By Brendan Loy
I have one additional thought on the debt ceiling, which I meant to include in my previous post, but which probably deserves its own post, so here goes:
I think politicians on both sides of the aisle — and more broadly, partisans on both ends of the ideological spectrum — are vastly underestimating the political downside risk of a failure to raise the debt ceiling, and the resulting default or semi-default. The political consequences for the current powers that be, Republican and Democrat alike, are potentially catastrophic. I don’t just mean suffering dips in approval ratings, or losing the 2012 elections. That’s small potatoes. Worst-case scenario, this could go much deeper. With unfavorable ratings for both major parties already nearing record highs, and vulgar anti-Washington hashtags making waves on Twitter, things are already approaching a boiling point. As I tweeted a few days ago, in the spirit of Harry Potter, the politicians engaging in this debt-ceiling brinkmanship aren’t just playing with fire. They’re playing with Fiendfyre.
If a deal is reached, or if a short-term semi-default happens but is quickly remedied and the negative economic consequences are relatively tame (and/or indistinguishable from the already poor economic climate), the current bout of voter anger will largely fade into the background noise of standard-fare anti-Washington sentiment. But if there’s no deal, and default or semi-default happens, and there are severe (and easily identifiable) economic consequences — real-world economic pain hitting voters, and flowing directly from the total dysfunction of our federal government — there is almost no ceiling to the potential political fallout.
If such a thing were to happen, all the back-and-forth talking points of the present negotiations would appear totally childish and ridiculous in retrospect; the only salient fact would be that Washington’s inaction caused a recession or depression. Voters’ rage would be unmeasurable, and rightfully so. To quote from another fantasy movie, their wrath would be terrible, their retribution swift. At a minimum, I think you would see a credible, and maybe successful, third-party candidacy in 2012 — I’ve already predicted a third-party victory if unemployment exceeds 13% in the wake of a failure to raise the debt ceiling — but that could be just the beginning, if things get bad enough. If a severe second recession, or even a depression, can be traced to a specific, identifiable failure of both parties to govern the country in a defensible way, it could conceivably be the end of one or both of the major parties as we know them.
I recognize that pronouncements of “OMG THE DEATH OF THE MAJOR PARTIES!!1!” are a dime a dozen from squishy No Labels-ish centrists like me, folks with a history of political love affairs with Lieberman and Bloomberg and their ilk. But this is different, I think. I’m not talking about a third-party (and perhaps fourth- and fifth-party) movement led by coastal, technocratic centrist elites, self-styled Good Government Types who think There Must Be A Better Way. I’m talking about a broad-based rage against the current governing parties that would awaken the sleeping giants of American politics: the largely unengaged, uninformed, low-information voters who don’t really know or care much about politics, but who would easily understand and care about such a simple, basic — and, in this scenario, true — storyline as, “You personally have been directly f***ed over by an abject failure of your entire federal government. We are now in a recession/depression because they, all of them, didn’t do their damn jobs.”
If you think the Tea Party was an example of the grassroots waking up and rising up, just wait until you piss off the Great Middle in this fashion. The momentum of the awakening I’m describing would be unstoppable; all nuance would be lost; everyone would be blamed. Even if the actual proximate-cause equation were to become complicated — for instance, if the downturn following a default is worsened by unrelated factors like, say, a collapse of Italy next month or whatever — too bad. These voters, once roused to anger, won’t care about excuses like that. They’d be mad as hell, unwilling to take it anymore, and who knows what our politics would look like by the time they’re done?
Nobody does. And I’m not sure this is a risk that anyone in power — Obama or Boehner or McConnell or Reid or Pelosi or Cantor or anybody else inside the Beltway — really appreciates adequately. The scenario I’m describing is unlikely to come to pass, but I’d say it’s more plausible than at any previous time in my lifetime to date. And if it does happen? Hold onto your seats.
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