reader really believe "The Left" is trying to bully WWII vets? Does he really believe that national parks and monument should be left open and unguarded in the absence of the park rangers that normally keep visitors safe and facilities clean? I'm almost certain he does not....
I think this is what we reap of what has been sown by the right-wing media, the radio hosts and talking heads. I'm convinced that people like the writer of this email are simply aping what they see and hear from the Rush's and O'Reilly's, which is: what's right and reasonable and accurate doesn't matter; winning is what matters. They'll take on all of your straw men. If you confront them with a real argument, they just move on the next straw man on their list.
In that context, one of many fascinating details from this New York magazine Q-and-A with Antonin Scalia is the implication that he now gets a lot of his news from "talk guys" on the radio.
On other historical parallels, a reader correctly notes the frequent misuse of "decline of Rome" reasoning but nonetheless says there is a parallel to be drawn. It concerns what we've discussed here over the years in the context of filibuster abuse: namely, what happens when norms collapse in a norm-based system.
Aside from the US Civil War, much of the shutdown situation hearkens back to the late Roman Republic. It's common for people who are interested in ancient Rome to call out nearly every situation in American political life as a parallel to the Roman Republic, myself included. Often as not we are missing or ignoring crucial context. However, as the government shutdown morphs into a government default, I think the lessons loom larger. It is a prime example of what can happen when norms collapse in a system of government based on norms.
In 59 BCE, Julius Caesar was co-consul with Marcus Bibulus, who was ardent foe of the Caesar/Pompey (above)/Crassus alliance we know now as the First Triumvirate. The first thing Caesar did was propose a law that let the Roman state purchase land to give to Pompey's soldiers as payment, which Bibulus promplty stalled to death in the Senate. In response, Caesar took it to the Centuriate Assembly where after a bitter political fight, the bill was ready to be passed. In a desperate move to postpone the bill, Bibulus declared that every remaining day until the end of his consulship that the Assemby could meet was a holy day. This meant that the Assembly couldn't legally meet, killing the bill and every other bill Caesar might want to present.
Caesar responded to this obvious breach of norms by breaching the norms right back, sending his lictors who threw Bibulus out of the chamber, smashed his symbol of office, and for good measure dumped a chamber pot over him. Following this, Bibulus retreated to his estate and continued "observing the sky for omens" while Caesar ran the government, since doing so technically meant that no legislation that was passed was valid.
The original government shutdown if you will. While I often refer to Speaker Boehner as Speaker Bibulus, Obama has not taken the corresponding path of Julius Caesar. Indeed, the US government is arranged how it is because the founders thought that it would prevent the same kind of problems that plagued the late Republic. Unfortunately they, like so many, overlooked the ingenuity of fools.
The next example is Caesar's later crossing of the Rubicon with his armies, setting off a civil war. His enemies in Rome were waiting for him to return so they could convict him on charges including his actions against Bibulus during his consulship.
Speaker Boehner has his own Rubicon in front of him. He knows that if offers a clean debt ceiling and/or spending bill, his time as Speaker is finished. Democrats will not save him but to use him. The best anyone will remember him for is that he didn't cause a catastrophe, which is damning with faint praise. Even if Boehner decides the country is more important than the Speakership, the next Speaker will face the same real political forces that pushed Boehner to where he is now. And the next one if he or she blinks. And the one after that. We still have well over a year before any new House members will be seated. Someone in the current Republican caucus, in the line of succession, will believe that they can profit from that chaos and shove the country over the edge. Then we'll all have to put another country together from whatever pieces are left.
And, this morning's note of cheer from an American abroad:
I'm currently in Japan attending an international technical conference and a number of us from the Anglophone countries (in this case: Australia, Canada, UK and USA) gathered for dinner. We've all known each other for years and have developed some pretty strong friendships, so we all speak very candidly about politics when we're all out together.
We were discussing the current governance crisis in the US, when one of my colleagues put it quite blunty and said, "The single biggest threat to the current peace and prosperity of my country is the United States. You're all lucky you can hide behind your military because the actions of your government warrant a military intervention to protect the rest of us from your foolish actions." The rest of the group all nodded their heads in agreement.
Now, I don't want to make too much of this statement and claim it represents the consensus view of their countrymen, but the fact that our three closest allies all view the United States as the biggest single threat they face should make any sober-minded person stop dead in their tracks and reflect upon the extreme damage this Republican-lead temper tantrum is causing. I should say that these are all proudly conservative voters in their home countries.
Next up: more cheer at the regional level.
Update * It appears that one of the web sites conveying this impression might have been, ummm, our own.
** For the record:
- In 1790, the infant U.S. dollar played virtually no role in world finance or commerce, versus its central role now.
- In 1933, the developed world was sinking into depression largely because of the foolish reluctance to go off the Gold Standard before that; for details, this is one more excuse to read the great Lords of Finance.
- In 2008, interest rates went below zero in inflation-adjusted terms, both as a result of and as an attempt to offset the world financial/economic collapse.
None of these had anything whatsoever to do with a politically engineered refusal to honor sovereign debt.