Nothing complicated here. In order to strengthen his hand in negotiations, the president’s decided to try to kickstart a hopefully not-too-damaging market sell-off over the debt ceiling. The more the Dow drops tomorrow, the more Boehner and other moderate Republicans will think twice about letting this process play out all the way up to the deadline on October 17th. And if the market doesn’t dive sharply enough — maybe “only” 200 or 300 points — he can always nudge it again next week with more dire rhetoric. It might take losing a thousand points or even two, but damn it, if that’s what it takes to teach these tea partiers not to scare the hell out of markets by behaving irresponsibly, then oh well.
The irony is, some of the GOP’s critics have said, not without reason, that some damage from hitting the debt ceiling might be incurred before we actually hit it if investors lose faith that this is just brinksmanship and that the two sides will make a deal before the debt limit is reached. Well, here’s O telling them: Yep, your faith that the United States will certainly meet its credit obligations might be misplaced. And his party will forgive him for it, of course. Just two days ago, the Times published the latest in an undying series of liberal commentary calling on Obama to ignore the law and raise the debt ceiling himself, either via the Fourteenth Amendment or by, ahem, minting a trillion-dollar platinum coin. What’s a little market panic, which of course will be blamed on Republicans, compared to “solutions” as drastic as that?
No one wins from a President trying to talk Wall Street into a crisis. Bad if markets tank. Bad if markets ignore a president.
— Adrian Gray (@adrian_gray) October 2, 2013