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A Remarkable Moment in Washington

If the liberals were so angry, something good must have happened.

By 8.5.11

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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.

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About the Author

Tom Bethell is a senior editor of The American Spectator and author of The Politically Incorrect Guide to Science, The Noblest Triumph: Property and Prosperity Through the Ages, and most recently Questioning Einstein: Is Relativity Necessary? (2009).