UPDATE: Friday, Dec 20, 2024 · 3:31:41 PM +00:00
·
xaxnar
Speaker Mike Johnson (soon to be ex-speaker?) is scrambling to put a budget deal together to avoid a government shutdown tomorrow. What a Holiday Gift from President Musk and First Laddy Trump. More at The NY Times here.
They couldn’t even wait till January to unleash the chaos. Classic hubris — too bad the country and the world are within the blast radius.
One more thing. Assuming Johnson is unable to remain Speaker in the next Congress, the days and weeks it might take the GOP to select a new ‘leader’ might take them past the deadline to certify the election.
Paul Krugman may have written his last column for The NY Times (gift link) but he has not gone silent. (Audio discussion of his writings at the Times.) If anything, he’s keeping busier on Substack.
The Chaos Monkeys Have Already Taken Over the Zoo — The peddlers of misinformation are high on their own supply
Here’s how it starts:
Well, I was going to post about proposals for bank deregulation, but I think that can wait for a bit. The news of the moment is the looming prospect that the federal government will shut down over the weekend.
We’ll have to see how much damage this does, but it’s already clear that assuming the worst happens — and it’s hard to see how it won’t — this will be the dumbest shutdown ever. I’d say that the incoming Musk administration (so far Musk, not Trump, appears to be calling the shots) is trying to hold itself up for ransom, but it doesn’t even rise to that level. This isn’t like 1995, when Newt Gingrich shut down the government in an attempt to extract cuts in Medicare and Medicaid — a move that seemed (and was) a foolish act of petulance, but at least had a ghost of motivation.
No, Musk is demanding — apparently successfully — that Republicans in Congress renege on a deal they had already agreed to, a continuing resolution that would keep the federal government going for the next few months. Why? Because, Musk says, of the outrageous provisions in that CR.
Except none of the items Musk is complaining about are actually in the bill. No, Congress isn’t giving itself a 40 percent raise. No, the bill doesn’t fund a $3 billion stadium in Washington. No, it doesn’t block future investigations into the Jan. 6 committee. No, it doesn’t fund bioweapons labs.
emphasis added
Krugman makes a couple of points. One, there’s no place to make the huge cuts Musk and Vivek Ramaswamy are demanding. As Krugman has said before, the government is essentially an insurance company with an army. (A graphic shows where the money goes.)
Second, the richest man in the world has not a clue about what he’s talking about — and no one to tell him different. (And Trump has basically outsourced all of his economic policy to Musk — not that he knew anything to begin with.)
The problem with turning government over to the super rich is that they don’t need government for anything, as long as they can buy what they want/need whenever they feel like it. For them, government is just something that gets in their way when it’s not totally subservient to them. They don’t think they need it and they sure as hell hate paying the little they do in taxes to support it.
Not so for the rest of us, as Krugman shows with a few examples. “I’m glad that I won’t need to renew my passport any time soon, that I don’t expect to be trying to get through airport security for a while, and especially glad that I don’t rely either on food stamps or on small business loans. For all of these things have been disrupted in past government shutdowns.”
Krugman also suspects the financial markets may start to reconsider their belief that the incoming Trump show would not really disrupt anything — maybe some symbolic deportations, and minor trade wars, but otherwise business as usual, transferring wealth upwards. Instead this is looking like the political version of Dornnbusch’s Law.
The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.
We knew it was going to be bad, just not this soon and this quickly.
Meanwhile from the digital version of The NY Times:
Trump Transition Live Updates: Republicans Search for Path to Avert a Shutdown After Trump Smashes Speaker’s Deal
-
President-elect Donald J. Trump’s denunciation of a stopgap spending bill has left Republicans without a strategy to fund the government, and Speaker Mike Johnson is grasping for a way to avert a shutdown this weekend. Mr. Trump torpedoed the bipartisan deal Mr. Johnson had struck, leaving him caught between two seemingly untenable options: continue with a bill sapped of Republican support or try to implement Mr. Trump’s demands, which will be a tough sell among Democrats, who still control the Senate, and some Republicans. Read more ›
-
Mr. Trump publicly turned against the deal after the billionaire Elon Musk, the world’s richest man, spent much of Wednesday railing against the agreement. Mr. Musk, whom Mr. Trump picked to slash government spending as part of his so-called Department of Government Efficiency, spread misinformation about the agreement and vowed political retribution against any lawmaker who supports it. Read more ›
Elon Musk Flexes His Political Strength as Government Shutdown Looms
The world’s richest man led the charge to kill a bipartisan spending deal, in part by promoting false and misleading claims about it.
When President-elect Donald J. Trump picked “the Great Elon Musk,” the world’s richest man, to slash government spending and waste, he mused that the effort might be “the Manhattan Project of our time.”
On Wednesday, that prediction looked spot on. Wielding the social media platform he purchased for $44 billion in 2022, Mr. Musk detonated a rhetorical nuclear bomb in the middle of government shutdown negotiations on Capitol Hill.
In more than 150 separate posts on X, Mr. Musk demanded that Republicans back away from a bipartisan spending deal that was meant to avoid a government shutdown over Christmas. He vowed political retribution against anyone voting for the sprawling bill backed by House Speaker Mike Johnson.
emphasis added
Trump Tossed a Debt Limit Grenade Into Spending Talks. Here’s Why.
President-elect Donald J. Trump was forced to negotiate with Democrats over the borrowing cap during his first term.
President-elect Donald J. Trump injected debt limit politics into already-fraught congressional spending talks this week, urging lawmakers to lift the debt limit or abolish it entirely before he takes office next month.
The re-emergence of the debt limit comes 18 months after Republicans and Democrats staved off a fiscal crisis and agreed to suspend a cap on how much the government can borrow until after the 2024 presidential election. That was supposed to clear the decks and sidestep a politically difficult vote during the heat of campaign season.
But now the problem is waiting for Mr. Trump. As he prepares to push an agenda of tax cuts and border security, Mr. Trump fears that a debt limit fight next year could interfere. His plans are expected to cost trillions of dollars, much of which will most likely need to come from borrowed funds. A drawn-out debt limit fight next year could force Mr. Trump and Republicans to bow to the demands of Democrats and could consume the congressional calendar.
“This is a nasty TRAP set in place by the Radical Left Democrats!” Mr. Trump wrote on social medial on Wednesday night.
In other words, the party of ‘fiscal responsibility’ is demanding the right to spend money without limits, even as they are preparing to shut down the government now because they object to imaginary spending they claim is too much. Further, they intend to completely shut Democrats out of everything — like they’ve been telling us for literally decades now.
We are through the looking glass. Remind me again how the real problem was Biden was too old, Harris was a DEI hire who didn’t give enough interviews, Democrats were not doing enough bipartisanship to embrace the center, and the price of eggs was too high.
The illustration Dr. Krugman used for his latest commentary is spot on. The Chaos Monkeys have taken over the zoo.
And here we are.
I wonder how many Trump voters realized they were actually making Elon Musk co-president? (Krugman observes in passing that “JV Dance” seems to have become superfluous.)
At least Krugman is out from behind The NY Times pay wall and available at Substack. It tells you everything you need to know about the Times that, now that Krugman has left them, they are referring to him as a contrarian.