I do not tend to follow micro-politics (who’s up, whose down, what the latest rumor is about this or that, how the polls vary from day to day) carefully because doing so not only consumes all your time but it prevents you from seeing the more important big picture. I prefer to focus on macro-politics, politics on the large scale and longer time frames. However, there are times when macro-political theories impact micro-political events and the debt-ceiling debate is one such case.
I have been writing about how the US is run by an oligarchy that is fronted by the Democratic and Republican parties. The issues that the oligarchy is united on (ones that financially benefit themselves) are agreed upon by the two parties and usually take place so quietly and behind the scenes that we are not even aware of it (much of the legislation passed by Congress and the regulations implementing them by the committees is of this form) or when it cannot be avoided becoming public (as was the case of the massive bailouts of the financial sector in 2008) is done with a grand show of bipartisanship and rushed through as matters of supposedly extreme urgency that gives the rest of us no time to participate in the process at all, let alone mount a protest.
The debt ceiling debate is another case where the oligarchy has been forced to emerge from the shadows and try to more overtly influence events.
So who makes up the oligarchy and how does it make its wishes known? The oligarchy is not a hierarchy or secretive cabal that issues orders. Such a crude system cannot be effective for long. It is a loose alliance of the top people in the business, financial, and media sectors, all of whom all share the same goal of enriching themselves at the expense of the general public. This tends to create a uniformity in general thinking, though it can differ in details. These people tend to move around in the same circles as top government officials so a lot of the oligarchy’s wishes are communicated informally. The rapidly revolving door by which top government and business officials switch roles is another mechanism to ensure uniformity in thinking. The oligarchy’s lobbyists, who pretty much have taken up residence in the halls of government and contribute heavily to congressional and presidential campaigns, also exert constant pressure to ensure that politicians know what they should do.
The major media (which is also owned by the oligarchy) also contributes when it interviews business leaders and selected intellectuals and reports their opinions which can then reach a wider audience. A lot of so-called ‘think tanks’ (The Heritage Foundation, The American Enterprise Institute, etc.) are also created and funded by the oligarchy, along with prominent university academics who are sympathetic to oligarchic interests (see the great documentary Inside Job for examples of the latter). The chair of the Federal Reserve and the Treasury Secretary can always be relied upon to be reliable spokespersons for the oligarchy since they almost always have close ties with them and often emerge from their ranks and go back to them when their terms of office are over.
This is how an informal consensus becomes created about what the ‘best’ course of action (i.e., what benefits the oligarchy) is for any given situation and those who are outside this consensus can then be dismissed as radicals and extremists and ‘shrill‘.
When it comes to the debt ceiling, I wrote the following back in November of last year:
Despite Republican rhetoric about opposing the rising national debt, the oligarchy needs the government spigots to be kept open and so I predict the Republican Party will agree to raise the debt ceiling, all the while hypocritically wailing and gnashing their teeth at what a bad thing it is. It will be interesting to see how well their supporters respond to such a blatant betrayal of what they were promised.
It has indeed been interesting to see how this is being played out in the current debt ceiling debate. I did not pay too much attention to the day-to-day drama of the talks between Obama and the Republicans or worry about the US defaulting on its debt because I felt that the oligarchy was united in wanting the debt ceiling raised and thus it would happen. This is because a default would trigger a lowering of the US’s debt rating which would require it to pay higher interest rates on the money the government borrows which in turn would raise interest rates all round. Since it is a fairly good rule of thumb that interest rates are inversely correlated with stock prices, and the oligarchy is devoted to keeping stock prices high, I felt it was a no brainer that they would push for passage of a debt ceiling increase to prevent a steep stock market decline.
It looks like that is what is mostly happening. The stock market has not panicked yet (in fact, it rose somewhat the last week) and the yield on US Treasury bonds (a key predictor of interest rates) has remained pretty much stable for the month of July.
However, it has also become clear that some vocal elements of the Republican party (such as the Tea Party caucus) are not as yet quite adept at picking up the subtle cues that tell them what they must do and who the real bosses of the country are, and are balking even when those cues are translated for them by their party leaders in more direct terms. They seem to be true believers of the idea that raising the debt ceiling is a horrendous evil and not merely a fairly routine procedure that was made into a marquee issue simply to win votes in the 2010 elections.
Given this high level of obtuseness on the part of the Tea Party, the oligarchy has to be more direct in conveying its message and it is interesting to observe it coming out in the open and start cracking the whip.
Next: How the oligarchy speaks