The raising of the debt ceiling was a remarkable and unusually
fraught moment in Washington. I was relieved when it was over,
because it could have turned out so badly. But in the end it was
the liberals who were furious, so something was gained. What
happened?
I wrote an article about this for September’s print
edition of The American Spectator (not yet available), but
it had to be submitted before the debt ceiling deadline (August 2).
So I didn’t know how it would be resolved. In other words I broke a
cardinal rule of writing for journals with long lead times: Don’t
try to cover breaking news.
Anyway, here are some more recent reflections.
Budget issues are always hazardous for
conservatives. Left-liberal politicians can at
such moments benefit enormously from their ongoing alliance with
the news media. And indeed throughout July the most influential
press organs covered the budget negotiations in a way that was
calculated to help President Obama. Press influence over Washington
policy is in general declining, thanks to the Internet’s
decentralizing influence and fragmentation of the news, but when it
come to the Federal budget the media still wield considerable
power. And it is always exerted in a particular way: to facilitate
the expansion of government power.
One problem is that most people just won’t read “budget”
articles because they are normally so boring. When “deficits” are
the issue, therefore, it’s easy for the press to confuse even the
most alert reader. Expansion of the government can be represented
as its contraction. Consider the phrase “deficit reduction.” What
does it mean? Something is being reduced? Actually, the phrase
should warn us that a tax increase is planned. Even more confusing
is “spending cut.” It sounds unambiguous. But it leads us into the
quicksand of “baseline” budgeting and five-year estimates. Don’t
believe a word you hear. Almost always a spending cut means a
spending increase. But it is an increase that may be reduced in the
out-years, when a new Congress has arrived in Washington (and can
easily rescind the acts of its predecessors).
Like good conjurors, the media embed these deceptions
right up front, in the headlines. On PBS television, it was always
the new statement by Obama that would come first. There he would be
on the TV screen saying that “everything is on the table” and that
he was “considering” spending cuts and entitlement reform and we
assuredly should “live within our means” because a “crisis” was
fast approaching.
All lies. What he meant was that Speaker Boehner should
agree to tax increases right away or incur the wrath of the
establishment. The mainstream media would play Obama’s comments
straight, without pointing out that the Democrats hadn’t so much as
passed a budget in two years or that Obama had failed to specify
any numbers. Comments lower down in such news stories would rapidly
become too confusing for those of us not actually employed by a
budget office to see the trickery involved.
The best way to respond to these deceptions was to heed
the long-time advice of Grover Norquist of Americans for Tax
Reform: Say no to all tax increases. The
Wall Street Journal published some excellent editorials.
And in the Washington Post, George Will and Charles
Krauthammer saw what was going on and alerted readers. When the
mainstream media erupted in fury against Congressman Eric Cantor of
Virginia one knew without reading any further that, in meetings
with Obama, he had held the line against tax increases. Both House
Speaker Boehner and Sen. Mitch McConnell of Kentucky did well, too,
and understood what was at stake.
One mistake the Obama-New York Times alliance
made was to over-emphasize the crisis that would ensue if the debt
ceiling were not raised. That meant that Obama could not easily
veto a bill if the ceiling was raised without tax increases as a
part of the deal. As George Will wrote (on August 3):
By accepting, as he had no choice but to do, Congress’s
resolution of the crisis, Obama annoyed liberals. They indict him
for apostasy from their one-word catechism, “More!” But egged on by
them, he talked himself into a corner. Having said that failure to
raise the debt ceiling would mean apocalypse, he could hardly say
failure to raise revenue would be worse.
The plan had been to use the “crisis” to get Republicans to
raise taxes. Then, if anyone asked why taxes had gone up, Obama
could point to the GOP. “Don’t blame me,” he
would be able to say, “blame my good friend John
Boehner.” The idea was to use the debt ceiling to
pressure the GOP into doing what they have lately balked at —
cooperate on taxes. In the past the Democrats have won with this
strategy so many times that they thought they could do so again.
Thanks to the Tea Party they failed.
A few analysts — you had to study the fine print to find
them — took a closer look at the specter of default and saw that
it had been exaggerated. The government would still have plenty of
new revenue coming in and could prioritize disbursements, using the
incoming taxes to pay off government bonds first. The yield on
ten-year Treasury bonds showed no sign of increasing even as the
debt ceiling outcome was uncertain. (As I write, if you lend money
to the government, the Treasury pays you a mere 2.6% in interest
over the next ten years for your pains and the failure of this
number to go much higher than that over the last month told you
that, while the politicians saw a crisis, the markets
didn’t.)
So the Tea Party said of the approaching crisis, “Bring it
on.” Realizing this, the Obama-NYT axis knew that their
plan would be defeated. Which raises another issue. Some Tea Party
members remained adamantly opposed to increasing the debt ceiling
at all. It would have been a risk to the GOP if they had done so,
and the media would have had a field day smearing the GOP for its
irresponsibility. But another possibility is that the “crisis”
bubble would have been immediately punctured. I guess we’ll never
know what would have happened.
The fury of the liberals was nowhere better on display
than in The New Yorker magazine, where one of its leading
editors, Hendrik Hertzberg, a man of the Left, wrote that Boehner
was a perpetrator (and arguably a victim) of “the terrifying debt
limit arson that his party, on fire with ideological fanaticism,
political ruthlessness and economic heedlessness, decided to spend
the summer fanning.”
Hertzberg looked back to the glory days of the GOP, in
1866, when someone called Benjamin Franklin Wade excited his
admiration for drafting the Fourteenth Amendment to the
Constitution (itself a source of damage to the nation). But
Hertzberg might have called to mind more recent GOP heroes,
including “Strange New Respect” Award winners Bob Dole, Bob Michel,
and Pete Peterson, who were usually only too eager to do the
media’s bidding.
The good news, and the real change, is that the GOP is no
longer the party of Rockefeller Republicans. Newt Gingrich put the
problem eloquently some years back, when he said that the GOP was
too eager to act as “tax collectors for the welfare state.” He had
Bob Dole in mind. If Gingrich is to be included in any compendium
of quotations, this one should be etched in stone. And if that GOP
era is now passed, then the fury of the Left is
understandable.
When a $900 billion stimulus package was enacted early in
Obama’s term, in 2009, the Democrats must have been quietly
reveling in the expectation that Republicans would now have to take
on their time-honored responsibility by agreeing to raise taxes
lest the “deficit” get out of control.
Lacking any such assurance in the future, the big spenders
will have to alter their strategy.
What exactly goes on in the minds of American liberals?
Their main problem is that they have not accepted that the world is
made in a way that laws and politics can only marginally change.
Communists made the same mistake. In fact, Liberals are the first
cousins of Communists, which is why in the Cold War American
liberals were so reluctant to criticize the Soviet Union. They saw
that it had been built on principles (godless egalitarianism) that
they themselves supported and promoted.
Modern-day American-style liberalism is an attempt to
install the same egalitarian system — with the significant
addition of democracy. In the end such a system must collapse, just
as the Soviet Union did. We can only hope that democracy will
come to our rescue before our system, too, collapses. The Tea
Party, a child of democracy, gives us reason to hope that a true
crisis can be averted.
