July 12, 2011 ended without fanfare, the "Supply-Side" political economic era when Senator Mitch McConnell offered his "back-door" out of the debt-ceiling crisis. Let's face it, the Debt-Ceiling and the entire political kitchen sink that has been thrown into the political crisis is now exposed as a political trap by the Obama team. As the radical Republicans entered the fray they thought they had the debt-ceiling and its subsequent Treasury default as hostage to force the Democrats and Obama into a political deal of their liking---but they miscalculated and now are trapped in a political box canyon.
Let me explain: Obama holds the following resources; Democratic legislators in both the House and Senate where no bill can pass the Congress without Democratic votes. And then there is his veto power both serious weapons over Wall Street and the Economic Imperialists worldwide who would lose billions if not trillions the closer the US gets to default. Remember default is the real nuclear bomb.
The bait of course was and remains protecting and extending current corporate tax rates and rates on those who personally benefit from the current Economic Empire centered on Wall Street whom the Republican Party's leadership are not only beholden to but are their legislative servants. The attraction to the bait was seemingly thinking that Obama and the Democrats were politically vulnerable and would cave in to their hostage taking.
But like all traps Obama held firm, coy and appeared vulnerable, seemingly negotiating and even leading a conciliatory process bringing in more and more political capital of the Republicans until now where the Republicans have realized they are exposed as mere shrills for the Wall Street Imperialists and exposing their own political majorities while seeing that now Obama has actually snatched the debt-ceiling leverage and is holding them hostage.
In its wake Obama has exposed Cantor as a naive, disrespectful and incompetent political leader along with the Congressional Tea Party coalition he is purported leading. All this is tense political theater but the bigger consequence is not going to be the Republican players but the 30 year "Supply-Side Political-Economic" establishment that was characterized as the "Reagan Revolution". Actually that revolution was a coup, a stealth coup d'etat by Wall Street bankers and the finance industry. They successfully took over the U.S. economy and government by perpetuating a mythology of supply-side economics where all taxes and regulations were evil changing their take of the economy from 18% of profitable income to 43%. That figure continues to grow as manufacturing and all other work-income and asset wealth diminish in the paper-finance economy.
But like the dot.com bubble where it was once thought that "profits never mattered only eyeballs", or the real estate mortgage bubble where "loans didn't have to be repaid or even scored merely refinanced again", money and accounting has a force of its own, as in needing to be ultimately reconciled and legitimate. Supply-side economics didn't believe in actually funding government programs because they were a drag on the capitalist economy. Actually Supply-side held that they didn't want to pay for programs.
So now their parallel virtual universe has merged with reality and supply-sider's will actually have to participate in funding government programs and actually be party to raising taxes on their benefactors. And doing so will politically benefit their arch enemy, Obama because he will have saved America by trapping them.