In Shutdown Threat, A Lifelong Hustle Continues

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.


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32 thoughts on “In Shutdown Threat, A Lifelong Hustle Continues

  1. Great analysis Mr H. The Repubs definitely need to move on, turn the page and get beyond Trmp. The way the primaries are structured however, may unfortunately prevent Repubs from getting past this mess.

  2. Wholeheartedly agree. Trump is absolutely a poison and it speaks volumes that he’s even being considered.

    That said, I can no longer ignore how the left is also devolving, only from the other end of the spectrum. MSNBC has become almost as bad as Fox with the half truths and misrepresentation. It seems like it went into in overdrive during covid origin, where there was a huge failure of journalism, and they just kept the playbook active in a manner reminiscent of Fox. Can we really blame the uneducated for no longer trusting the media? Immigration, constant race baiting campaigns bordering on scams, DEI initiatives, and defending gender ideology in primary schools are just a few examples.

    I honestly don’t know where we go from here, but I don’t blame people for shunning Dems. I think they need a reality check, which is exactly what they’re getting. I just hope they wise up enough before elections.

    1. Whataboutism won’t stop a dictator from hijacking a democracy.
      “Almost as bad as Fox” would probably take losing (ok “settling”) a billion dollar law suit to be an accurate comparison.
      The spoiled left are complaining about pronouns, the spoiled right admire Putin and want to violently overthrow the elected US government. What reality check?

      1. I gave several examples of messed up things the extreme left is doing. Simply boiling it down to “complaining about pronouns” is completely dishonest and exactly what I’m talking about. The fact that you have a dozen brain dead morons on the right is not an excuse; that sounds a lot like whataboutism, sir.

        1. Also, there are some actors on the extreme left openly calling for end of capitalism, degrowth, and communist policies. So that kind of mentality is not just limited to the right. Please stop minimizing what is happening right now.

        2. I know you mean well, but comparing any news outlet to Fox is inaccurate. I’d suggest spending — I don’t know, a week or so — reading about the origins of Fox, how it evolved and so on. I’d also suggest a trip to the studios sometime. I went. Twice, in 2014. With guests who were brought on to speak about markets. It’s… well, I’m not sure what the right words are to describe it, actually. “Quite something,” maybe. Also, it’s not “a dozen.” America has an existential problem on its hands. As noted, it’s spiraling towards some manner of oblivion, and Fox is, in my opinion, one of the proximate causes. Finally, diversity, equity and inclusion are good things. Unequivocally. You and me (and everyone else here) could’ve been born into adverse circumstances such that a lack of diversity, equity and inclusion made it impossible for us to live a fulfilling life. Life is a lottery. Rerun history a million times and the overwhelming odds are that you won’t be born at all. On the (infinitesimal) chance you are born in one of the reruns, there’s a very good chance it’ll be to dire circumstances that make it impossible for you to get ahead. So, when you think about the idea of government-imposed measures aimed at leveling the playing field, think about that: In every, single other iteration of reality, you’re either not born or born to worse circumstances than the ones you enjoy now. This reality (ours) is pure chance and pure coincidence, which makes my success, your success and everyone’s success reading this a complete chance occurrence with almost no role whatsoever for “merit” or “hard work.” “There but for the grace of God,” my friend. “There but for the grace of God.”

          1. H – if you reject transition as being too slow and unrealistic given the political constraints we face, how can you believe that degrowth is not even more improbable? Let alone if it was to be implemented fairly, via collective will i.e. via an equalisation of lifestyles across the planet to a hopefully reasonably happy median?

            For my money, if we fail at transitioning fast enough (and I am not sure I agree with that given the progress made by solar in terms of getting cheaper), I think we’ll do geoengineering. It’s not complicated and relatively cheap, though it could be dangerous.

            Someone was recently pointing out that Western countries are paralyzed by a “don’t play God” taboo due to our christian background but Chinese have no such qualms and would happily implement geoengineering if they thought it was in their interest. Interesting pov, imho.

