Crisis Countdown, Republican Style
Here we are on day 11 of a U.S. government shutdown, and less than 130 hours from a Debt Ceiling Dooomsday due date. Despite those realities, yesterday the financial markets partied all day when it sent the Dow soaring for its biggest one day gain of 2013—a 320+ point rally. That party continued into Friday with a near 100-point gain (despite the fact that the Senate Republicans have just met with the president, which could result in a myriad of outcomes, yet to be disclosed). In fact, the 400+ point gain in the Dow is truly astounding, at least to me.
Because despite the fact that a few “kick the can” ideas have been floated and discussed, there is no evidence that any budget deal is imminent. Remember, we do not have only one “challenge,” to put it mildly, we have two impending threats to U.S. growth and our global economy. We have the shutdown of the government, and we have the looming Debt Ceiling stand-off—although the Debt Ceiling stand-off could be ended shortly. In all of the excitement on Wall Street yesterday, one fact is getting lost: and that is that House Republicans are still demanding “things” before they give in on anything, something that the president has rejected for months. And he means it. Really. He will not negotiate with a gun to his head or the heads of the American people. Yet they insist on demanding tax cuts and other GOP “favorites” like entitlements before they will agree to turn the government back on. Given that we are looking at the beginning of Week 3 of the shutdown next week, this is a very dangerous proposition. That’s because there is still much room for miscalculation, especially when you take into account the cast of characters, cuckoos, and egos involved.
So what has been the fallout of the government shutdown which rages on to this day? What happened to the GOP brand in all of this? That is where things get truly interesting. According to multiple polls, including Gallup and a Wall Street Journal/NBC poll, Republican approval has sunk to an all time-low—the lowest in 24 years (since Gallup started tracking these numbers). But what did House Leader Boehner expect? You should not be surprised when you give the keys to your car to an unpredictable, unruly, rebel without a boss-like-teenager, and find yourself mired in a deep ditch.
Consider these numbers:
* Less than one in four of the American electorate approve of the Republican party—worse than Watergate!
* Only one in five Americans approve of the Ted Cruz-led Tea Party
* Well over half of Americans blame the Republicans for the problems in Washington
* Less than one in three Americans blame the President for the shutdown
So what is the moral of the story? The Republicans have placed themselves in a huge box and then decided that the best thing they could do next was to assemble into a circular firing squad. In other words, we may be watching a truly historic event. The near-death of one of the two political parties of the United States—or at least a re-definition of one. Before I go too far down this path, however, historians like Douglas Brinkley have correctly pointed out that things like government shutdowns are quickly forgotten within a few years after they are repaired.
But this time could truly be different.
Yesterday I spoke to a very smart economist from the U.K. He told me what I already knew: that the rest of the world looks on at the lone super power that is America and is dumbfounded. How can such a powerful and rich and free nation be held hostage by heinous politicians that consistently put their own political needs above the needs of the American people? In fact, 70 percent of Americans feel that Republicans have put their own selfish political whims above the wishes of their constituents and the American people. It is that selfishness that stands between a budget deal and a proper functioning of the U.S. government. So the Senate Republicans will meet with President Obama in a couple of hours. My prediction is that this will not end in any resolution of the Government shutdown, even though it could result in an to the Debt Ceiling overhang.
Which means that the tiny faction of the worst part of our government still may have the power of getting their way by keeping the government shut down.
But only time will tell.
Please stay tuned for frequent updates!
—Jeffrey A. Krames, October 11, 2013, 12:30 pm EST