By Denny Gulino
WASHINGTON (MaceNews) – As the Speaker of the U.S. House of Representatives enters 2023 as a greatly diminished figure, derided by late show comedians as “House Squeaker,” his humiliating path to leadership may be a bell which tolls for his peers in the U.S. political system as well.
Although many market participants tuned out Kevin McCarthy’s tortured journey to the speakership and those House members in the arena were consumed with partisan diatribes as the process crept along in 15 rounds of voting, something more telling than unadorned chaos seemed to be happening.
A long time coming, the episode marked the arrival of the velvet vice, squeezing policy makers into confronting existential challenges for the nation. There was no escape for McCarthy, whose hold on power now hangs by a thread, an arrangement institutionalized by the explicit and implicit bargains he was forced to accept.
The conventional narrative has been that McCarthy the person was weak, conflicted, compromised by his allegiance to Donald Trump, whom he thanked at his first opportunity, a scrum with reporters in the early hours of Saturday.
Outmaneuvered by similarly compromised personages like Rep. Matt Gaetz and Rep. Lauren Boebert, McCarthy was cornered into submission by his own ambition and a weak hand dealt him by past compromises.
Really? The mixed motives of his adversaries who were variously occupied with fund raising and performative antics were not the sum total of McCarthy’s challenge. For those who listened closely there were deeper themes at work shaping history.
There was the endless rationalizing of the intra-Republican combatants, to the often condescending and Schadenfreudian satisfaction expressed by many Democrats at the plight of Republicans denied their triumphalism.
There were also the background themes that found their way into the discourse that hinted at some monsters lurking in the shadows outside the House chambers. They were the outlines of the existential challenges whose presence can no longer be denied, that won’t yield to the distractions of culture wars any more than they are banished by good intentions and grand visions.
For market participants, whose circumscribed view of reality centered on the well-worn loop of ruminations about the coming recession, or the avoided recession, or the delayed recession, the circle of fear and hope has been its own distraction from grave reality.
In fact, shingles doesn’t care. That message in the TV commercial for SHINGRIX is the template for 2023 and beyond in America. A debilitating condition already latent in the system is waiting to erupt, regardless.
That’s regardless of how much you exercise, diet, argue about big government, condemn those imaginary 87,000 IRS agents, worry about border incursions from a Third World desperately hungry for a better life, fear or eagerly anticipate a rebirth of Trumpism, or carefully recycle or march against the depredation of the environment or press for decarbonization. Shingles, aka the inexorable crush of neglected threats, doesn’t care.
Let us count the ways, as many observers are counting the ways, of how neglected threats are closing in. There have been antidotes, vaccines, fortifications, alternative paths that have been available in the realm of public policy. There have been formulas for survival bandied about, as fanciful to be almost magical. Floating like wisps of smoke above that river of possibilities in which the nitty gritty of daily life swims, they’ve been given names that are understood to be euphemisms for “out of reach.”
“Structural reforms” that are hazy and unobtainable. “Political will” that somehow is never mobilized. “Global imbalances” that are always vaguely defined. Multinational declarations that are never executed even while being presented as the promises to future generations.
In America, that national legislature lumbers on, unable to begin to grapple with or even identify its own failings as a mechanism of adjustment. At least in Europe there’s lip service to the need, such as the never fully formed Directorate-General for Structural Reform Support. It has never risen to even a level of ineffectiveness, grown beyond a hope.
Within the towers of academia, within the halls of the IMF and World Bank, there is an air of despair. The World Bank’s one-time chief economist joked, “Structural reform is safe advice. No one knows what it means. If the economy grows: I told you so. If it stalls: You didn’t do structural reforms.”
In fact, from the United Nations to local school boards, institutions falter, and come to be expected to fail. The atmosphere of defeat becomes stifling. Globally, despite that financial crisis, despite the pandemic, debt keeps growing to now two and a half times as large as global GDP.
There are other forms of debt than on balance sheets. Half of the world’s population lives on less than $10 a day. Every baby born into impoverishment is a claim on the world of tomorrow.
The U.S. path of fiscal policy, always unsustainable, is leading to something beyond comprehension. On-budget government debt, off-budget commitments coupled with that always deficient “political will” and the depleting effect of low productivity growth leaves the American future mortgaged, if truth were to be told, apparently beyond repair.
Economic growth, which should be nurtured and husbanded as a precious elixir, is instead throttled down by central banks left as the last bulwarks against spiraling debasement promoted by the rest of governments. Inflation, another word for erosion, is seen as a condition to be controlled, rather than a symptom of something hurtling out of control.
Is a recession a sort of salvation? Is erosion of the economy, of future orientation, of productivity, the aspirational goal of a society? Is the risk of default a curative? Is the universe of possibilities diluting, so that progress gets harder to achieve, harder to visualize? These were the undercurrents undermining stability in the House of Representatives.
Intelligent people trying to articulate their dread and relying on proxy arguments to distract themselves while the walls close in. That’s what was happening in the House of Representatives. Promises, hopes, grand plans, grievances – real and artificial – no longer will substitute for hard decisions that no one wants to be forced to make.
Is it pessimism to see the clock is ticking? To see that In a very real way, much of the world is being marked to market? Is it a sort of Cassandra Syndrome to insulate ourselves against that knowledge? And so, fundamental values reassert themselves. Ways of life taken for granted are revealed to be unsupported ephemera.
Painful transitions can happen on their own. Or their sharp edges can be filed down with hard work. Perhaps the lesson of the tangled mess that is the U.S. House of Representatives is the lesson of the 21st century, with its crises, wars, pandemics and suffocating liabilities, that those transitions can no longer be postponed.
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Contact this reporter: denny@macenews.com
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