Government Rating Sinks While the Heat Rises
Somebody once said that just because you’ve hit bottom doesn’t meant there isn’t a basement down below, and a cellar below that.
Now I’m wondering what’s below the cellar.
The Washington Post, in its weekly dubious award of who had the worst week in Washington, handed it to President Barack Obama, an obvious choice. I’ll give you another: we, the people.
I don’t think this political city has ever quite seen anything like the performance put on by the astigmatic, irresolute and way too resolute, panic-and-partisan stricken performance by all parties—the two political parties, the members of both the Senate and the House of Representatives, the administration and the media who read the political and economic tea leaves as if they were written in Chinese.
In short, have you ever witnessed a spectacle like the great 2011 hot-summer-in-the-city crisis over raising the debt ceiling?
The answer—if you discount a southern senator caning a northern senator during events leading up to the civil war—is no.
And boy, were there consequences.
It’s bad enough that this summer produced unprecedented heat waves, crops turning to dust in Texas and elsewhere starvation in Somalia, and rioting in London.
We now officially have a pretty much completely dysfunctional government, according to the financial agency Standard & Poor, which downgraded the U.S. in its list of risk-free borrowers from AAA to AA. If you’re a battery, that’s not so bad. If you’re supposedly the world’s most powerful country, that’s a financial embarrassment and possible disaster.
The S&P announcement, made after the stock market closed on Friday and after a big tumble in the Dow Jones, was made in spite of the fact that in its figures to determine the downgrade, the agency had made a $2 trillion mistake. You could argue that the S&P might have reconsidered, but the agency, like many politicians, lawyers, consultants, preachers and just plain folks, was not deterred by a little thing like facts. They made a political and policy judgment, prompted by the debt ceiling debacle and the behavior of everyone involved and while you can’t disagree with the observation about a “gulf between the political parties” and a lack of confidence in the government and elected officials being able to solve the country’s debt problems, the downgrading itself seemed arrogant and not a little reckless.
The raising of the debt ceiling used to be routine. Not this time. The newly elected Tea Party members of the house and senate made their no-prisoners, no-compromise policies about huge budget cuts in entitlement programs, no tax increases or changes, a part of the resolution of the debt ceiling issue.
President Obama and the Democrats have now continued to blame the GOP and the Tea-ists for the whole mess. You can blame them because they’re all a bunch of little Robespierres, burning the government down and locking the exit doors.
But Obama continued to believe that he could actually negotiate with Boehner, Cantor, McConnell and the gang of Teabags.
He acted like a man who was dealing with a group of outpatients from St. Elizabeth, among them people who believed they were Jesus, Napoleon, Stalin and Charlie Chaplin and says to them “Come to the White House and let us reason together. We’ll have some tea and scones.”
Every meeting, every phone call, or lack thereof, was scrutinized by the media for signs of wonder or resolution. They never came until the very end when both sides, the clock run down next to nothing—cobbled together a deal that everyone swallowed like it was a piece of coal and did not nothing to prevent recurrences or offer true long-range solutions. And don’t you even say the word “taxes,” you just hush now. When the downgrading, predicted by many economic experts, came, the results were devastating. The New York Times opined that the downgrading “carried few clear financial implications.”
How’s this for a clear financial implication—the Dow Jones dropped 635 points Monday, prompted by the downgrade, but also a continued debt problem in Europe.
Oddly enough, the only stock being bought up was U.S. Treasury bonds, which, even with the downgrade, seemed the safest bet around.
President Obama gave a speech mid-Monday, chiding the S&P, saying “we were still the United States of America,” trying to reassure the American people. Unfortunately, as he spoke, stocks were tanking on a scale not seen since 2008.
Come to think of it, he may yet get the worst title two weeks running.