The Federal Shutdown, the Debt Ceiling and an Extremist’s Morning After

The fake government “shutdown” is already over. I hardly had time to enjoy it. I was just beginning to make a list of federal services that are “non-essential” according to the federal government itself. I was kind of hoping that the EPA, for example, would bite the dust. I does not seem fair.

The debt ceiling problem is also dealt with for the time being. It’s another expression of the same underlying problem that led to the “shutdown.” (See below.)

OK, after the crisis that just ended temporarily, it feels to conservatives like Great Britain in August 1944. The Luftwaffe rules the skies. Our few remaining pilots keep getting shot down. Our central city is bombed nightly. Everyone else who is civilized has already folded. Nightly, they are opening the Champagne in Berlin. We stand alone. It does not mean that we are wrong to stand.

Still, it also feels like the morning after. Time to look into it.

The so-called crisis is suspended for about four months. Nothing is solved. The Republicans collectively took a public opinion drubbing, it’s true. Speaking for myself, I will repeat what I said earlier: I am not attached to the Republican Party. I care only about limited government conservatism. Until now, the Republican Party was a not-so-bad vehicle for that view of the world. If it does not have the backbone to carry it further, so be it. Yes, I think that even if there is no other likely large vehicle in sight. I want to avoid pointless imaginings about my meaning by saying it clearly: What I fear most is not just another electoral defeat but a meaningless and useless electoral defeat such as the Republican Party suffered in the last presidentials. What hurts the most is the large number of nominal Republicans who just stayed home. Gov. Romney’s program was not the hill you want to die for. Gov. Romney was not the kind of commander who could induce you to die for that hill.

Here is the central conservative issue in a capsule. The phony government shutdown and the reappearing debt ceiling issue are parts of the same dark cloud:

A federal government that is deeply and routinely corrupt as well as shockingly incompetent keeps borrowing mindlessly to sustain the ordinary business of government.

It’s despotic; its’ a waste of resources; most of all, it’s immoral.

The mindless, nearly automatic borrowing is the worst part.

Myself, I think that I, my children and the federal government should only borrow under two circumstances:

  1. When the loan is to be applied directly to the acquisition of a tool that will contribute to greater earnings in the proximate future. I use the word “tool” liberally. Better freeways, for example, could easily qualify.
  2. When there is a strong presumption that we will earn more tomorrow . That’s with or without the condition in 1 above. This is separate. In the case of a country, for example demographic growth may by itself create such a presumption.

The present federal government’s borrowing fulfills neither condition. It’s borrowing to meet everyday expense. It’s as if I borrowed to buy bread for my lunch sandwich. There is also no reason so far to believe that the United States economy will grow a great deal tomorrow. (This could change the day after tomorrow if we had, for example, sudden access to new cheap energy. The Obama administration is doing its best to prevent precisely this from happening – Makes you think along dark lines, doesn ‘t it?)

Routine even legal, systemic federal government corruption: The widow of (wealthy) Senator Lautenberg received $174,000 from Congress because her husband took the trouble to die while in office. (WSJ 10/18/13, p. A12)

Federal Government incompetence: See the health insurance exchanges, in preparation for four years! Enough said! Note: I am not sure whether I am more afraid that its implementation will succeed or that it will continue to fail in exemplary fashion.

Mindless federal borrowing: It has become an integral part of the culture that the government must borrow to live. I said “integral part of the culture.” Below, an illustration I could not invent if I wanted to.

Larry Fink is the CEO of BlackRock, by some defensible measure, the largest investment firm in the world. Mr Fink said 10/16/13 or 10/17/13 (WSJ):

I have been in this business for 37 years. For 34 years I did not know there was such a thing as a debt ceiling.

Our point exactly! One of the highest placed business executives in the land takes government borrowing so much for granted that he does not know it’s subject to Congress-imposed limitations. He even sounds incensed when he learns the truth.

That’s what makes us conservatives, “extremists.”

Why do I care? I care because, unless there is another wave of fast economic growth lasting for several years, we are guaranteeing that our children and grand children will live in poverty. It’s wrong; it’s immoral.

And then, there is the growing phoniness of the public discourse including discourse by the mainstream privately owned press.

