Political Bubbles

What a confused mess. We're not yet out of an economic crisis and already we're stumbling headlong into political crisis. Political and economic crises go hand-in-hand, with much the same causes, the same paths of destruction and similar cures. The cure for an economic crisis is the injection of money. The cure for a political crisis is the injection of faith and trust. We can create money; finding faith and trust among our politicians is going to be a little harder. Crises have their beginning when people systematically overvalue some bundle of assets. We call that a bubble. People think they are richer or more powerful than they actually are. Homeowners start using their houses as an ATM; politicians start working on their legacy. Then something like rising home foreclosures or an unexpected lost election exposes the underlying lack of value. The market reacts, the bubble bursts and we have a crisis. Markets freeze up because no one knows the value of goods and services, physical assets or financial instruments. Or, in a political crisis, the government shuts down. Bursting bubbles usually come as a surprise. President George Bush was going to spend the political capital he earned from winning the Iraq war and his reelection to privatize Social Security. His bubble was like your overvalued house in 2005. Pres. Barack Obama and the Democratic Party won big in 2008, taking both houses of Congress, the presidency and looking to appoint Supreme Court justices. President Obama obviously thought, much like President Bush, that he had a wealth of political capital to spend. In the battle for the Affordable Care Act and the next election, he learned that he did not. It was the political bankruptcy of the national Republican Party that allowed the election to the presidency of this young, untried African-American. Unfortunately, for recent presidents and for all of us, political capital has been evaporating out of our system for some time, maybe as far back as president Richard Nixon. The bubble nature of our politics has been growing over that length of time. The political debacle that was Speaker Newt Gingrich and the impeachment of Pres. Clinton exposed that overall political weakness. No one at the time saw that it was a systemic lack of faith and trust. The terrorist attacks of 9/11, Iraqi and Afghan wars and the economic crisis masked only for a while the political bankruptcy that engulfed the presidency and all of government under George Bush. Now, every time Pres. Obama tries to use his political capital, it isn't there. The pundits then proclaim he is presiding over a damaged, ineffective presidency. The problem is not his presidency, it's the lack of power in the system. The bubble is government-wide and Congress likewise is bankrupt. Just as stagnant wages, a sharp increase in personal and government debt, the housing bubble and Lehman Brothers bankruptcy preceded the full-blown financial crisis, so the present political chaos shows the same kind of buildup to crisis, political bankruptcy and government shutdown. At first the Congress could not pass a budget and now it can't pass any law. Attorney General Holder can't jail felonious bankers. The SEC can't prosecute blatant fraud. The Federal Trade Commission can't enforce the antitrust laws. No one can curtail the president's use of military force abroad in drone warfare and kidnappings. Nor can they control his extralegal surveillance systems at home. The lack of political capital is now obvious. Our present crises with the shutdown of the government, the perverse cut in spending called the sequester, the startup of the Affordable Care Act, the meaningless debt ceiling and possible dollar default are not real economic problems. Our economy is productive enough to handle any and all of them. They are political problems conjured up only because politicians do not have enough faith and trust in themselves or the electorate. In a political crises, the electorate needs an injection of faith and trust from someone they can believe in. We need a charismatic leader even when this is where demagogues and dictators can sneak in. And don't tell me it can't happen here. It can. Men like Sen. Ted Cruz or Gov. Rick Perry, to pick on mouthy Texans, both when they are patriots and when they are plotters, seldom accept that their power is limited. Nor can they identify with the common man. Sen. Schumer of New York, to add a Democrat, is the same stripe, all bought and paid for. Give me a quiet sincere man like Sen. Richard Durbin or a determined woman like Sen. Elizabeth Warren or Sen. Olympia Snowe. These are people neither supported by nor addicted to money, ideology or power. They become fewer and fewer. When we have no faith in our government, little political capital remains in the system. The convergence of the bubbles we worry about – the shutdown, debt and deficit, possible default – promise an ongoing crisis. They also show how little time is left before the people start looking for a "strong man."