          2. I didn’t say it would work or that anybody’s going to try to implement it. The species is doomed. There’s no workable solution. It is, for all intents and purposes, over. As usual, I have to be the objective bearer of bad news: If you’re having kids right now (not “you” fred, just “you” in the general sense of the word), and you think they’re likely to live to be, say, 80, there’s a non-trivial chance you’re wittingly condemning children you didn’t have to have to a fate worse than death: They may witness the actual apocalypse courtesy of climate catastrophes. Here’s what’s (probably) going to happen: There will be Biblical droughts and famine in poor nations, leading to mass migrations so large that no walls, or guns or tanks can stop them. Politics will break down, societies will dissolve and within 100 years or so of that, there won’t be much left. The point is: I argue all of these talking points around policies and politics and macro, and I editorialize all day around markets and such because it gives me some sense of fulfillment, but the truth is that all of this is largely irrelevant. We’ve got 150 years left. 200 if we’re lucky. Nothing can stop it now. It’s too late. Having kids is a terrible mistake at this point in our species’ historical arc, and more narrowly, the pursuit of money (which, let’s face it, is why the vast majority of people subscribe to this site — to get insight into how Wall Street works and how other people make money) is a road to nowhere. Money is a fabrication and the more you make in the digital era what you discover is that it all ends up feeling like numbers on a screen, which is apt because that’s all it is. One of the most sickening feelings I’ve ever had was pulling out of a car dealership with a new luxury vehicle and being tired of it by the time I got to the second stop light. It really is all meaningless. I promise it is. I’m also very sorry about that. Not really, though. It is what it is.

          3. H, I agree with the premise. We should level the playing field. It’s the implementation I’m talking about. You’ve been out of the corporate world for awhile but if you were subject to the same DEI weekly seminars as I, you would also be freaked out. It is not coming from a place of “let’s call out discrimination when we see it”, it is “everything is discrimination that we need to address, even if minorities and women make up 50% of the workforce already”. The ideas and concepts are sound but the implementation and what these GenZ kids are being taught are totally out of whack with reality and quickly becoming unproductive. That is my real concern, that we veer so far in either direction that I fear how far it will go – and that is not limited to the right. Maybe the Fox comparison was extreme, but I reject the idea that a criticism is invalid merely because it originates from the right. I am not at all aligned with those whack jobs but I will listen to well reasoned arguments, in the rare moments they make them.

          4. Times are changin’, my man, you gotta see it and adapt. This sounds — I don’t know, dreary I guess — but when I go out for dinner here in the city, I don’t entertain anything that even sounds like small talk. My concern is simple: The risk of saying the wrong thing is very, very high in the current social climate, particularly if you’re a privileged white male speaking to women, minorities or other historically oppressed/repressed demographics. I acknowledge and respect the trend. So, I don’t talk. If I were in a corporate setting, my mentality would be this: “Ok, well, this is how it is now. Maybe it’s counterproductive, maybe it isn’t, but I don’t care because i) there’s nothing I can do about it, ii) our bottom line (in a financial sense) is someone else’s problem, so if our DEI policies are hurting profitability, nobody can blame me, and most importantly, iii) I’m here to get a paycheck, nothing more, nothing less — so, as Winston Zeddemore famously put it, when asked whether he believed “in UFOs, astral projections, mental telepathy, ESP, clairvoyance, spirit photography, telekinetic movement, full trance mediums, the Loch Ness monster and the theory of Atlantis,” “Ah, if there’s a steady paycheck in it, I’ll believe anything you say.” I recommend to you following the Winston Zeddemore approach: As long as the direct deposits are showing up on time and the health insurance premiums are getting paid, “I’ll DEI anything you want.” 🙂

        3. I don’t want to pile on you when our host is already pointing out he doesn’t agree with your take. But I would like, with my nicest personality on, point out that the only thing of consequence you mentioned was immigration.