During the two days following the cessation of the pretend-government “shutdown,” the main media are eager to pretend that the multitudes feel great relief. They talk as if the average folks out there had experienced tremendous suffering because federal non-essentials were furloughed. I, for one, feel no relief at all. I don’t know anyone who does. (Agree, it’s an unsystematic sample but it’s a sample.) This is all the media’s deliberate exaggeration or a misplaced identification with federal public servants. It’s becoming more and more obvious that such public servants are overpaid and that they enjoy too many unearned privileges. (State public servants also, in some states, such as mine, California.) I don’t identify. It pisses me off. The more I know, the more pissed off I am.

They, the mainstream media, echo dumbly the noises coming from the administration about the alleged “costs” of the “shutdown” to the national economy. No one takes the trouble to do a net calculus, even to raise the issue of a net calculus. Isn’t it true that for each day certain federal bureaucracies are unable to do their job, some of the main producers in the nation are better able to produce? Again, the EPA comes to mind. And the IRS, of course. And a number of federal agencies whose names I don’t even know.

Besides, it’s an empty formula, a truism that (theoretical) wealth that fails to be produced usually is not regained, as the administration says gravely.

N. S. ! That’s what happens with Columbus Day and with Presidents’ Day, for example. (When only public servants and bank employees don’t work. When nearly the whole private sector keeps on producing wealth.) Why not cancel both holidays if non-production is a cause for worry? Why not make federal public servants come to work on both days if the president is worried? He only need issue an executive order. Bet you, he won’t even mention the possibility. And why do I have to state the obvious? Why aren’t the media doing their job? Have they been hypnotized? And, I almost forgot: if the president loses sleep over the missed production of federal employees, he could imitate the French in reverse and institute the federal forty-four hours work week. Would anyone notice?

Something else does not add up in the media’s discourse. For days, during the so-called “shutdown,” both administration officials and supposedly independent pundits threatened us with a world economic abyss because of number of non-essential federal employees were prevented from going to work. (I am not making this up; I am not exaggerating that we were told this ad nauseum; go back to those recent days, you will be amazed.) Yet, the day he current agreement is announced, the day we jumped form the edge of the supposed abyss, the markets reacted limply. The Dow Jones Industrial gained a lackluster 175 points that day. Now, that’s nice; it’s a gain for sure. However it’s no more of a gain than happens, for example, when the international price of the oil barrel comes down by ten dollars. The next day, the Dow Jones was flat. Trouble over; no big deal after all. Forget what we said yesterday. Forget the alarm. We were just kidding!

The Republican cave-in saves us from falling into the Grand Canyon and the market gives us a small hot dogs party by way of celebration! Does it make sense?

President Obama’s deftness never ceases to amaze me. No mistake seems to stick to him. On the day of the agreement, he declared that the new debt ceiling is not really debt. No one in the mainstream press questioned this absurd statement. Let me repeat, by the way, that I don’t think he is lying. He really does not know better. Academia is overflowing with his type of intelligent ignorance.

Perhaps, I am not grasping what’s going on, culturally. Perhaps, the reservoir of white American guilt concerning the long atrocity that was slavery, concerning racial segregation and discrimination also, is far from exhausted. Perhaps, the president can write checks on this for a long time to come. Or maybe, as Rush Limbaugh suggested, he struck a giant chord with the millions by giving them a chance to see themselves as victims. If you are a victim, almost any grotesque behavior is permissible. Soon only my wife, our grown children and I will be the only non-victims left in America. It will be a lonely existence. And, I wonder how long we will be able to support the victims because two of us are long retired (thus mirroring American demographics to come).

At one point one of Mr Obama’s servants referred gravely to the global reputational damage the shutdown has caused to the United States. (I don’t remember exactly who or when but I heard it with my own ears.) The “red line” in Syria about using chemical weapons does not in any way affect the credibility of the US, I suppose. The hundreds of civilians who died from chemical weapons died and all is forgiven. In the words of Pres. Obama’s former Secretary of State, “What difference does it make now?”

