Sunday Morning Update - And An Insight

Good morning.

Another day has dawned and as of last evening it would appear that we have a debt ceiling agreement.  To be sure, the agreement to avert a default now heads to congress; where its passage is clearly uncertain.  Speaker McCarthy continues to be bedeviled by troublemakers who may revolt.  As a consequence the Kabuki Dance and its theatrical drama persists.

I'd like to share some insights from Peter Zeihan, geopolitical analyst and author.  I follow him closely in my retirement journey to better understand the impacts of financial, cultural, political and military events.  

Zeihan's observations on the debt ceiling generally jibe with my own.  Namely, after threatening a sufficient amount a unwarranted self-sabotage an agreement will materialize at the last moment.  Fingers-crossed that we've correctly predicted the outcome.

The US is one of the few nations that imposes a hard cap on public borrowing.  And this is not the first time a political party has sought to weaponize a threat of default as a means of extracting budget concessions that should belong in appropriations negotiations.  Unless the system changes it won't be the last.

For the present, the Democrats have accused their Republican colleagues of cynically using the mechanism to damage Biden going into the 2024 election cycle and to slash spending that they would likely struggle to pass into law.

Of course, when under recent Republican rule, total debt under Trump increased by $8 trillion.  That is a whopping one-fifth (20%) of the entire total.  In all fairness, there was a COVID response back then and $4 trillion was added by Biden so there is plenty of blame to go around.

This is all just political theater; but it has gone a bit further than usual.  What I wanted to share is that Zeihan has pulled the lamp cord on my light bulb casting more light and added clarity for independents, center-right individuals and conservatives who have found themselves wandering in exile for the last seven or so years.

Zeihan reminds his viewers that we're going thru a period of political transition - something that occurs every couple of decades.  And when that happens the factions that make up the parties move around.  They jump ship, maybe they become swing voters or they might switch sides.  The stage that we're at in the moment is one where the fiscal and business conservatives have been banished from the Republican coalition while at the same time the MAGA movement has attracted significant union and populist support from the Democrats.  It is messy.

Between the unions, fiscal and business conservatives all transitioning, when it comes to the debt ceiling there's no one around to knock some sense into other fringe groups more willing to play with matches.

So, there you have it.  When I tell you:  It isn't my daddy's Republican party anymore. It is because it isn't.  The GOP has been undergoing fundamental changes since the onset of the tea party movement.  Donald Trump's trouncing of the Republican establishment in 2016 and his continued popularity among his base exposes the weakness of the laissez-faire economic approach known as Reaganism.  Reagan Republicans and Neo-conservatives who believe in limited government, free trade, fiscal responsibility, a muscular foreign policy and staying out of the people's personal lives need not apply.  Cancel your Chamber of Commerce membership.  You are persona non grata.

Being an old guy and set in my ways my cohort of like-minded individuals has little tolerance for performative politics.  So if you want to have a meltdown over a rainbow windsock on sale at Target that's your business.  It isn't going to add to the prosperity of my country, security domestically or abroad, secure the border or fix the systemic problems of our shaky entitlement programs.  It's basically a bullshit party platform.

While it sucks periodically to reflect on having outgrown my usefulness I'm satisfied to watch from the sidelines until the wheels come off.  I may be obsolete, but this old guy isn't gonna die on Culture War Hill.  I'm gonna enjoy the show.

The gist of what I outline above starts just before the two minute mark.  But watch the entire thing.  It's a short four minutes.  Thanks, Peter for helping me navigate this.  And a Hat Tip to Braumeister for the initial recommendation many years ago.....