          Everything else is small potatoes, even if I fully agreed with you and summarising it as “caring about pronouns” is glib and witty but not inaccurate.

          So, yeah, we’re down to criticizing the Dems for not handling immigration/a refugee crisis better. Personally, I doubt the Republicans will do better but maybe I’m wrong…

          1. A few leading GOP challengers to Trump have already floated proposals. DeSantis called for “shoot to kill” border enforcement. There are also GOP the proposals to send US troops into Northern Mexico to battle the drug cartels and “seal the border.”

          2. Importantly: It’s not that I “don’t agree” with the commenter above. It’s that it’s not a debate. I’m just stating facts. Fox is what Fox is. If you don’t know what Fox is, then you don’t get it. If you’re comparing Fox to other networks, then you don’t understand Fox. That’s not a criticism of someone anymore than it’d be a criticism for me to tell someone comparing a rock to a tree that a rock isn’t a tree. It’s the same thing with Trump. I don’t have anything against con artists personally. Not all cons are illegal. It’s not illegal to con people into voting for you for president. Every president is a con artist to a certain extent. I couldn’t see myself being a con artist, but not because I’m morally opposed to it, just because that’s not how my mind works. I couldn’t see myself being a dentist either. It’s just not something I’m interested in. But Trump is a con artist just as sure as my dentist is a dentist. Again: It’s not a criticism of Trump — well, it is, but the point is that when it comes from me, it needn’t be. It’s just a statement of fact.

          3. H – Fair enough. You might remember than when you were focusing on the damage social media was doing to our discourse, I was constantly replying “Fox is the bigger evil by far”. So I’m with you on that one, 100%

          4. Derek – I guess shoot to kill might work? OTOH, it seems politically… err… not great? I doubt a majority of Americans are that cold hearted…

        4. Anon, I hesitate to enter this conversation because, generally, I get reprimanded. However, I will say this regardless: my biggest problem with the far left is that they do not uphold the rule of law (see Chicago, San Francisco etc.).
          Without rule of law and property rights, we are not any better than China and not upholding rule of law is a slippery slope. I just finished reading that the current mayor of Chicago is upset that private grocery stores have closed in the south and SW areas of the city and so he is considering opening government run food stores. If people were stealing from private businesses, I am guessing they would also steal from government run businesses. How about not allowing stealing to occur to solve this problem?

          I don’t like the far right/Trump either.

          Therefore, I am just trying to steer my life away from everything I don’t like. Which means I am spending a lot less time in the big cities I used to love to visit.

          1. Gosh, I wonder what might prompt people to steal food or disregard the system more generally. These things are so mysterious. If you didn’t know any better, you’d almost be inclined to think entire ethnic minorities are systematically oppressed and, fed up and lacking equality of opportunity, have decided that instead of waiting around on a broken system to give them a chance, they’ll just take what they need (or even what they want) instead.

            The saving grace with you is that by now, I’m convinced you’re a good person. Good for you. Seriously. There aren’t many good people out there. I’m also thoroughly convinced that you genuinely believe America is, at least in part, a meritocracy and that generally speaking, most people who try hard enough can succeed. That’s quaint. And also wrong.

            I obviously don’t know your background, but I do know you’re not a 15-year-old African American male who was born and raised in the projects in Chicago. If you were, you’d probably see things a little differently.

            It’s astounding that we pass judgement on kids (kids) in low-income communities in major cities, born into drug wars and gang culture. As if we know what that’s like. What right do we have to speak on that? It’s like saying kids in Somalia who kill at the behest of the local warlord are bad people. What kind of sense does that make?

            Take the exact same genetic being, have them grow up in a $1.5 million house in the suburbs to a family with connections at an Ivy League school, and guess what? Your “thieving” Chicago gang member or your “murderous” African child solider is suddenly a Yale law student.

            Surprise! It’s all about what opportunities you have and your initial starting conditions.

