The political theater that is US politics is unfolding in ways that should be drearily familiar by now.

Once again, Obama and the Democratic leadership have ‘reluctantly’ and with ‘great regret’ been ‘forced’ to give up every thing they say they value because those nasty Republicans and their Tea Party caucus threatened to bring the country to ruin. They had to ‘compromise’ on what they really, really wanted to do (raise taxes on the rich and close tax loopholes) in order to ‘save the nation’.

Right.

The next phase of the drama is for the Villagers and the Very Serious People to hail this ‘bipartisan compromise’ deal that averted a supposed catastrophe. Those liberals and other Democratic supporters who are critical of the terms of the deal will either express amazement that their party’s leaders are such rotten negotiators (see Robert Reich and Paul Krugman) or urge everyone to rally round the party because the alternatives are so much worse. All the Democratic party needs to do is to raise the specter of Michele Bachmann in order to get their frightened base to fall in line and support whatever sellout plan the party proposes.

Matt Taibbi warns about another huge gift to the oligarchy, the corporate tax holiday (also known as the ‘tax repatriation holiday), that is going to be snuck into the deal somewhere along the line. Also watch for the other shoe to drop in this deal as it seems as if the ‘bipartisan commission’ that is part of the deal has been given triggers that will lead to cuts in the social welfare net in the coming year.

Oddly enough, although the Democratic party’s base should be the ones demanding that this deal be scuttled, in reality it is only the Tea Party which has the gumption to defy its party’s leadership. Of course, if they do and the deal goes down in flames, the Democratic party leadership will only use the subsequent ‘crisis’ as an opportunity to be ‘forced’ give the oligarchy even more goodies.

I am not by nature a cynical person. But when it comes to predicting how politics in the US will play out, I have found that you can’t go far wrong in picking the most cynical view to be the right one.

The debt ceiling brinkmanship is a manufactured crisis where none needs to exist. It is becoming clear that for a small but determined group within the Republican party led by the Tea Partiers, the national debt and deficit financing, rather than being simply another option in a nation’s fiscal policy, has become an obsession, a dangerous ogre that must be slain now. They are adamant about not raising the debt ceiling, and seem to think that forcing the US to default could be a good thing, because it would create chaotic conditions that could lay the groundwork for their ultimate dream, a balanced budget constitutional amendment.

But what should not be forgotten is that despite the Tea Partiers, it was always clear to me that the debt ceiling would be increased because the oligarchy wanted it and the fact that there was until yesterday still no public agreement between the two parties’ leaderships and the White House suggested to me that this so-called crisis was a purely artificial one, manufactured to advance other goals.
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For those who like to know the details of how much money the US government takes in (and from where) and how much it spends (and on what), the US Treasury publishes a wealth of figures.

In particular you can see the activity in its ‘checking account’ on a daily basis. Thursday, July 28th is the last day for which the figures are available and we are told that the government started the day with about $74 billion, took in $112 billion and spent $132 billion, leaving it at the end of the day with $54 billion.

You can see what is causing concern if you look at the last column that gives the fiscal-year-to-date figures. (Note that in the US, the fiscal year starts on October 1 and ends on September 30 of the following year.) It shows that the government started the fiscal year with $310 billion, and for the year so far had receipts of $9,108 billion and expenditures of $9,364 billion. So we have had a drop of $256 billion in just ten months, an average burn rate of $26 billion per month, which is why we are so close to emptying the account.

But the monthly figures can fluctuate wildly so the average rate is not a good predictor of what will happen in the short term. (Caution: When reading the monthly table, note that for some reason monthly deficits are entered as positive numbers and surpluses as negative.)

Following the mass killings in Norway that, on a per capita basis, inflicted a death toll that was greater than that of 9/11, the government is treating it as a criminal matter and prime minister Jens Stoltenberg said that “I hope and also believe that the Norway we will see after will be more open, a more tolerant society than what we had before.”

Yes, his response is to want to make the country more open and tolerant.

Oh, those silly Norwegians. Don’t they know that that the proper response to a mass murder is to declare it to be a terrorist act, proclaim a war on terror that involves bombing and invading countries whose populations have the same religion as the killer, harass your own population by subjecting them to all manner of intrusive surveillance to make sure they are not up to no good, suspend constitutional rights by detaining people indefinitely without trial on the flimsiest of suspicions, create kangaroo courts to guarantee convictions and secret prisons overseas, and torture and kill those in custody?

I wrote earlier about how IKEA’s sole US factory was treating its workers really badly (see here, here, and here).

Thanks to reader Fu Dayi, I learn that the factory is going to unionize. What helped in the unionization efforts was the public shaming that IKEA received which was damaging its reputation as a good employer.

This should lead to better working conditions.

While many of us wonder what might be the long-term ramifications of a government default and shutdown if the debt ceiling is not raised by August 2, for many people this is not merely an academic exercise but a real and immediate danger.

Recall that about half of American households are ‘economically fragile’ in the sense that in an emergency they could not lay their hands on $2,000 within 30 days. They live from paycheck to paycheck. What will happen to such households if government employees get furloughed and don’t get paid or to similarly situated seniors if the social security checks don’t go out? How will they pay their rent and mortgages?

This should be a sobering reminder that politics is not a game. Ordinary people get hurt.

Oligarchies are most effective when they work in the background, out of the public eye, getting their way by having political leaders carry out their bidding. The oligarchy usually prefers to use establishment academics and the media and the bond rating agencies to speak on their behalf but they seem to have become worried that those subtle, behind-the-scenes ways seem to have failed when it comes to raising the debt ceiling, forcing them to come out more in the open.

Wall Street has pretty much openly told the Republican party leadership that the kabuki theater had gone on long enough and to raise the debt ceiling. In a highly unusual move, a broad segment of the oligarchy sent an open letter to Obama and every member of Congress (though I suspect that the real targets were the debt-ceiling holdouts) that the ceiling must be raised.
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The second weekend of the Sarah Palin fan biopic The Undefeated saw the film being expanded to 14 cities from the original 10 but reporting gross box office receipts of just $24,000, a decline of 63% from the first weekend.

To the calculators! With apologies to Tbogg, who has been mocking chronicling the film’s performance so far (see here and here and here), but the above results mean a weekend average of $1,714 per city or $571 per day or $143 per show (assuming four shows per day) or 18 people per showing (at $8 per ticket).

I think it is safe to say that if you want to see the film, you need not bother about buying tickets in advance, unless they are showing it in people’s living rooms.

This must really hurt, you betcha. After all, the distributors carefully chose cities that are supposed to be friendly to her, such as Grapevine, Texas.

Which raises the question: Where are all the real Merkins who see Palin as the nation’s savior? Surely she has more fans than this? Why aren’t they showing her some love in return for the joy she brings to their lives?

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

In reading about the horrific tragedy in Norway, I was trying to think of how, even to a diseased mind, it would make sense to mow down a large number of trapped unarmed young people. How could you possibly think it would bring credit to your cause (whatever it is)?

I know I may be engaged in the futile pursuit of trying to make sense of the actions of someone who has to be crazy, but such people do not seem to be crazy in the sense of having no idea what they are doing. This guy was clearly a coldly calculating person, planning the murders with great precision.

So what is it that causes their calculations to go so awry in the one particular area of gauging the likely reactions of ordinary people to their actions? Why can’t they see that it will cause people to recoil in disgust?