What Was that All About?
For weeks, conflict has been the theme in Washington. The government was actually shut down, in part, over an argument among the Democrats, Republicans, and the new kids in town, the Tea Party. No one won, everyone lost, the world was shocked, financial instability was threatened in a big way, businesses found another excuse to stay un-busy, and in the end, the proverbial can was kicked down the proverbial road. In an attempt to avoid having another ‘civil war’ over the budget in three months, a Congressional bipartisan committee was formed to spend the next few weeks coming to a rational agreement on upcoming budget issues. - Insert cynical comment here.-
This article first published October 20, 2013
|JRandal Forsyth, In Barrons’ “Up and Down Wall Street” column, summed it up:
“The bruising battle over the budget ended last week with a last-minute deal to reopen the government before Oct. 17, the date on which the Treasury supposedly would be out of cash and gimmicks to juggle its borrowing,. After the sturm and drang, however, this brings only a short reprieve. The deal produced a continuing resolution to keep the government operating through Jan. 15 and borrowing through Feb. 7. A bipartisan conference committee was tasked with developing a budget program by Dec. 13, with revenue and spending plans for the next 10 years.
The Economist published an article on 10/19 about the “Fiscal Deal in Washington,” and they headline it as “Worse than Europe, Really.” When a respectable publication pictures Mr. Obama in a French striped shirt and beret, and Mr. Boehner in liederhosen auf Deutschland, you know things have come to a bad patch.
Maureen Dowd of the New York Times, in her Sunday 10/20 column “Cat on a Hot Stove,” took the President to task for his lack of action before and during the crisis, his long-standing reluctance to dirty his hands with anything as slimy as politics, and the professorial manner with which he tries to teach those of us who are not as smart as he. She wrote:
”President Obama won big. So why did the moment feel so small? At his victory scold at the State Dining Room on Thursday, the President …assumed his favorite role of the shining knight hectoring the benighted: Sir Lecturealot:”
“All of us need to stop focusing on lobbyists and the bloggers and the talking heads on radio and the professional activists who profit from conflict.”
Ms Dowd wondered, “We have met the enemy and they are …bloggers?”
There was something positively third-world about the almost-default of the federal government, the possibility that our government would not be able to make payments on Treasury bills, notes, and bonds. Bill Gross of Pimco compared U.S. Treasury debt to that of Italy and Spain, two European countries whose economies seem to be improving – well enough, at least – to make their bonds maybe a better bet than our own.
This internal conflict within the halls of Congress about the US paying its bills, at first befuddled, and then irritated, the world, no end.
The New York Times ‘Notebook’ column by Serge Schemann (Oct 20), headlined “World to Washington: “Really?” covered some of the world’s reaction to our nation’s capitol’s latest (possibly greatest) dysfunction over raising the debt ceiling. The general theme being, is this any way to run a country the size of the US?
Quoting Simon Jenkins of the Guardian (late of Manchester, England), about the goings-on in Washington, DC:
“The pomposity of its architecture can no longer dignify the log-rolling, the Gerry-mandering, their lobbyist’s egregious power, the money sloshing everywhere, and the partisan polarization that drips from every news program.”
(We can only say: Isn’t that just like a foreigner, that is to say, a Non-American, to believe that news shouldn’t be political, that partisan isn’t just another way to spell patriot, that money should not be allowed to slosh wherever it wants, that gerrymandering is hyphenated and capitalized, and that Americans today even know the meaning of log-rolling.)
Possibly the most serious assessment came from our largest creditor nation, China. As the world’s largest holder of dollars, and a country whose willingness to take dollars (even though we print them like there’s no tomorrow) has been a major boost to every American’s standard of living, China’s opinion counts on this subject.
So it was striking when Liu Chang, of Xinhua, China’s news agency, was quoted as calling for a “de-Americanized world,” one that would have a ”new international reserve currency that is to be created to replace the dominant U.S. dollar, so that the international community could permanently stay away from the spillover of the intensifying domestic political turmoil in the United States.”
This statement may carry no real power, but neither is it just a personal opinion. In China’s realm, through its official news agency, it’s hard to imagine that such a statement was any less than edited, approved, and released for official reasons. A warning shot across the bow of the USS Dollar, perhaps.
In the end, the fight in Washington this time stemmed from a doomed plan to de-fund Obamacare. Or perhaps, an idea to postpone it for a year. We’re pretty sure all the hullabaloo had something to do with the Affordable Care Act - surely it wasn’t just a Party that got out of control. But it was the wrong approach, with the wrong strategy, on the wrong battlefield.
Bad timing, too. While all this was going on, Healthcare.gov was rapidly becoming Snafu City. The Obamacare website was aimed at the 20- and 30-somethings that are used to doing everything online quickly and painlessly. Yet on roll-out, it was full of glitches, prone to crashes, and almost impossible to use.
Obamacare’s most fervent opponents in Congress could have saved themselves and the whole world a lot of trouble had they just stood back to watch the program’s roll out collapse on its own. Over three years in the making, a $600 million dollar budget, and look what happened.
Then, they could just say “I told you so.”