Rational capacity, responsibility and the debt ceiling: Some contrarian observations

 Yesterday was another strange day in the stock market.  With astonishing growth in the labor market, stocks went down based on the expectation of continued Fed rate hikes to combat inflation.  Goddamned Phillips Curve!  Investors remain remarkably sanguine about a debt ceiling resolution, and surprisingly so.  This one is more concerning than 2011, and 2011 was bad.  This morning, I am going to offer a contrarian interpretation.  Which is totally out of character.  If you have the reasoned capacity to act and resolve a problem, but you do not, then you are to blame.  In this construction, the word, "reasoned," is doing a lot of the heavy lifting, and it shifts the blame from the Republicans to the Democrats with respect to fiscal politics.  There are many issues on which Democrats lack any reason, and I regularly excoriate them.  Yet when it comes to the debt ceiling, the Republicans are not reasoned.  What does that do to our moral interpretations of Democratic actions?  Consider.

It may not be possible for Kevin McCarthy to permit any floor vote on a debt ceiling increase.  In order to secure the gavel, he had to permit a rule that allowed a motion to vacate to be offered by even one, single legislator.  There is a faction within the Republican caucus that sincerely opposes debt ceiling increases, because they are bonkers.  There is a much larger faction that believes if they do not wear bonkers-masks, they will get primaried.  Is that true?  No, and I have covered that, but as long as they believe it, those Representatives will continue to pander to the crazy wing.  Had the rule package required, say, 30 supporters for a motion to vacate, McCarthy could have permitted some sort of "deal" on a debt ceiling increase-- even a cave-- and survived because the bomb-throwing faction wouldn't be able to get enough support for the motion to vacate.  That was why McCarthy saw that as the most important rule, and the concession he really did not want to make.  However, it became clear to him that he would never, under any circumstances, get the gavel if he didn't make the concession.  So he did.  I do not think that McCarthy can let a debt ceiling deal get to the floor, because if he does, he gets Boehnered.  Remember, his caucus is batshit crazy, and all that really matters to McCarthy is not getting Boehnered.

What does this mean?  First, it means that the GOP must be seen as a set of automatons.  They are not strategic actors.  They are not, and cannot bargain.  A majority caucus in the House of Representatives should be able to look rationally at economic policy, formulate budgets on well-ordered preferences, negotiate in good faith, and seek first and foremost the best outcomes for the United States of America, thinking in terms of how their actions affect the livelihoods of Americans.

But that's not the Republican Party.  It's just not.  Democrats are incapable of rationality when it comes to anything related to "identity," and Republicans are incapable of rationality any time they think they have an opportunity to take a hostage and own the libs.  Irrationality extends beyond that, of course, on each side, but this is just the world as it is, and every viable philosophy requires that you acknowledge the world as it is and act as though the world is as it is rather than as you want it to be.  This is not merely the requirement of rational choice theory, but stoicism, Buddhism, and every other philosophy that teaches clarity.

This is a hostage-taking, own-the-libs situation.  The Republican Party is not going to act rationally, or in good faith.  Accept reality.  Act accordingly.  To whom is this an entreaty?  To Democrats, of course, because a failure to abide by this advice is not just a failure of clear thinking, but moral failure.

The Democrats had two years of unified government to solve this problem, knowing that the 2022 election was coming.  They had two years during which they could have eliminated the debt ceiling.  I even argued that the nuclear option would have been acceptable, not for some silly "voting rights" bill, but to eliminate the debt ceiling, thereby taking away the GOP's ability to hold the economy hostage.  Of course, that shouldn't have been necessary.  They could have eliminated the debt ceiling in budget reconciliation, or even just increased it by more to prevent this situation.  The debt ceiling does not increase the deficit, so the Byrd Rule doesn't even limit it to ten years, but it does involve expenditures, so you can eliminate it, increase it indefinitely, whatever.

They didn't.  Foolish.  Foolish and morally wrong because it gave a weapon to economic terrorists.  Knowingly.  Sell arms to terrorists, and we accuse you of abetting terrorism.  Holding the debt ceiling hostage is economic terrorism.  John Boehner even called Jim Jordan a "terrorist."  Nancy Pelosi didn't call Jordan a terrorist.  Boehner did.  The Democrats knowingly let them have a weapon.

Did anyone warn them?

I did.

So here we are.  What can the Democrats do?  They have two options.  The first is the "trillion dollar coin," and the second is the discharge petition.  There is a glitch in the laws permitting the minting of commemorative coins, which say nothing about the value of the coins to be issued.  Hence, Biden could instruct the US Mint to issue a trillion dollar coin, and deposit that coin at the US Treasury.  The balance of the federal government's account then goes up, and we can make payments.  It is phenomenally stupid, a gimmick, inflationary during a time of inflation (even though nobody can make change for $1 trillion, so the coin can't enter circulation!), and turns the entire process into an old Saturday Night Live sketch.  But it is better than defaulting on our financial obligations.  But only just barely.

