Ezra Klein thinks it's good that House Republicans are throwing a fit now, when the almost certain consequence is a government shutdown, rather than waiting until we're on the verge of a debt default. As evidence that this is good news, Klein brings in ... a guy from Goldman Sachs?
Moving the one-year delay of Obamacare ... maximizes the chances of a shutdown but makes a default at least somewhat less likely. If a shutdown begins Monday night, Republicans and Democrats will have more than two weeks to resolve it before hitting the debt ceiling.Yes, Phillips actually wrote that:
As Alec Phillips put it in a research note for Goldman Sachs, "If a shutdown is avoided, it is likely to be because congressional Republicans have opted to wait and push for policy concessions on the debt limit instead. By contrast, if a shutdown occurs, we would be surprised if congressional Republicans would want to risk another difficult situation only a couple of weeks later. The upshot is that while a shutdown would be unnecessarily disruptive, it might actually ease passage of a debt limit increase."
if a shutdown occurs, we would be surprised if congressional Republicans would want to risk another difficult situation only a couple of weeks later.What shred of evidence is there that crazy-caucus Republicans are ever motivated by an aversion to bad publicity and plummeting polls and other manifesttions of a "difficult situation"? As Ryan Lizza noted a few days ago, the craziest House Republicans live in overwhelmingly Republican districts, which means, given the nature of modern Fox-crazed Republican voters, that there's no chance whatsoever that the crazy caucusers be punished for any level of extremism. The craziest senators -- led by Ted Cruz and Mike Lee -- are also from overwhelmingly Republican states. What's to prevent them from just holding a gun to America's head all over again when we reach the debt limit? If anything, their crazy voters would be inclined to punish them for shying away from a second hostage crisis in a month.
Sorry, Ezra -- you're giving us pearls of wisdom from a Goldman analyst as if he's supposed to seem like an unimpeachable authority. I see the source of that prediction and think, This is a guy who's going to make gobs of money for the rest of his life no matter whether he's right or wrong. His company will make gobs of money forever whether it's right or wrong. So, no, this doesn't impress me.
Klein goes on to write:
One way a shutdown makes the passage of a debt limit increase easier is that it can persuade outside actors to come off the sidelines and begin pressuring the Republican Party to cut a deal. One problem in the politics of the fiscal fight so far is that business leaders, Wall Street, voters and even many pundits have been assuming that Republicans and Democrats will argue and carp and complain but work all this out before the government closes down or defaults. A shutdown will prove that comforting notion wrong, and those groups will begin exerting real political pressure to force a resolution before a default happens.That makes no sense. Klein's "comforting" scenario is a situation in which Republicans would be saying they were avoiding a shutdown so they could concentrate on a debt limit hostage crisis. They would be shouting from the housetops, We didn't blow up the government now because we've planted explosives under the global economy, set to go off a couple of weeks from now. Why would corporate CEOs find that comforting, or lulling? And even if they thought it was just a bluff, as the debt deadline approached, wouldn't they rally and apply plenty of pressure even if they had been lulled? They're corporate CEOs, for crissake. They're used to getting what they want from government.
The business community will step in no matter what, whether or not there's a shutdown crisis first. This intervention will be forceful. The question is whether it will work -- crazy caucus Republicans are so crazy they may not respond even to our Galtian overlords. But that won't depend on whether there's a warning shot in the form of a shutdown crisis.