You’ll hear some conservatives argue that the Tea Party represents a different politics, less “pro-business” than the GOP we knew – instead, consistently committed to “limited government” in ways that can be counter to business interests. To what extent is that just spin, or a real divide? "It’s a kind of regional and inter-class battle. I think, to use the Marxist language, [the Tea Partyers] represent an enraged provincial petit bourgeois that feel that they are seeing society change in ways that they don’t like. They look at things like Obamacare and see that as a way of subsidizing a minority electoral bloc that will push the government in ways that they don’t like. These are the small-town worthies, like the local car dealers — people who are millionaires, but not billionaires. They are big wheels in their local communities, but not on a national level. And then you have ideological right-wingers like the Koch brothers who use these folks very effectively." How severe do you think the tensions are between the perceived interests of that group and the business interests backing the GOP? Is that something that will intensify? "To some degree the Big Business interests are paying a price for having relied on these characters in the first place. The last thing that Big Business wants to see is something that threatens the status of Treasury bonds. They don’t want to threaten the status of the dollar as reserve currency. They don’t want to rock the image of the United States as the most stable capitalist power in the world. Even though the financial crisis essentially originated here, money still flowed to the United States then because it seemed safer than everywhere else. The big boys don’t want to endanger that status. Even a technical default might not have immediately disastrous consequences, but it would certainly erode that perception of the U.S. as a safe haven. I think they understand it would reduce the status and power of the U.S. in the world, and they don’t want to see that. I don’t think the Tea Party people particularly care about that." What does the apparent possibility of a default reveal about the state of our economy? "The fact that it’s even a possibility is just surreal. The American elite has lost control, or is losing control, of some of the core mechanisms of its power. And I think the rest of the world must watch with jaw hanging down. And I think a lot of the Tea Party types either don’t care about the risk of default, or don’t believe that anything serious can emerge from a serious default." Which “mechanisms of its power”? "The Treasury bond market is at the core of American financial economic power. It’s the gold standard of the global securities markets. It’s the safe haven in times of trouble, and if that safe haven loses some of that safe haven status, something happens to U.S. power in the world. I’m no fan of empires — I’m not saying this would necessarily in the long term be a tragic thing. But it would promote an awful lot of disorder, and quite possibly a global financial crisis, and another return to deep recession. So there’s that. The consequences of default could be quite tumultuous."
Posted on: Wed, 09 Oct 2013 16:21:46 +0000
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