After all, has anything bad ever come of printing money to pay your debts?  Gee.... lemme think about that...

Then there is the discharge petition.  If anyone introduces a bill into the House to raise the debt ceiling without conditions, McCarthy will refuse to act on it.  The discharge petition forces a floor vote on a closed rule (no amendments).  The petition requires 218 signatures, which is a bare majority of the House.  They almost never work, and nobody has successfully circulated a discharge petition since 2002, with an incredibly stupid and destructive law called the Bipartisan Campaign Reform Act, also known as McCain-Feingold.  You have been led to believe that Citizens United v. FEC "created" dark money, or led to the increase of dark money in the campaign finance system.  That's a lie, or at least, a grossly uninformed statement from people who never look at data, and never read the opinion.  Dark money started flooding into the system before Citizens United.  It happened because BCRA prohibited parties from accepting soft money donations, so the money started flowing to 527s, which didn't disclose their donors.  All Citizens United did was remove the rule that required independent groups to spend their money in the early part of the campaign, and leave the 30 days before a primary, and 60 days before a general to the principal campaign committees.  It just changed the timing of expenditures.  That's it.  You've been lied to.

Anyway, discharge petitions almost never work.  Why not?  The majority party relies on agenda control, and they threaten to punish their own members for signing one.  So the question-- and this is the real question-- is whether or not McCarthy would be forced by the crazy wing to punish members who would sign a discharge petition.

McCarthy's only way out is to allow a handful of Republicans to sign a discharge petition.

I have no idea if the guano caucus will tell McCarthy that he needs to publicly execute anyone who signs the discharge petition.  But given that uncertainty, the Democrats need to stop dithering.

Acknowledge reality.  There can be no meaningful negotiations.  Stop this.  Stop wasting time.  Stop the charades.  Stop the games.  Stop the bullshit.  Circulate the discharge petition.

Now.

One of two things will be true.  Either McCarthy will allow enough Republicans to sign a discharge petition without punishment, and the crisis is resolved, or the psychopath wing will tell him that they will introduce a motion to vacate if the petition reaches 218 signatures.  If the latter is the case, there's one way out.  The coin.

Biden's administration has said that they won't mint the coin.  This is either stupid, or classic Schelling.  Try to remove your own option in order to constrain your opponent.  Biden does not want to mint that coin, certainly not in a time of inflation, but the Democrats dug this hole for themselves by not solving the problem in 2021 or 2022.  Because raise your hand if you saw this coming.

The problem is that right now, neither Biden nor congressional Democrats are doing anything.  That's why this mess exists.

It is also correct, of course, to say that the mess exists because the Republicans have gone insane, but responsibility exists for those who have the sanity to recognize the existence of a problem, and the power to solve it.

If you have those, and do not act, then you have failed to act in accordance with moral principles.  At this point, I am uninterested in discussing Republicans.  My cat is old.  She occasionally as "outside the litter box" issues.  I'm not going to argue with my cat because she's a goddamned cat and you cannot argue with a goddamned cat.  You just clean up the mess and acknowledge that old cats are sometimes like that.  You take the cat to the vet, but if that isn't it, you just have to be the one to clean up the mess and try to find some problem-minimizing strategies.

Is it fun?  No, but you cannot negotiate with a cat.  You don't say to the cat, you clean it up!  You don't dare the cat.  You don't leave it there as a "lesson."  You just clean up the mess because you are the human, and the cat is the goddamned cat.  This is what it means to be the responsible one.

Here is reality.  A large faction of the Republican Party is either stupid, crazy or both.  Actually, most of Congress is either stupid, crazy or both, but the parties have different forms of craziness.  The Republicans are unable to be rational or responsible about the debt ceiling.  They are too attached to hostage-taking and games of brinksmanship that will, if allowed to play out, eventually blow up the economy.  While the Democrats have their own forms of lunacy, at least they recognize the need to raise the debt ceiling, and they do have the power to do so.  Even under divided government, they have the power to do so.

Do so.  Now.  No more games, no more charades.

Otherwise, the Democrats are taking responsibility for the risks and damages.

Why?  Not because blame doesn't fall on the Republican Party, but because the ability to perceive a problem, the ability to find a solution, and refusal implement that solution is irresponsible.

In an ideal world, would the Republicans be this crazy?  No, but one must think and act with clarity.  To do otherwise is to bear responsibility for the consequences.  Is that fair?

Who said life was fair?  Live and act with honor, rather than letting a disaster happen because you think that what has fallen to you is unfair.

Right now, the Democrats are acting dishonorably in a "fairness" temper tantrum.

Here's Rainer Ptacek's cover of the old classic, "Last Fair Deal Gone Down," from Rainer & Das Combo.