The day after the agreement the president gave another speech in which he advised those who don’t like something to just win elections in order to be able to change the something. I don’t think it was mistake. It was Freudian slip. President Obama does not believe that tea party Senators and Representatives who oppose him so tenaciously were just as elected as he was. It sounds familiar to me because I know history rather well and French history very well. The weakling tyrant, Louis-Napoleon, the Emperor Napoleon the Third (there was no Second) was initially elected. His supporters really thought that if you were elected by a sizable majority, you were morally allowed to do anything. They thought that was democracy. (There is a very nice readable piece by my old buddy Karl Marx on this topic for your reading pleasure where and when it rains: The Eighteenth Brumaire of Louis Napoleon, Abstract of Chapter I.)

Thus do we drift fast toward a one-party state. I warned about this a long time ago, before Mr Obama was even elected. (See also on this blog: “Fascism Explained“)

The unspeakable Senate Democratic leader Harry Reid said after the agreement was reached: “This is a time for reconciliation.” I don’t think so. I hope not.

Financial Armageddon; Hello Mongolia; Hello, Uganda!

Today, this blog has had a hit from Mongolia and one from Uganda. I have no way of knowing whether any of these hits correspond to someone actually reading an item. WordPress, the sponsor of this blog, does not keep this kind of numbers. And, perhaps, it’s just as well. Visitors from outside North America are very welcome on this blog. They are also welcome to make requests. And I prize their rare comments.

This is the Nth day of federal government so-called “shutdown.” The American Left, the Obama Administration, various international pundits, have been predicting world financial Armageddon because of the shutdown and because of the budget battle that will probably follow. Instead the most common stock index, the Dow Jones Industrial Average, was up 62 points today. That’s not much but it’s not nothing. It’s up, not down. It’s not quite half a percentage point up (.42%). The French CAC40 was also up. Up is not down, no matter how you look at it.

The coming federal budget showdown (don’t confuse with “shutdown”) is about the executive branch borrowing money. It’s not borrowing money because it’s facing some extraordinary expense. It’s become routine. The belief that the federal government cannot operate within its financial means has become deeply anchored without ever being presented to the people for a vote or even for a talk. Conservatives object.

Many conservatives affirm that government borrowing should never occur except under dire and exceptional circumstances. Me, I am a wishy-washy moderate conservative. I could be convinced that federal borrowing is virtuous but I want the discussion to take place in the open. We are working on it.

There is a small technical thing that bothers me around talk of government “defaulting.” Perhaps, something can help me with this. Suppose I own government debt; suppose I own a Treasury Bond for $1,000 coming due on October first. If the federal government fails to give me my money on October 1st but, instead hands me on an IOU confirming it owes me $1,000 that it will pay soon, how worried should I be? Is my landlord not going to accept the IOU? Is the bank going to toss it into the waste basket?

And would the executive branch of government do something illegal, unconstitutional by issuing such an IOU?

La Fermeture du gouvernement fédéral

Le gouvernement fédéral est fermé, enfin, en partie, enfin, un peu. C’est arrivé parce que les deux grands partis n’arrivent pas à se mettre d’accord sur le budget a venir. Jusqu’ici, on prend encore au sérieux ici la disposition constitutionelle qui fait du parlement la seule institution capable de décider du budget fédéral. Le Président peu tonitruer et pleurnicher tout ce qu’il veut; il n’est pas encore prêt à violer la constitution aussi visiblement.

Le gouvernement fédéral a été obligé de séparer ses fonctionaires entre les “essentiels” et les “non essentiels” pour décider qui mettre temporairement à pied. C’est un pas en avant pour le jour ou on fera vraiment le ménage.Il y a beaucoup trop de fonctionnaire fédéraux et ils sont trop payés; ils possèdent aussi trop de privilèges économiques inexpliqués.

Au raz du sol, la vie continue comme d’habitude sauf que le parc national du Grand Canyon a été fermé pendant quelques jours. La Bourse, elle, a haussée les épaules malgré les avertissements de Fin du Monde de l’administration Obama relayés et amplifiés par les presses étrangères aussi ignorantes que bebêtes.

Extremist Republicans Did the Right Thing

There is a poll suggesting that the Republican Party is taking a public opinion thrashing for provoking a government so-called “shutdown.” I don’t think there is much of a shutdown. And I don’t think a single poll means anything. If there were four convergent polls showing the Republicans being blamed, I would still support Republican e “extremists”, including Ted Cruz.

