It’s not intuitive, but the 2013 debt ceiling crisis is scarier than the 2011 crisis.
That seems odd, because 2011 crisis was characterised by months of tense negotiations, a dug-in Tea-infused GOP, an economy that was much more brittle, a debt downgrade, and a market crash.
This year, the stock market has barely been paying attention. Mostly investors are convinced that there will be a deal, and nobody wants to be out of stocks for even one day, lest they miss the “deal” and subsequent rally. Unlike in 2013, when the debt ceiling was on everyone’s radar for months, this year, things have only come into view with days to go until the drop-dead date.
But 2013 is scarier for what it says about the whole system.
In 2011, the crisis could be chalked up to the times. We were still (basically) in the middle of a big depression. The deficit was soaring. And there was a “wave” election for the GOP (the 2010 midterms) the likes of which rarely comes a long.
So it was not surprising that all these trends resulted in a major governance crisis.
But 2013 doesn’t have these excuses. The economy is getting better (though yes, it’s still disappointing). The GOP fared very poorly in the last election. And the deficit is shrinking fast.
And yet: things aren’t going any better on the debt ceiling front.
So what we know now is that we can’t attribute the events of 2011 to some one-off fluke that was the result of bad times. This is how politics is now.
One party takes the maximalist position, and then decides its going to take the country hostage as its prime negotiating tactic. There’s no reason to think, if a “deal” is struck this time, that this won’t happen again in 2014, 2015, and every other time the debt ceiling comes up.
A big factor in this is the collapse in the traditional GOP organising structure.
Columnist Tim Carney has written some great stuff lately explaining how the old Republican power and money has been replaced by Tea Party power and Tea Party money, effectively neutering the GOP leadership that The White House is theoretically supposed to deal with.
There are no longer two distinct parties (which can deal with each other). One party really doesn’t have a driver, and that doesn’t seem likely to change.
Business Insider Emails & Alerts
Site highlights each day to your inbox.