The takeaway line from the film All the President's Men is "Follow the money".
This concept can be applied to many otherwise nonsensical public controversies.
When it comes to the House Republicans and seemingly insane conditions placed on raising the US debt limit, consider these things:
(1) What is the prompt effect on financial markets?
(2) Who is in a position to quickly change the course of events?
(3) How can profit be made?
The formula for insider trading is this:
Some investors know what will happen, and some do not.
The NYT quoting someone once in the dark:
“It’s easy to look back and say it was all planned that way,” said Leon E. Panetta, Mr. Obama’s former defense secretary and Mr. Clinton’s chief of staff during the shutdowns. “But I have to tell you, it was a day-to-day crisis, and you never quite knew what the hell was going to happen.”
Let's start with a recent posting on zerohedge.com:
Q. All this sounds pretty scary. Why aren't financial markets panicking?
A. Stock prices have fallen in six of the past seven days, partly because of the looming deadlines. But the price declines have been modest. Many investors likely feel they have seen this movie before and know how it ends: with another last-minute deal.
"After several rounds of fiscal brinksmanship ... markets may be somewhat desensitized to the headlines," Alec Phillips, an economist at Goldman Sachs, wrote in a note to clients.
It is ironic that the economist quoted is from Goldman Sachs. Ted Cruz, the junior senator from Calgary is
married to the
head of the Southwest Region in the Investment Management Division of Goldman, Sachs & Co.
Of course, if one were to manipulate events to cause predictable fluctuations in stock market equity prices, the profit potential is there, but perhaps only weakly. It is a blunt instrument at best.
But there is a sharper tool. Consider this from online.wsj.com (September 26, 2013):
The cost of insuring against a U.S. default for a year has risen sixfold in the past week, reaching its highest level since 2011, reflecting investor bets that the government could fall behind on its debt payments in the coming weeks.
.
And if there is no default, the insurers do quite well. Better than a sixfold increase in profit.
Could it be that the secret admirers who fund political campaigns for Tea Party acolytes really have a patriotic (if misguided) ideology directed at helping America? Or are they so wealthy and insulated from any downside of their manipulations that anything goes when it comes to working the levers of power to make the machinery deliver more gains to them, and damn the rest of us?
How could anyone prove the latter?
What do you think?