The Real Problem

At the present moment in historical time, the United States government, and both political parties, are seeking, with a kind of quiet desperation, ways to shore up the financial system of Wall Street, and with it the national and even the global economy. The bailouts, recent and contemplated, stagger the imagination in their scope. The problem? Overwhelming debt based on risky corporate decisions, compounded by an alphabet soup of derivatives, swaps, and other schemes that make Enron’s in-house deceptions look like children messing with play money. The government is now taking on responsibility for huge amounts of debt, and everyone is talking about how much of this is going to become a liability for the taxpayer.

It’s time to talk about the one issue that no one is mentioning.

The best leadership (and the worst) is always by example. The United States Government has set a terrible example, and the markets have followed: it has put itself in increasing levels of debt, with no plan in place to repay the creditors. The guiding fiscal philosophy articulated by Vice President Richard B. Cheney that “deficits don’t matter” has been applied by large institutions, and unfortunately by many smaller entities including households, to their own situations. It’s that simple.

Until we do the hard thing that was done in the waning years of the Bush I presidency, and come up with a bipartisan plan to balance the budget (even if it violates someone’s sacred “read my lips” pledge), and go further and return to the action of the Clinton administration (in cooperation with a Republican congress) by coming up with a workable and working plan to begin in the present tense the task of paying down the national debt, all we have done is kicked this ball further down the field, and the next thing you know it will be the U. S. Treasury that people will be talking about with comforting (?) words like “too big to fail.”

When the Bush II tax cuts were put in place, enough members of Congress recognized this fact that there had to be promises for some of those giveaways to the wealthiest among us (call it income redistribution) to expire beginning in 2010, or some of those who voted to thus eliminate the surplus (remember surpluses?) would never have signed on. Thus, any call to “make those tax cuts permanent” represents a deliberate breach of promise, and a betrayal of the trust of the American people, because no one can show how, with such an action, the debt will ever be repaid.

Until the United States gets its fiscal house in order, and enacts policies like we had in the 1990s, when there was prosperity, low interest rates, surplus budgets and no threat to Social Security in the process, global financial markets will be understandably and justifiably nervous. This is the reality that will face the next President of the United States, and the incoming Congress. Somebody is going to have to show some real spine.

Act Two, Scene Two

Or maybe it's just a staging of the same one-act play.

Scene one: Unsubstantiated rhetoric about a major Middle Eastern country secretly harboring weapons of mass destruction.

Scene two: The CIA presents findings to the White House that undermines this idea. The findings are rejected, and the rhetoric continues unabated.

Scene Three: Major media campaign in favor of doing something before it's too late.

Scene Four: Military action initiated. When it eventually turns out that there was no good reason for it, everyone blames the CIA for bad intelligence.

Next: Curtains (for hundreds, thousands, or hundreds of thousands of human beings).

Pelosi's Ploy

The talking heads today are all talking about what a big mistake Nancy Pelosi has made in backing Jack Murtha in his failed bid for majority leader, how she has divided her party and weakened her position as the incoming Speaker of the House.

What they are missing is the disarming effect this is going to have on a standard Republican weapon in any upcoming smear campaign. By going to the mat for a positon she has declared, even though the politics were against her, she has shown that she is willing to stand on principle (however misguided that may be perceived to be) without regard to political calculation. She is establishing a character trait for herself as the new Iron Lady, someone with enough backbone to stand toe-to-toe with George W. Bush. She’s no flip-flopper.

Since in the Republican lexicon, Democrat equals Liberal equals Wishy-washy with no spine, this early political move adroitly takes a lot of those talking points off the table. And it was done with little to no real political risk for the party, as the moderate candidate, Steny Hoyer (my Congressman, by the way), had almost no chance of losing and is experienced in working alongside Pelosi. Looking at his demeanor before and after the vote, one wonders if he was maybe in on this thing himself.

It will be interesting to see whether her decision to display a match for what some on the Left consider to be one of Bush’s worst character traits — his refusal to change position or admit he is wrong — ends up working in the Dem’s favor. But it’s a fascinating political move, the import of which has been missed by most observers.

A turning tide?

I retract my paranoid speculations, admit I was wrong, and rejoice at the resilience of the electoral system, for all its flaws, in America. Turns out that RoveCo has collided with the law of diminishing returns, and the sleeves turned out to be as short as the coattails. Our President’s absolute refusal to contemplate the possibility of a political defeat in the mid-term elections appears to have been cut from the same psychological cloth as his refusal to expect anything but military victory in Iraq. Chances are he has as much as of a plan for dealing with a Democratic house as he did for dealing with an occupied country: none. But I’m in a hopeful mood this morning, and I now fervently hope that in both categories the realities on the ground will educate him in the direction of doing something practical, more realistic, less grandiose, in response to (as Don Rumsfeld* might say) the situation he has, not the situation he doesn’t have.

*(whose resignation was in the works, even as I wrote those words)