Shorter Paul Krugman: Herbert Hoover was right. Businessmen are too goddamn greedy!

Goddamn right they are. Uncle Paul tells it like it is, unlike the many times I’ve bitched or sneered at him (though mixed in, to be sure, with occasional gestures of praise). As Paul points out, all the supposedly “responsible” businessfolk, in favor of “sound” principles, have no problem with a single house of Congress, with a majority of five, no less, trying to impose its will on both the Senate and the President of the United States by threatening to blow up the U.S. Treasury unless it's allowed to unilaterally rewrite legislation passed by both houses of Congress and signed by the President.

This is not how Congress is supposed to legislate. But business doesn’t care. They want what they want—money in their pocket—and they don’t care how they get it. As Paul points out—and he could have emphasized it far more strongly—in 2011, when Obama was president and a Republican-led House of Representatives pulled the same stunt, big business—with visions of Social Security benefits cuts dancing in their heads—put furious pressure on Obama to make a deal with a bunch of double-dealing, back-stabbing thugs, aka the Republican Party. The famous Wall Street firm of Standard & Poor lowered the U.S. government’s credit rating from AAA to AA+, claiming that the budget deal wouldn’t reduce the deficit enough. When it was pointed out to them by the U.S. Treasury that their deficit figure was, well, $2 trillion too high, they refused to reverse their decision, inventing a new rationale for the old one instead. “Tacky” doesn’t begin to describe it.¹

The willingness of big shots to cheat and lie to get whatever they want is long, shameless, and shameful, as I’ve retailed in many posts, including Michael Bloomberg: Dumber than the Kochs? Or just more unscrupulous?, La Trahison des Milliardaires, and Ramesh Ponnuru is a great big jerk! Why? Let me count the ways. (a bit of a carom shot, to be sure, but I get there).

I do not believe the Republicans have any intention of negotiating honestly with President Biden. They want to wreck him, pure and simple. They want to because both House Speaker Kevin McCarthy and Senate Minority Leader Mitch McConnell know that if they don’t wreck Biden, the Republican right in the House will wreck the Republican Party. The Republican Party is already wrecked as an institution capable of functioning honestly in the conduct of the American system of government, but neither McCarthy nor McConnell, nor anyone else in the Republican Party, cares about that. All McCarthy and McConnell care about is keeping their jobs, and the only way they can do that is give the MAGA folks Joe Biden’s head on a platter.

If the Republicans won’t give Biden a clean increase in the national debt limit—and they won’t—he should defy them. Brad DeLong, not always my favorite UCal Berkeley economics professor, has some good ideas about how this can and should be done. Joe should listen to Brad, and tell Kevin and Mitch to go fuck themselves instead of him.

Afterwords
Why did Herbie baby say businessmen were too goddamn greedy? Charles Rappleye, in his excellent study, Herbert Hoover in the White House: The Ordeal of the Presidency, gives us a clue, recounting Hoover’s failed efforts to save Detroit’s banks from collapse in 1932, because Henry Ford refused to prioritize anyone interests other than his own:

Not only had Ford refused to help, his vow to pull his millions from whatever banks dared to open Tuesday morning meant that any new cash would simply be siphoned off to Ford. Emergency infusions would be futile. With that threat, Ford effectively killed the bailout, much as Andrew Mellon had in Pittsburgh a year before. Hoover had to wonder then, whether cooperation and capitalism could ever coexist.

1. From Politico’s “Playbook”, Aug. 5, 2011: S&P revised its deficit estimate down by $2 trillion. The share of debt-to-GDP changed substantially due to the correction. In particular, the statement about debt growing as a share of GDP throughout the decade was no longer true. Deficits came down by a significant amount. The trajectory of debt as a share of GDP went from rising to relatively stable. The new document pegs the deficit as a share of GDP at around 79 percent at the end of 2021 – using estimates Treasury believes are conservative. (A goal of fiscal policy is a stable debt-to-GDP ratio.) A rating agency compares a sovereign to other countries, and looks at trajectories and the forward path. The administration argues that all that changed, with the correction that was made. The administration contends that S&P removed some of the numbers from the analysis, and the justification became largely political – a very difficult framework for credit analysts to base a rating on. The earlier draft was much more numerically grounded, and the later one was much more politically grounded -- judgments about political climate. The administration will tell you there was NO ECONOMIC JUSTIFICATION for what S&P put out.