The Morning After

The details are common knowledge by now so I won’t bother reprising them. Instead let’s look ahead.

The problem with the deal is that it achieved next to nothing. The fiscal cliff was a completely artificial construct created within the bowels of our gridlocked political system by politicians so incapable of reaching middle ground that they had to enter into a joint suicide pact in order to guarantee even having a discussion about our national budget.

Think about this. It is truly remarkable. Our politics is so toxic, so divided, and so prone to being held up by a small minority of committed extremists, that we had to be threatened with catastrophe before any sort of agreement could be hammered out.

Even then we failed to make much progress.

So what happened?

The deal itself is full of bits and pieces. Both sides get something, both sides lose something. So I think it’s better to look at the broader landscape after the deal and ask whether the strategic positioning and tactical advantages have shifted.

Not really.

• We are still stuck discussing a problem that doesn’t exist. The US does not have an immediate debt or deficit crisis. It has a growth crisis.
• The Democrats have ceded – finally – and made permanent the majority of the Bush tax cuts. This is terrible. It means that from here on out the focus of debt and deficit discussions will be on spending cuts not revenue increases.
• The Republicans simply retreated from a position they could not defend – the Bush tax cuts were an issue that the right could not wriggle around. The vast majority of voters think that raising taxes on the wealthy is a good idea. Holding the entire nation to ransom simply to defend the wealthy became untenable. So a tactical retreat was in order.  This is akin to shortening your frontline and logistical supply lines in war: a retreat that makes you stronger.
• The really big fight was never going to be about the fiscal cliff anyway. It was going to be centered on the debt ceiling. The US is peculiar in that Congress has to be involved in allowing the debt ceiling to rise. The Constitution has ways around this, but to invoke them involves starting up a new front in the war and risks stirring up even more bitterness.
• The government is still not properly funded. We have no budget worth a lick. Funding is being secured under the authority of a ‘continuing resolution’. This means that Congress is so broken that it cannot sign off on a budget. We are just muddling along.
• And then there’s the two month punt on those sequestered spending cuts. This means that sometime over the next two months we will be mired once more in brinkmanship and heated debate over what spending to cut.

Add all this together and I think we are still stuck in ideological trench warfare. The radical right is still strong enough to drive Washington into gridlock and to force appeasement from the White House and the Democrats.

Let me amplify this last point.

What we are living through is the logical conclusion of the four decade long rise of radical conservatism. This is a movement, not a party. Its members co-opted the old Republican party and drove it far rightward. Their agenda is distant from traditional Republicanism and has the tenor of religious fervor. It is almost Lenin-like in that its more zealous members are willing to inflict great damage on us all in order to get their way. This is not, therefore, a normal political dialog. Mistaking it for one is a massive error – one that both the media and the White House make regularly. We are dealing with true extremists not simply a bunch of ardent but essentially centrist conservatives. The biggest point to remember with regard to this is that there is no common ground. The two sides have radically different visions of what America is. Indeed, there are, in effect, two America’s colliding and competing for hegemony.

This is why Obama’s negotiating approach is so wrong. When faced with relentless extremism that last thing we ought to do is to negotiate. The extremists see each and every concession as a sign of weakness. It is like throwing them red meat. They are encouraged to ask for more. They are never satisfied.

The way to fight extremists is to confront them in their own language. It requires the adoption of the same relentless and dogged method. It means taking risks that normal negotiation would rule out. It means being Churchill not Chamberlain. Unfortunately Obama is more the latter than the former.

This is why I do not trust his promise to stand firm on the debt ceiling. He has never stood firm yet. I cringe as I wait for him to concede more territory.

Meanwhile the Republicans now have reached a watershed themselves.

Those four long decades of policy triumph are reaching a denouement. The GOP allowed itself to be co-opted by the zealots because they provided energy and financing. The odd coalition between plutocrats, libertarians, and social conservatives was fraught with long term contradictions that sooner or later it had to unravel. Perhaps that unraveling is now taking place. Last night’s vote was extraordinary in that the fabled solidarity of the right crumbled. Even the party’s leadership was split. Eric Cantor and Kevin McCarthy, numbers two and three in the GOP hierarchy, voted against the deal, whilst Speaker Boehner voted for it. Boehner’s act of voting was defiant: the Speaker usually doesn’t vote. It appears that Cantor, the leader of the extremists, is setting up a challenge to Boehner’s leadership. The years of right wing domination of our political discourse was founded on a legendary discipline. That discipline looks to have fractured. The GOP pragmatic wing, about one third of its House membership, is now visibly different from the Tea Party wing. What this means going forward is anyone’s guess. But the split will make policy making difficult.

Finally: no, the deal didn’t do much for the economy. We avoided the awful impact of a broad income tax increase and have postponed austerity style spending cuts.We also managed to hang on to a few socially beneficial programs. But we lost the stimulus effect of the payroll tax cut and so most taxpayers will experience a tax increase despite the gaudy headlines.

So no one won much. No one lost much.

The war continues. And the economy festers.

Plus ca change.