Tim Stanley
Hail Mary, the US House finally has a Speaker! Mike Johnson clinched the vote on the fourth, exhausting round – but pundits say demonically possessed Ken doll Matt Gaetz is the real winner. He pushed Kevin McCarthy from the job on October 3, compelling the GOP to audition and reject three other candidates before settling on this ideologically-approved pick from Louisiana – the winner telling legislators that we are all where we are because God wills it (though how this accounts for the career of serial liar George Santos, Heaven knows).
I immediately opened the New York Times, because I like my commentary as hysterical as possible. The hot take is that Johnson is “far-Right” and represents a backdoor coup by the MAGA militants. But what is far-Right? To a European ear, that means neo-Nazi; almost no one in the GOP caucus ticks that box (almost). And is it sensible to see everything through the prism of Trumpland? The brilliant commentator Matt Lewis explains the dynamics of the Speaker race thus: it was populists v moderates, and the populists were always going to win because the moderates, by their very nature, are prone to compromise. So the conservatives held out doggedly till they got Johnson, an amiable fanatic who ticked the critical box of having questioned the 2020 election result.
But hang on: Trump-ally McCarthy also questioned the presidential election, and the supposedly moderate candidate Tom Emmer said it involved “questionable practices”, too. Contender Jim Jordan, famous for wrestling and eschewing a jacket, was probably the most ideological contender of all, yet failed to convince his peers to support him – and Johnson’s victory speech, contra expectations, turned out to be emollient and occasionally bipartisan.
His first priorities? Help for Israel and securing the border – and there are signs that Right-wingers might cut him more slack on spending negotiations with the White House to keep the government open. It’s possible that all Gaetz has won is a promise that Johnson will try to reduce the size of government harder than McCarthy did – confirming suspicions that this whole thing was a battle over style rather than substance, and a distraction from bigger issues.
Gaetzgate is the symptom of a twin structural crisis, not the cause. One part is political: the United States is too divided to provide a majority for any course of action regardless of ideological alignment – allowing tiny factions within Congress to pull the plug on compromise, while the partisan control of different branches makes it impossible to implement one manifesto coherently (that goes for the Court as well as the legislature and executive: over the summer, the judges struck down Biden’s signature student debt forgiveness plan).
The other challenge is economic, namely that America is coming to the end of a long road of debt-accumulation. The country can raise taxes or cut spending to restore stability; politics favours neither, while tax cuts and welfare goodies remain central to the Republican and Democrat pitches. Elected officials seem to reside in fantasyland.
In his State of the Union, Biden claimed that he’d delivered “the largest deficit reduction in American history”. The editors of the National Review note that what really happened is that Covid-era spending came to an end, giving the impression that because the US was spending less than a historic high, its spending was historically low. Biden was talking gibberish: “the federal deficit [actually] doubled in fiscal year 2023”, running between $1.7 trillion and $2 trillion.
Adding to this, the president took the opportunity of the Israel attacks to go on TV and demand an additional $106 billion, with only $14 billion of it earmarked for the beleaguered Jewish state (Ukraine gets $61 billion, a figure that Johnson is likely to oppose). Why is the deficit up? Well, we can pin more than 40 per cent of the increased shortfall on falling tax revenues, while over a quarter is thanks to rising costs of entitlements. As Facts of Life conservatives will tell you, failure to grow the economy wedded to generosity in welfare spending creates a “doom spiral”, as one struggles to keep pace with the expanding cost of the other. A society cannot spend that much more wealth than it generates, and the byproduct is the cost of financing greater debt, with interest costs rising 40 per cent last year.
You can fool voters into thinking this is sustainable – along with academics, pundits and even central banks, who, until recently, bought into the popular idea that inflation was a thing of the past and money would remain cheap forever. The one thing in life you can never, ever buck is the market – and hence there’s been a rapid sell-off in the bond markets.
The price of these bonds is falling, the yields are going up, which indicates that the market believes the era of cheap money is over, governments are overstretched, wars in Ukraine and the Middle East signal further disruption to come, and investors don’t believe the US has the leadership necessary to fix things soon.
Thus the economic problem circles back to the political. If America had the kind of politicians who cleared up a similar mess in the early 1990s – with a grand budget compromise that damaged the reputation of both Democrats and Republicans – the market mood might revive. But the combination of Biden’s senility, Trump’s trials, the Democratic Party’s drift towards woo-woo politics and the Right’s refusal to give ground on anything, adds to the sense that our current world order is a pack of jokers waiting to fall.
The Telegraph
