The tension in the party was highlighted in a clash between Senator John McCain, the Republican contender in the 2008 White House race and a veteran who has done deals all his political life with colleagues from the Democratic party. He described as “bizarro” the newer members and dismissed them as naive, seeing the world as a Lord of the Rings battle between good and evil. One Tea Party senator elected for the first time in November, Rand Paul, in one of the stranger exchanges of the week, responded that he was happy to regard himself as a hobbit.

The dynamic of the crisis has pivoted on the intransigence of a small number of Tea Party aligned Republican House members. Hence, as Paul Krugman points out, the usual process of compromise has seen Barack Obama offer up cuts to social spending which “are far to the right of what the average American voter prefers”.

If the Tea Party legislators are in fact obsessed with ideological purity to the exclusion of most everything else, then we are observing something very interesting indeed. Slogans about “small government” have morphed from vague statements of orientation and political differentiation into a threat to the continuance of governance as usual. Fantasies about 18th century Republics threaten to have their effect on reality in 2011.

While neo-liberal rhetoric has enveloped American politics in the last few decades, the reality has been “big government conservatism”. Now that reality awaits its showdown with an ideology sundered from any real concern with consequences.

Ideology is always part fantasy. But, usually, the fantastic element is contained within political structures and routines. If it prevails to the exclusion of a relation to reality, then the result will indeed reshape reality, but not in the way that the ideologists might want.

You can follow the trainwreck here. Some impetus to a resolution comes from the spectre of a meltdown when Wall Street opens on Monday morning. But the forces working against a compromise may yet prevail.

NB: Previous discussion of the debt crisis on LP is here.

Never has the political culture of the United States seemed more alien than when watching it.

Andrew Bartlett:

For the last few months, I’ve found it hard to shake the idea that the Liberal Party’s overriding approach to politics and policy has deteriorated to a level little better than where the US Republican Party now finds itself. I think the reason why things have sunk this low has a lot to do with the perverted nature of the so-called culture and history wars which were embraced with such fervour by the Howard government.

The Liberal’s incoherent, self-contradicting approach on a whole range of policy issues – most worryingly even on economic and tax policy – might be sufficiently obscured by their continuing inchoate war on everything as to provide electoral benefits for them. But once rational thinking is no longer required – in fact becomes an impediment to launching the latest barrage – then there is no guarantee it will ever be returned to at some stage down the track.

Charles Richardson: [paywalled]

Fraser’s generation, having lived through the Second World War, could never forget the importance of liberalism; even down to John Howard?—?whose similarities with Fraser are often overlooked?—?it was understood that there were potential enemies to the right as well as to the left.

With the current generation, that realisation has been lost.

The Liberal Party of Fraser’s time, whatever its faults (and there were many), would never have flirted with torture, with creationism, and with the repudiation of international law over Tampa and later Iraq. There are still liberals in the party today, but they are outnumbered and outgunned by the acolytes of an American-style “movement” conservatism?—?militant, intolerant and anti-intellectual.

I’m not sure the Libs are the Tea Party equivalent; that movement has spun out of the Republicans’ control, as the victory of Rand Paul in the Kentucky Senate primary, Governor Charlie Crist’s defection from the GOP in Florida, and the results of the Utah convention show. Mark Lillia, writing in the New York Review of Books has a rather interesting take on the Tea Party – libertarian anti-politics, he suggests. But the Liberals have certainly taken over a huge slice of the Republican/Fox News/Noise Machine playbook. The soil for constructing an electoral majority on these lines may be more fallow in the US than many think – I’m not at all sure the expected Democratic wipeout in the mid terms will eventuate. But I do strongly suspect it’s even more fallow here in Australia. Rudd may be in trouble; but Abbott’s probably still unelectable. In the mean time, we have nothing like a sensible political debate on the issues confronting our country.

Certainly, the party swap of Pennsylvania Senator Arlen Specter is a fillip for the Democrats.

Although, those with a long memory for the ‘Clarence Thomas hearings’ might question the elderly gentleman’s progressivism when it comes to issues of concern to women. Anita Hill, wherever she is now, probably isn’t over the moon:

<img src="http://larvatusprodeo.net/wp-content/uploads/2009/05/specter.jpg" align=left Though another way of looking at that is that he’s the very model of the Senex – the governing classes of what passes for the Republic these days.