          2. H – one thing I wanted to try with people of a more conservative/”the world is more or less just” persuasion…

            Do they know that, historically, poor white people used to be thieves and “bad people”? You can watch (or read) Gangs of New York for a sense of how brutal brutalised people can be. In 19C London, 20% of the women were prostitutes…


            And Victorians/19C New Yorkers weren’t shy about law and order and dishing out punishment. It might have kept the neighbourhood of the bourgeois safe. But little else was achieved, certainly not the moral education of the poor masses.

            Two things changed that around and gave us our modern world. Trade unions and John Maynard Keynes.

  3. If we allow Trump to be elected again, the memory of those poor children crying in an overcrowded open air prison will seem like day care compared to what his administration will do. You all need to stop watching propaganda, the laundry list of horrible crap this man did when he wasn’t fully enabled is enough to say no. He is without a doubt the worst president in the history of the United States and we unfortunately have a lot of contenders.

  4. On your entire comment above, “…We’ve got 150 years left. 200 if we are lucky. Nothing can stop it now. It’s too late. Having kids at this point is a terrible mistake at this point in our species historical arc…”.

    Thank you for saying it out loud.
    The cognitive disonance of living in this world where everyone is behaving like everything is normal, while knowing our pathetic tattered little canoe is gathering speed as it heads towards Niagara Falls, makes me nuts sometimes. Takes all kinds of mental tricks to ignore the increasingly deafening roar.

    Only difference is I think it will be in our lifetime. It’s not just droughts and floods that are problematic. Eratic unpredictable weather, hot when it should be cold, wet when it should be dry, and vice versa, also makes growing food impossible.

    Did you know that in tropical forests, photosyntesis shuts down at temperatures over 46.7 degrees C (116 F)?

  5. I may be biased as I have young kids, but it’s hard to imagine humanity experiencing conditions worse than what occurred in the 20th century. Yes, climate change is a massive problem that will have untold consequences, but humanity will adapt like it always has. It won’t always be pretty and a lot of people will (or already have) experience horrible things, but I’d be shocked if we see wide-spread societal breakdown. Regional breakdown and isolationism? Sure, but rich countries will continue to protect their own interests.

    As for the political situation, I hope Biden wises up and pushes Kamala to become Attorney General and selects a more effective VP. Fair or not, she is a huge political liability given Biden’s age. That being said, the NYT had an interesting analysis showing that Democrats are reversing the electoral college advantage that Republicans previously held. The hypothesis in the NYT analysis was that Trump is largely tied with Biden in national polling due to shifts in heavily blue states like California and New York because of the issues with crime and poverty in those states whereas voters in battleground states that have subjected themselves to far right state governments (think Wisconsin) have seen the reverse. Abortion is the ace in the hole for Democrats in battleground states as people actually at risk of losing rights tend to be much more likely to vote even if they aren’t excited about Biden. That is bearing out in special elections.

    I also think Republicans will fracture once Trump is gone. By 2030, his supporters will still have a regional influence, but I’d bet their ability to influence national elections will fall apart. Barring Joe Biden’s passing and Kamala being anointed as his successor, I don’t see a path to Trump regaining the presidency.

    One other thought: I wonder if any “moderate” Republican would consider working a deal with Democrats to become speaker. It’d be nice if there were a few more anti-Trump house members still out there willing to cut deals with Democrats in order to keep the crazies in check, but I suppose that’d be political suicide for whoever cut that deal.

  6. I chuckled at the term “early-onset fascism” and agree that it’s too late. I think it might have been too late back when Reagan cynically tore down Jimmy Carter’s solar panels, because God forbid this country try to get by with less. To think conservation and preservation used to be real strengths of this country … now it’s just freedom and more stuff.

    Anyway, I doubt our early-onset fascism is going to play nicely with our fast-acting climate change. Sprinkle liberally with food insecurity and fentanyl and, well, nice republic while we had it.

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