Keith Hennessey explains:
President Obama used the Gang of Six’s plan as an exit strategy. He backtracked on taxes, knowing this would force the Speaker to abandon negotiations, and knowing he could use the Republican Senators in the Gang to argue from a position of increased rhetorical strength in the ensuing debate. It’s a clever strategy but it belies the President’s public posture.
The media narrative about the president being the “only adult in the room” is now, and always was, nonsense.
[Update a while later]
The president tries to panic the markets.
Well, you have to admit, it’s one of his few talents.
[Update a couple minutes later]
A reminder, the problem isn’t the debt ceiling — it’s the debt, and the continuing unwillingness of Washington to take it seriously. The Democrats in particular insist on living in a fantasy world.
[Update a while later]
Per the above, some very worrisome thoughts:
Here’s the position I think we may be in. We’ve been negotiating with the President and The Democrats in Congress on the assumption that they’re sane. It’s okay to play hardball with these guys because eventually, whether they like it or not, reality insists upon itself and they have to cave. It’s a painful process so you expect some tantrum throwing and caterwauling, but eventually they HAVE to accept reality. Except if they’re not sane. If they want five apples and there’s only two plus two but they CAN’T ACCEPT that two plus two equals four. Orwell wasn’t just writing a parable about the eventual end point of IngSoc. He was describing what human psychology can drive Ministers to inflict upon the populace for the sake of “justice.” I’m worried they’ll pull the trigger on default as just one more “political” step in the march towards freedom from want or whatever other principle they’re operating under. They’re playing this game as if they could win, as if taxes in a downturn are a good idea with benign consequences. As if debt equivalent to GDP is survivable for the world’s anchor economy/currency, let alone sustainable.
And so maybe, just maybe, Republican strategy (what little there is of it) has badly misread the opposition. Obama tried to add 400 billion in taxes to a deal he had already agreed with Boehner at the last minute. Boehner walks out cause Obama is negotiating in bad faith and has been all along, but what if Obama is actually incapable of good faith negotiation? I think right now that it’s actually possible we won’t see a deal at all. Because the Republicans are looking at the math and at reality and saying “Okay, Democrat demands can’t be serious because they can’t possibly work” and Democrats are looking at politics and how it works and saying “We don’t have to give in cause that’s not how you win these things. You pin it on the other guy politically and then reap the political dividends.” I wasn’t around for the start of WW I, but I get the feeling I understand Kennedy’s fascination with Tuchman’s Guns of August. I’m not talking about a shooting war, but about leaders overestimating and underestimating and just plain misjudging each other in a brinksmanship scenario. In short, it could be too late to do anything when people finally wake up. The crisis may have already arrived with an economic and fiscal momentum all its own that no amount of dealing or compromise or statesmanship can stop.
They’ve been demonstrating economic lunacy for the past two and a half years (longer, really, but they didn’t have enough power to actually implement it), as things continue to deteriorate. Why would they stop now?