In truth, I’d suggest, Specter’s defection reflects a real ‘partisan realignment’ – the shift of established power bases to the Democrats, uniting around Barack Obama now that he’s proved that his version of “change we can believe in” is softly, softly muted. This, of course, does leave the Republicans as the party of the noise machine, and an increasingly marginalised voter base, but where does it leave progressive politics in the U S of A? If you’re in a kind mood, you might assume that Obama’s natural instincts will be further pulled rightwards… You read the omens!

has blind-sided the Government over the $42 billion stimulus package… left Kevin Rudd politically flat-footed and frustrated…and given the Opposition an early advantage….Caught off balance and unprepared, Rudd is cranking up his depiction of Turnbull as being uncaring, out of touch and irresponsible, as the Labor leader tries to claw back Turnbull’s initial break and gain ground in the longer term.

Huh?

I wrote the other day:

Malcom Turnbull’s whole tenure as Opposition Leader can be summed up as “too cute by half” – a lot of the time he’s been playing to two bit commentators in the Canberra press gallery rather than the electorate.

Bernard Keane on Wednesday:

Rudd’s campaign will now accelerate into a ferocious attack on the Liberal Party. They will be portrayed as extremists who are deliberately, bloody-mindedly preventing the Government from dealing with the crisis because of their ideological extremism. If the Government succeeds in its attacks — and thanks to Malcolm Turnbull, their chances of doing so have risen massively — they could crush the conservative side of politics for the next couple of years, leaving them irrelevant, divided and dispirited. The ALP could obliterate the Coalition in 2010, even amid high unemployment and continuing recession.

A lot of the media will miss this. Rudd is talking over them to voters. They’ll obsess about how the Government will gets its package through the Senate, as though that is the Government’s problem. In fact it’s the problem of the other parties.

But I also don’t want to be interpreted as suggesting that the measures are bad policy. I’m probably more critical of Kevin Rudd most of the time than not, but there’s actually a fair bit to praise about this package. Firstly, I disagree with the claim that this package is a back of an envelope thing – clearly it’s been worked over by Treasury for quite some time. The government’s communications strategy in keeping a tight lid on it (before fertilising the political ground) doesn’t mean that it was cooked up out of thin air yesterday. Everything we know – aside from what’s been said about the process in the Fin for example – suggests that’s not how they operate. If, as was suggested today, the Senate Committee wants to interrogate Ken Henry, I’m sure they’ll learn that and what assumptions went into it – which we already know – if anyone calmed down long enough to pay attention to the Treasury modelling about the degree to which it will stimulate GDP and the reasoning behind that modelling. It’s all out there already, and I’m also sure that the figures on retail spending for December would have been known at the time the package was finalised.

Secondly – to reinforce the point that it’s been designed carefully – from the responses from economists, there appears to be a fair degree of consensus that a focus on small ready to go projects plus a staggered cash injection is a good combination. The point’s already been made on the previous thread – but it’s worth repeating – anyone who knows anyone who works in a school will know that there are wishlists of “fix this now” put up constantly to state departments of education. It’s much easier to get these things up and running than to build a new hospital or a train line or whatever. And the assumption is that people will be more likely to spend a one off payment than $20 a week over a year – and that appears to make sense. Not to mention the fact that the quantum for the great majority of folk is higher than “bringing forward the tax cuts” would secure. And the point is to pump the money into the economy as quickly as possible while we wait for the infrastructure spend to come on stream.

Thirdly, the investment in social housing is very long overdue and very welcome.

I’m quite pleased with the package both politically and in policy terms – it’s a good Labor mini-budget. Sorry that Tories don’t like it – but hey, Howard lost the election, even if Malcolm et al haven’t really got their head around that.

On the politics, I think Bernard Keane is right – this is very close to being Malcolm Turnbull’s political suicide note. I think he’s probably toast. We’ve just seen a complex trap laid by that clever politician, Kevin Rudd, and Malcolm couldn’t have been more eager to walk into it. But, regardless of the politics, I think the package deserves support for all sorts of reasons. There’s no doubt, though, that it has changed the political equation in a very interesting fashion indeed.

It doesn’t happen all that often, but sometimes a political mistake does cruel the rest of a leader’s chances, and I note that Keane also picked up on the parallel I drew with Kim Beazley’s too cute by half 2005 budget stance. Malcom Turnbull’s whole tenure as Opposition Leader can be summed up as “too cute by half” – a lot of the time he’s been playing to two bit commentators in the Canberra press gallery rather than the electorate. I really think his ego has done him in. He can’t bear not to be at the centre of things, but right at this moment in time, when people are very worried about their economic future, he’s put himself at the centre of things with an incomprehensible backward looking message that will just translate as negativism. And ideology. At a point in time when people are paying much more attention than they usually do. It’s all manner of self-indulgent dumb, and I think we may well have just seen his “crazy brave” moment.

Update: Guy Beres on Turnbull’s play.

