Sunday Open Thread [10.20.13]

It’s a glorious day outside! In case you are indoors today and looking for some interesting reading here are these possibilities:

The Republican Civil War — the Business Interests vs. the Teajhadis

“We are going to get engaged,” said Scott Reed, senior political strategist for the U.S. Chamber of Commerce. “The need is now more than ever to elect people who understand the free market and not silliness.” The chamber spent $35.7 million on federal elections in 2012, according to the Center for Responsive Politics, a Washington-based group that tracks campaign spending.

Meanwhile, two Washington-based groups that finance Tea Party-backed candidates said yesterday they’re supporting efforts to defeat Mississippi Senator Thad Cochran, who voted this week for the measure ending the 16-day shutdown and avoiding a government debt default. Cochran, a Republican seeking a seventh term next year, faces a challenge in his party’s primary from Chris McDaniel, a state senator.

That’s right — fight amongst yourselves. In the meantime, there’s this piece that I think is very true — The GOP’s Phantom Schism:

As Jonathan Chait and others have argued, there are real, honest-to-goodness distinctions to be drawn between Tea Party Republicans and the G.O.P. establishment, but they boil down, almost entirely, to tone and tactics. On the big questions, the G.O.P. remains a very small tent. Consider this tale of the tape by FoxNews.com, breaking down the issues said to be dividing the party. On the debt, “Tea Partiers want to balance the budget [and] end runaway government spending.” Don’t mainstream Republicans want that, too? “Republicans aren’t opposed to those demands,” Fox concedes, but wonders whether they really mean it. On the size of the federal government, the Tea Party would prefer theirs smaller, please. Mainstream Republicans? Yes, them, too. On tax cuts, “Tea Partiers and mainstream Republicans agree.” On Obamacare, “Tea Partiers want to defund, repeal and replace the law,” while mainstream Republicans, Fox reports, “have echoed similar sentiments.” At this point, the G.O.P. civil war is sounding less substantive, and certainly less dangerous, than the East Coast–West Coast hip-hop feud of the nineteen-nineties

Because no matter which group of Republicans you are talking about, daylight between them in terms of their small ideas and essential selfishness isn’t much. Note also, that they’re still mostly in lockstep voting in Congress — it is only over the government shutdown that they’ve splintered and that was about tactics and strategy more than anything. It isn’t as though we’ll see a compromising GOP caucus over a budget by December 13, IMO.

For a good discussion on how the issue of deficts largely masks ideological pushes to cut taxes, see Barry Ritholz — Tax Rates, Inequality, and US Deficits:

Their approach to this philosophy, however, is far less intellectually honest. Rather than having a full on debate on that subject — a debate they are likely to lose — they have chosen a very different approach. This time around, they made the deficit a proxy.

Because of what I do for a living, I found this offensive. Deficits impact fixed income, an important part of portfolio planning. They impact available credit, capital for investment, in a broad and varied way. Hence, the deficit is a genuine issue, a real problem that should be addressed in a mature and responsible way. It can be easily solved using intelligent solutions, but for the ideologues in Washington DC (and elsewhere) who refuse to treat it as the basic mathematics and accounting problem it actually is. The way the Tea Party and others have treated the deficit reminds me of the approach Meredith Whitney took to Municipal Debt. Both groups are stunningly ignorant about their subjects, while possessing the skills to allow them to exploit the topic, hog the spotlight for themselves and other tangential pet issues.

The Tea Party, like Whitney, turned an important question of debt and credit and solvency into one giant PR clusterfuck.

Go read the whole thing. Even the comments are mostly good (as is the habit at this site), so do yourself a favor.

What interests you today?