Wall St. Starts to Twitch. But Will It Matter?
by David Atkins ("thereisnospoon")
Josh Marshall says that Wall St. is about to bring down the curtain on the kabuki play:
I mentioned before that it's not clear whether John Boehner even has the votes for his own plan in the chamber he runs. In other words, will House Republicans even support Boehner's plan, the plan of their nominal leader, let alone anything that would pass the Senate or garner the president's signature?
At that point everyone should be able to see there aren't two sides here to tango, we're listening to the sound of one hand compromising.
The scenario being floated informally now by a lot of observers is that if and when we come to that point Republicans in the Senate, Wall Street and just a lot sane people in general who haven't come off the sidelines yet or haven't really been paying attention just say: Dude, you don't have a full deck, this is over.
Color me unconvinced. I've said before that it would take actual negative effects in the market for enough Republicans to get off their high horse, and enough Congressional Democrats (particularly in the Senate) to cave enough, to push through a default ceiling increase, albeit with very significant cuts to discretionary spending. But I don't see any outside forces coming in to really sway things before then.
One must remember that while the Tea Party caucus in the House is a useful tool of the financial sector, and promotes economic policies that Wall St. finds highly useful, they don't actually like Wall St.. These are the sort of people who got elected by promising never to vote for anything like TARP again, who campaigned on Barack Obama's being a tool of New York bankers and in cahoots with them. Right wing blogs are just as full of conspiracy theories alleging that Obama is in bed with the ratings agencies to needlessly downgrade America's credit, as some left wing blogs are, though the rationales for the theories are obviously quite different. These people aren't going to do squat that Wall St. says unless there's a significant real-world market effect, because they don't really respect Wall St. or believe anything that a bunch of socially liberal bankers from New York say. And even then the question is iffy.
Right now these folks are having to watch inspirational movie clips just to stir up the "courage" to vote for Boehner's whacked out plan that is too far right for Reid's Senate or Obama's veto pen. Tim Geithner's friends aren't going to change that equation much.
In order for enough Republicans to be willing to face up to Tea Party challengers for voting on anything to the left of Boehner's latest proposal, they're going to need the cover of a crisis. So far, we aren't there yet.