The Same But Different

Pundits for the Economist and the Daily Mail are worried America has because ungovernable because some Republicans have decided to impose line item budgets on president Obama in a revolt against his health care plan and debt increase program. The Economist characterizes the problem as breakdown in consensus.

Republicans are setting a precedent which, if followed, would make America ungovernable. Voters have seen fit to give their party control of one arm of government—the House of Representatives—while handing the Democrats the White House and the Senate. If a party with such a modest electoral mandate threatens to shut down government unless the other side repeals a law it does not like, apparently settled legislation will always be vulnerable to repeal by the minority. Washington will be permanently paralysed and America condemned to chronic uncertainty.

Max Hastings of the Daily Mail sees that breakdown as arising from a violation in a 2 out of 3 rule I've never heard of. "For centuries, the system has operated on the basis that societies acquiesce in majority poll verdicts."

But if anything the system is performing it was designed: to lock up when consensus breaks down. And consensus breaks down when you don't have three out of three agreeing that a Obama's hand beats Boehner's. Technically one out of three can slam on the brakes and nothing moves until the underlying impasse is resolved.

That underlying impasse, the Economist believes, is rooted in the emergence of the 'safe' partisan seat which allows 'extremist' politicians of either persuasion to avoid the 'sensible centrist' middle. "The problem is especially acute in the House, because many states let politicians draw their own electoral maps. Unsurprisingly, they tend to draw ultra-safe districts for themselves. This means that a typical congressman has no fear of losing a general election but is terrified of a primary challenge. Many therefore pander to extremists on their own side rather than forging sensible centrist deals with the other."

Yet neither the Economist nor Hastings are bold enough to take their own arguments to their logical conclusion: that if what they say is true then neither the Republican congressional leadership nor the president are wholly free to make a deal. Not in the context of the chasm that has opened up between the liberal and conservative political persuasions.

The negotiating gap reflects not individual political unreasonableness but differences on the ground that are now just too big to paper over. Like the spokesmen of polarized parties everywhere the current denizens of DC are constrained in what they can agree to.

What is unreal is that both sides -- if the rhetoric can be believed -- are ostensibly intent imposing a diktat upon the other. Thus Obama vows no deal. And Boehner, though he would fain succumb, finds himself unable to surrender with an energized conservative base breathing down his neck.

Yet clearly neither side has the power to impose itself on the other; for if they could they would have already. Nor could any such diktat stick. Even if president Obama could compel Boehner to run up the white flag it would last only as long as it would take for the Republican base to replace him. Doubtless the liberals are similarly situated.  Thus the equilibrium is standoff. It is making a "deal" which requires the application of external energy. And breaking the stalemate in favor of one side or the other will require strength that neither side may have.

The seizure is at one level the result of a system previously designed to produce a multi-attribute Pareto optimal solution suddenly forced into becoming a zero-sum game. The US political system is designed to resolve problems by horse trading, via buying factions off.  But the lack of money has made meaningful horse trading impossible.   The log rollers are still there; it's the logs that are missing. For years the solution to the shortfall has been to merely print more and more. Lately this works less and less.

As those who are now reeling in shock over their new Obamacare premium notices can testify, what used to be a horse trading system has now become exactly zero sum. To pay for the uninsurable you must overcharge the insurable. While in the past it was possible to square the circle from some indefinite stash, a la Detroit, that has become impossible of late. This hard fact makes any possible compromise unstable because it is not supported by any cash flow. The challenge confronting any "deal" the Republicans and Obama can strike is who will pay for it. In particular who will pay for Obamacare, which has been promised to the Democratic base? Who will pay for increases the debt limit, which have likewise been promised to the Democratic base?

The answer of course is "someone". But getting that someone to cough up will now be like pulling teeth.  The brief panic caused by the temporary malfunction of the EBT system showed, as little else could, how nobody is in the mood to give up anything anymore while nobody feels like paying for anything either. That is the cage in which Obama and the Republican leadership now find themselves trapped.

Sherlock Holmes famously said that "once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth."  And implies that the crisis will continue, whether over this or that makes no difference. It will continue for one simple reason: the money's run out. It is illusory to hope, as the Economist seems to, that Washington will soon return to the old normal. This -- crisis after crisis -- is the new normal. Too many checks have been written against too little funds to expect any other result. The consequences to America's foreign policy, the value of the dollar and the future of the Washington elite are incalculable, but it is unavoidable.

It's hard to predict how it will play out. Yet it seems safe to say that the new circumstances will alter the old rules of thumb; and that Washington either moves to a new equilibrium of similar structure but at lower rates of resource consumption or toward a highly skewed distribution of resources with favored factions frankly living at the expense of the others.

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The War of the Words for $3.99, Understanding the crisis of the early 21st century in terms of information corruption in the financial, security and political spheres

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