US debt ceiling division may be the harbinger of greater crises to come

AS THE government shutdown has metastasised into a crisis about the US debt ceiling, a dark narrative has been playing endlessly inside my head. For the social and political divisions that have been revealed over these past few weeks may well be harbingers of greater crises ahead.

To understand why, we need only look back to 1967. Even before the Summer of Love began, the peerless Buffalo Springfield, as ever ahead of the curve, was singing about its demise: “There’s somethin’ happenin’ here/ What it is ain’t exactly clear/ There’s a man with a gun over there/ A tellin’ me I got to beware/ I think it’s time we stop, children, what’s that/ Sound?/ Everybody look what’s going down.”

The ominous, prophetic single of February 1967, For What It’s Worth, was inspired by the previous November’s Sunset Strip riots in Los Angeles between police and local kids over a draconian curfew designed to put an end to the youth scene that was beginning to flourish. Both the song and the riot were a foretaste of the gaping divisions to come – over Vietnam, civil rights, and the generation gap.

Now, with the 17 October deadline inching into view – the date when the US could default if the debt ceiling is not raised by Congress – both sides have morphed into sullen teenagers. Barack Obama has said he will only negotiate over other issues when a clean bill raising the debt ceiling is passed, and House Republicans will only pass such a bill if Obama agrees in advance to negotiate over other issues. This would be funny if the consequences were not so dire.

The White House thinks it has little immediate incentive to let the Republicans up for air. The most recent poll numbers, published on 7 October, make it clear that House Republicans are hated for what they are doing (the Washington Post/ABC News poll has them with a negative 46 per cent approval differential), House Democrats are strongly disliked (negative 16), with the public finding the White House’s shenanigans only distasteful (negative 6). In the hateful shark tank of Washington politics, this constitutes a win for the President.

But he must be careful. As one commentator observed over the weekend, “Can anyone remember the name of the Speaker of the House in 1929?” Presidents, not Congress, are ultimately held accountable for the economy, however factually unreasonable that is. If the Obama administration really thinks an actual default will help them, they are even farther gone than I fear.

While it is easy (and correct) to blame the political pygmies in both parties, as Winston Churchill rightly observed you get what you deserve in a democracy. And here politics is merely following the American cultural bandwagon. For Washington isn’t doing this to the US people. Culturally, Americans in 45 of 50 states (despite what they say) like the present state of affairs, to the extent of continuing to vote for one-party governments at the state and local levels.

And as Charles Darwin realised, once self-selection starts, it is a very difficult process to stop. People with cosmopolitan, leftish views prefer living in New York City and San Francisco, where they know such points of view are favourably looked upon, just as those who cherish traditional American values like to live in places like Texas and Nebraska.

While this has always been true, intellectual flabbiness – the basic yearning not to be challenged by other views, but to instead cocoon oneself among news sources and neighbours that sustain one’s own prejudices – has taken this natural process an unnatural step further. A majority of the country finds itself surrounded by people of similar views, who just cannot understand how the other side can be so incredibly stupid. Why compromise with morons?

Yes, Goldman Sachs’s assessment that a failure to raise the ceiling could have immediate costs of 4.2 per cent of GDP is important, as is China’s exasperated plea that – as holders of $1.28 trillion of US debt – someone better remember that this process is unlikely to result in Beijing being terribly keen to buy more. Certainly, this act of political self-immolation would signify a dramatic reversal of fortune, with America transforming itself from leading the global economic recovery to being the primary millstone around the world’s neck.

But far worse, as Buffalo Springfield would recognise, this calamity would represent such a fraying of American society that its future political stability can no longer be complacently assumed by anyone. These are the real stakes of the events of the next few days, and they couldn’t be higher.

Dr John C Hulsman is president and co-founder of John C Hulsman Enterprises (www.john-hulsman.com), a political risk consultancy. He is a life member of the Council on Foreign Relations, and author of Ethical Realism, The Godfather Doctrine, and Lawrence of Arabia, To Begin the World Over Again.

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