Surprise, surprise. America’s politicians have struck a last-minute deal to avoid default. The nation breathes a sigh of relief. Markets rally. White teeth are displayed before banks of microphones.
Get the feeling you’re being manipulated? Or that you’re watching TV?
The 2013 shutdown drama was months in the planning and writing and has played out pretty much to script.
Ted rode into town shooting the place up and took John and the Republicans hostage, demanding Barack give up Obamacare. John and the Republicans couldn’t pass the budget because they were locked in the ideological basement, so government starts shutting down. Barack holds firm, declaring he won’t negotiate with terrorists. Then the debt-ceiling nuclear bomb is armed. Starts ticking. Ohmigod! Will Harry and Mitch get there in time to save Washington/America/The World? The camera flashes between sweating brows of Barack, Harry, Mitch, John and the digital clock on the bomb. Harry, hands trembling, Mitch and Barack watching on, must decide which wire to cut. Is it the red one or the white one? The veins on his forehead stand out and, with seconds to spare, he decides: it’s the red. Snip. Phew.
Final scene: rueful laughs and backslapping as Ted is led off, gnashing his teeth.
The audience wanders out satisfied. Yes, they’ve seen it all before and they knew how the show would end, but each version has slightly different twists and the ending is a bit more desperate each time. The good guys prevailed and the bad guys made a point.
And that’s what the show is about: displays of ideological points. Roe vs Wade, the pro-abortion decision of the Supreme Court in 1972, began a long process of ideological polarisation in the United States that turned the South ardently Republican, from being a coalition of black Democrats and Roosevelt’s “New Deal” white Democrats, and turned northern states militantly pro-choice Democrat.
Split ticket voting at the 2012 election was the lowest in history; Americans are now more polarised into hard-core Republicans and Democrats than ever before. And healthcare has become the new Roe vs Wade, the totem around which the two tribes dance.
It has never been about economics, as it was during the 70s and 80s with Reaganomics and Thatcherism.
The economy has always been the innocent bystander in 40 years of ideological and class conflict that has been expressed, instead, through the War on Terror, financial deregulation, tax cuts for the wealthy and universal healthcare, among other things.
Five years ago negligent deregulation and fiscal imbalance resulted in financial collapse and recession. US interest rates hit zero in October 2008 and have stayed there for five years as the central bank attempted to repair the damage to the economy. When zero interest rates failed, money printing began in spurts and then became a permanent gush of $85 billion a month.
Still the economy stubbornly refuses to take off. Now this latest outbreak of ideological warfare has led to the biggest fall in consumer confidence since 2008 and has cut fourth-quarter GDP growth by 0.3 per cent each week, according to Standard & Poor’s.
Despite an astoundingly healthy corporate sector, US growth is likely to remain around 2 per cent next year, which won’t be enough to get unemployment down. The Fed will have to keep printing dollars through 2014 and loading up its balance sheet with debt.
The Fed has been fighting political vandalism for this whole period. A new report from economic forecasting firm, Macroeconomic Advisers estimates that the political uncertainty of the past four years has lowered economic growth by 0.3 per cent a year and raised the unemployment rate by 0.6 per cent, which translates to 900,000 jobs according to The New York Times.
In short, America is blazing away at its feet with automatic assault rifles. The theatre of factional politics has replaced administrative government and the world’s last superpower has become a beacon of how not to run a country, just as, in its own way, the Australian Labor Party has been a textbook example of poor governance over the past six years – as compellingly described yesterday in a speech by Nicola Roxon.
But the ALP doesn’t have a monopoly on destructive factional politics: as in many things, the US has taken it to a new level.
The bomb might have been diffused this time, but there’s not much doubt that Debt Ceiling VI - Revenge of the Cruz will be on our screens soon.