We will not get Obamacare defunded. That was hardly ever in the cards. It was just a good time to draw the American’s people attention to the abnormality that it the federal government. It’s a good time because its own actions right now illustrate both its pettiness and its gross incompetence. Keep veterans out of veterans’ monuments and fail just about 100% on the implementation of a vast ambitious program legislated on a completely partisan basis.

In addition, thanks to the crisis, many young people will be astonished to discover that, like them with their credit cards, the Federal Government cannot pay its bills to Peter without borrowing from Paul. Nothing new here; its’ just that many citizens don’t know this simple fact.

I don’t buy the argument that, of course, there was going to be technical glitches with Obamacare. Implementation of Obamacare is a big big project, of course, but it does not involve any novel technical challenge. And they had four years. And they could have asked Facebook, for example, to take charge. The federal government rarely does a small trivial thing well. There was no reason to believe it could do a big important thing well.

The main things Pres. Obama said four years ago about reforming health care turn out to be wrong, false. I don’t think he was lying then. I believe he and his advisers never had any idea of what they were talking about. They still don’t.

I am glad there were members of the Republican Party in Congress who manned up enough to point to the obvious.

If the Republican Party suffers as a result of the present crisis, I think it will have been worth it. Personally, I am not much invested in a Party that’s a little of everything and of anything. It’s conservatism that matters, the conservative perspective on the world. It’s the perspective that says that the best government is that which governs least. It used not to be a radical thought.

Yesterday, we buried my friend Filip. I had only known him for a few years but his departure leaves a hole in my mind and in my heart. At first, he was just a needed financial adviser. Then, we became friends around conservative politics and braised sweetbreads. We had both in common because we were both immigrants. We both detested authoritarianism and we both liked earthy foods. I was reared in France. My earthy food talents are good. Filip was reared in Communist Romania. His authoritarianism detector was superb. We were complementary.

An Exemplar of Governance: The United States and Chinese Citizens

I’ve briefly pointed out the penchant of Chinese citizens to look to the US as a role model for governance before. As Dr Foldvary has argued, it’s about governance, not government. Foreign Policy‘s Passport blog takes a look at how the recent government shutdown in Washington is viewed by citizens of the Chinese state:

[…] both China’s state-run and private-but-state-supervised mainstream media outlets have thus far reacted with restraint. Meanwhile, users of the country’s bustling, often candid, often profane social web have found a silver lining in the political paralysis that would surprise many Americans […] In Chinese social media, meanwhile, the government shutdown became an opportunity to criticize the Chinese government […]

Some veiled their critiques. Xu Jilin, a professor of history at East China Normal University in Shanghaiwrote, “The government has shut down, but the country is not in disorder — now that’s what you call a good country where people can live without worry.”

The gridlock itself, decried by most commentators in the U.S., struck many Chinese as a sign of lawfulness. As one user remarked, “A government that can shut down, no matter how big the impact on everyone’s lives, is a good thing. It shows that power can be checked, and the government can’t spend money however it wants.” […] Others took more direct aim at their own government. As one user noted, “Comrades, no need to worry that the same thing will happen in our country!  In any event, delegates in our National People’s Congress [China’s […] legislature] cannot cast dissenting votes, haha.” Another wrote, “I wish China’s government would shut down and let corrupt officials have a taste of it.”

I think these admittedly anecdotal reactions are simply a testament of the age-old, distinctly human problem of confusing society with state. The Chinese people themselves don’t have beef with the US or its people. The American people themselves don’t have beef with Beijing or its people. However, both governments are engaged in a power struggle, and as a result, people suffer. Perhaps the most heartening development can be found in this statement:

The growing connections between China and the United States mean that no issue is strictly domestic for either country.

While some no doubt view the growing interdependence of the two societies with unease, I cannot help but see a future of peace, prosperity and harmony. This does not mean I see an absence of conflict, but only that such conflict will be handled according to rules and procedures that have been laid down in the past and that can be altered so long as it is done so in a manner conducive to yet another round of rule-following and procedures.