House Republicans, where that means Kevin McCarthy’s far-right flank, are angling for a government shutdown. Maybe you’ve heard.
Until now, I eschewed the temptation to comment on the latest episode in the sad soap opera that is America’s spiral towards a fractious, ungovernable abyss.
I used to weigh in at regular intervals on the subject, but to my dismay, I discovered that many readers are determined to suspend disbelief to avoid coming to terms with the uncomfortable reality of the Donald Trump era in American politics. That’d be entirely forgivable if I thought my readership was comprised mainly of blue collar Americans, descendants of yesteryear’s factory workers, victims of the opioid epidemic or, relatedly, left-behind Appalachians. But that simply isn’t the case.
Where Trump supporters and my readership overlap is at the intersection of counter-narrative, misplaced libertarianism and Wall Street. It’s a strange spaghetti junction — people with a vested interest in preserving the current system which benefits them disproportionately, advocating vociferously to overturn it, seemingly for the sheer hell of it.
Trump isn’t in the Oval Office for this prospective shutdown, but his legacy lives on in Congress. The shutdown threat emanates entirely from the most extreme elements within the Republican party. This is the same contingent which bedeviled McCarthy’s speakership vote in January and threatened to push the US into a technical default in June. As The New York Times put it, “The right-wing rebels have styled themselves in the mold of former President Trump, who made norm-shattering behavior a virtue among the Republican base and an asset for many lawmakers, who now fear primary elections much more than general ones.”
Last week, Trump demanded Republicans shut down the government as a way of defunding various criminal proceedings against him. “Republicans in Congress can and must defund all aspects of Crooked Joe Biden’s weaponized Government” he declared, on Truth Social (which is one or two Musk managerial missteps away from being a better social media platform than the dilapidated husk of Twitter). “This is… the last chance to defund these political prosecutions against me and other Patriots,” Trump added.
This is all quite obviously insane. A four-times-indicted former US president is openly calling for the GOP to shut down the government so that legal proceedings associated in part with his efforts to remain in power by way of an alleged criminal conspiracy (which preceded a violent riot at the Capitol), can’t move forward. This man is effectively running as an incumbent on the Republican ticket for the next presidential election. It’s entirely possible he’ll win the White House again and subsequently pardon himself. Should he be convicted in a state case for which he can’t self-pardon, it seems likely he’ll lean on his allies in Congress to “Do something!” as he’s fond of putting it. What that “something” might be isn’t yet clear, but whatever it might be won’t be democratic, with a small “d.”
And to think: Market participants summarily ignored what I’d suggest was an oblique reference to Trump and his acolytes in Fitch’s US debt downgrade over the summer, in favor of obsessing over the ratings agency’s boilerplate fiscal fretting.
Unfortunately, investors aren’t going to realize this until it’s too late, but what matters more for America’s creditworthiness is the “erosion of governance,” as Fitch put it, not the deficit or how many interest-bearing dollars (i.e., Treasurys) are “outstanding.” (In the interest of accuracy, I should note that Fitch was mostly following in the footsteps of S&P, with a 12-year delay, and it’s fair to suggest the ratings agencies are concerned more with the increasingly fraught political wrangling around debt ceiling deadlines than with any specific US president or Congress. However, Fitch specifically mentioned the contested election in May, while warning that a US downgrade was possible.)
It’s difficult to overstate how concerning this must be to the rest of the world. To reiterate: The former (and possibly future) President of the United States is encouraging beholden lawmakers to force a government shutdown explicitly for the purposes of forestalling investigations into his conduct, including what federal prosecutors allege was a scheme to defraud voters in a presidential election. In a shutdown, active-duty military and air traffic controllers would work without pay. FEMA’s capacity to respond to (proliferating) natural disasters could be limited. SBA would be unable to process new small business loan applications. The FDA might have to delay food inspections. And on and on.
Yes, those talking points are pulled from a White House press release. And yes, the White House obviously has every incentive to make the optics as bad for Republicans as possible. But the consequences of this for everyday people are real. People need their paychecks. It’s one thing (a bad thing, in my view, but opinions vary) to suggest a shutdown is worth it to close the border. It’s another thing entirely to suggest a shutdown is worth it to delay, for a month, legal proceedings against one man. Forget whether he’s guilty or innocent. The selfishness inherent in that proposition is beyond the pale, and underscores the sheer blatant absurdity of the narrative that says Trump is a man of the people. This is a president who would have you go without a paycheck if it means an investigation into him is delayed for a few weeks.
There are various arguments for a higher term premium (the compensation investors demand for lending over longer time periods compared to what they could obtain for simply rolling shorter-term debt). The best one is the one nobody makes. America has moved beyond institutional decay. The country is now exhibiting early-onset fascism.
As many observers pointed out earlier this year, in the lead up to the debt ceiling standoff, this isn’t your typical, run-of-the-mill, partisan charade. McCarthy gave the patients the keys to the asylum, and they don’t understand that “burn it all down” is supposed to be a figure of speech. McCarthy last week despaired that, “This is a whole new concept of individuals that just want to burn the whole place down.” Kevin has a short memory. It’s not a new concept. “Individuals” tried to burn the whole place down on January 6, 2021. Hours later, other “individuals” voted in sympathy with the arsonists even after witnessing the arson. One of those individuals was McCarthy.
When someone presents to you irrefutable evidence of a fraud perpetrated upon you, and that evidence plainly shows you were duped, you have two options. One is to acknowledge reality, come to terms with your own gullibility and treat it as a lesson. I’ve done that many times in my life. It’s never easy to concede you’ve been conned, but you have to concede it. The other option is to live a lie in perpetuity. If you’re still a Trump supporter, you’ve chosen the second option.
To be clear, some parts of the Trumpian narrative are true. The middle-class is disappearing. Globalization is to blame for the decline of American manufacturing. The country’s political elites do regularly conspire against the interests of regular people and the country when it’s beneficial to them. I could go on. However, Trump isn’t the savior. He is, in my opinion, a charlatan whose entire adult life has been characterized by some observers as one long grift. Through that lens, selling lies to righteously disaffected, genuinely downtrodden Americans who’ve lost hope would be just another in a never-ending series of hustles.
And here’s the thing: If you’re not among the righteously disaffected and the genuinely downtrodden in America and you’re still supporting the former president (and his allies in Congress), guess what? Some people might view you as complicit in the hustle. If Trump returns to the White House and it all goes horribly wrong (which it will), those disaffected and downtrodden Americans will be looking for someone to blame once it becomes impossible to suspend disbelief anymore. At that point, you’ll want to stay away from discount stores, county fairs and stock car races.