THE Opposition will vote against the Government’s $42 billion financial stimulus package, Malcolm Turnbull says.

“Someone has to stand up for fiscal discipline,” Mr Turnbull told the House of Representatives. “Someone has to stand up for levels of debt for future generations.”

Whatever the House Republicans can do, we can do better? Conciliating his own party? Trying to be relevant?

Turnbull’s decision reminds me of the biggest mistake Kim Beazley made – trying to block the tax cuts in the 2005 budget. The argument about fairness was complex. The then government said “he doesn’t want you to have money”. Eventually Beazley caved, but his poll numbers never recovered, and the rest of his career was a short prelude to its end.

Update: Turnbull makes his case.

Update: Bernard Keane on Malcolm Turnbull committing political suicide.

Overall, the main factors sustaining growth in living standards for American households outside the top 20 per cent have been an increase in the labour force participation of women and a decline in household savings. Over the period since 1999, consumption financed by borrowing against home equity has been the main factor offsetting stagnant or declining median household incomes.

If one wanted to be reductionist about it, the end of the capacity to prop up living standards via credit (and the increasing costs of healthcare and middle-class positional goods such as higher education) explains much about Barack Obama’s victory (and his victory in the suburban vote was a significant component of the overall win).

Quiggin is a little more confident about the political implications of the end of the trickle-down theory than I am:

Politically, the failure of the trickle-down theory seems likely to produce a resurgence of the class-based politics pronounced dead in the era of economic liberalism. The contrast between the enforced austerity of any recovery period, and the massive, and massively unjustified, excesses of the financial elite during the boom period, will produce a political environment where phrases like “malefactors of great wealth” no longer seem quaint and old fashioned. (Just after writing this, I Googled it, and found it as the title of a piece in Time Magazine’s Swampland by Joe Klein, among the most reliable indicators of the political zeitgeist.)

There’s no doubt that neo-liberalism was itself a class-based politics – of the right. Whether or not there’s a swing away from this hegemonic political position, though, is somewhat doubtful. The mild ideological dissensus Kevin Rudd has just highlighted in his essay in The Monthly is one reflection of a boader debate. In America itself, the intensity of the Republican opposition to Obama’s stimulus measures is significant (and not unexpected – despite the superficial political commentary to the contrary). I also have no doubt those who currently hold economic power will not give it up without an almighty fight, global financial crisis or not. The question is – which side are the Obamas, Browns and Rudds of the world really on?

scatterplot:

…the last time Democrats won 50%+ of the House popular vote: November 4. The last time the Republicans did? 1946. The graph of the House popular vote is rather telling… Yes, the policies of each of these parties are shifting/emergent. But I must confess that I read this chart with a degree of naive hope: that our brief experiment with conservatism is over. I can even imagine the tombstone:

Conservatism
1992-2004

<img src="http://larvatusprodeo.net/wp-content/uploads/2008/11/house-1942-date.jpg"

red state blue state rich state poor state:

<img src="http://larvatusprodeo.net/wp-content/uploads/2008/11/democrats-house-vote.png"

Myth #1: The Obama turnout meant that Prop 8 won in California.

But the notion that Prop 8 passed because of the Obama turnout surge is silly. Exit polls suggest that first-time voters — the vast majority of whom were driven to turn out by Obama (he won 83 percent [!] of their votes) — voted against Prop 8 by a 62-38 margin

- Nate Silver at FiveThirtyEight.com

Myth #2: The Democrats’ victory wasn’t comprehensive.

What happened? Overall, the Democrats gained a bit in 2004, a lot in 2006, and some in 2008. But we knew that (see the time series plot in the blog entry linked above). We also see a bit of scatter. Beyond this, yes, there are some patterns. In 2006, the Democrats particularly gained in Republican areas–see how those dots in the lower left of the second graph are way above the 45-degree line? In 2008, the swing is more uniform… Returning to the “How well did the Democrats actually do in 2008? question, I think that one problem is that people are comparing Obama’s vote to Kerry’s vote but then comparing the congressional Democrats in 2008 to the congressional Democrats in 2006. I think it’s more appropriate to compare 2008 to 2004 in both cases. As Paul Krugman put it, “Maybe the reason people don’t see this is that the Democratic House gains were spread over two elections.”

- Andrew Gelman.

Myth #3: Obama would be politically sensible to govern as a moderate gradualist.

So a serious progressive agenda — call it a new New Deal — isn’t just economically possible, it’s exactly what the economy needs.The bottom line, then, is that Barack Obama shouldn’t listen to the people trying to scare him into being a do-nothing president. He has the political mandate; he has good economics on his side. You might say that the only thing he has to fear is fear itself.

- Paul Krugman.