Power & Market
They’re still at it! Every month the balance shrinks by many billions of dollars. In conjunction with the support of the mainstream media, the Federal Reserve continues spinning its tale of employment, (price) inflation, and Quantitative Tightening (QT).
The current balance sheet level of $8.4 trillion has not been seen since 2021.
Last month’s QT countdown ended January 4th. Since then, the balance sheet decreased by $74 billion dollars. From Jan 4 to Feb 1, the reports come out every Thursday, the US Treasuries (UST) balance decreased by $60 billion and the Mortgage-Backed Securities (MBS) by $17 billion.
Eight months of official QT is a firm commitment requiring the media and intelligentsia support. The media’s role in reiterating the narrative is vital to success: initially to create expectations and then to provide a rationalization; as Reuters recently has done:
The U.S. Federal Reserve is likely to need at least two more interest-rate hikes, lifting the benchmark rate to above 5%, to slow an unexpectedly strong labor market seen as contributing to high inflation.
According to one of the world’s most read news sources, the high inflation we’re experiencing is due to an “unexpectedly strong labor market,” literally, they claim prices are rising because people are working.
Should we believe the data:
… the unemployment rate fell to 3.4%, the lowest in more than 50 years.
The mental gymnastics are astounding. On one hand, labor statistics are practically fraudulent, such as removing discouraged workers from the data to make the stats seem better. However, should we believe the data, then this must be the hottest jobs market in half a century, creating a workforce so strong it leads to increases in prices for all! Therefore, we should warm up to the idea of having more people out of work, so that prices come down again.
This backwards logic was confirmed by Oxford Economics Chief US Economist, Ryan Sweet:
While the Fed welcomes any signs of easing wage pressures, the pace of growth in average hourly earnings is still too strong to help lower inflation.
And so, if the Fed, the mainstream media, and mainstream economists are not going to blame COVID, Russia, or themselves for the broad increases in prices of goods and services, then surely it’s out of control wages, or too many jobs creating the problem.
Ultimately, the boom always leads to the bust. The way things are headed, the increase in rates and shrinking of the balance sheet will ensure their precious plans will come to fruition. Much like those decades of stubbornly low inflation that was finally overcome by out of control inflation, expect higher unemployment and less wage growth soon enough; then they’ll comfort us by saying it was all part of the plan.
After raising rates as expected, Federal Reserve Chair Jerome Powell addressed the nation this week without referencing Ukraine nor the Pandemic as the cause of (price) inflation. Perhaps the start of a new year gave a reason for the change, or maybe he’s looking to start a new narrative soon. It’s difficult to determine as he continued in Fedspeak, avoiding real answers during the Q & A; that is, until he was pressed about the debt ceiling:
OK. So, I feel like I have to say this. There's only one way forward here, and that is for Congress to raise the debt ceilings so that the United States government can pay all of its obligations when due.
Raise the debt ceiling, so new debt can be created to pay off old debt. Astounding!
If any adverse consequences, negative externalities, or other far reaching consequences exist with this plan, Powell is either unaware or unconcerned:
… any deviations from that path would be highly risky and that no one should assume that the Fed can protect the economy from the consequences of failing to act in a timely manner.
Reminding the world:
In terms of our relationship with the Treasury, we are their fiscal agent, and I'm just going to leave it at that.
It’s a self-reference not often acknowledged; but he’s not wrong. In a paper published by the Fed in 2000, when their balance sheet was under $700 billion (compared to today’s $8.4 trillion) and when much of what the Fed does currently would be considered unfathomable, they wrote:
The Federal Reserve Act of 1913 provides that the Federal Reserve Banks will act as fiscal agents and depositories of the United States… As fiscal agents, the Reserve Banks support the Department of the Treasury with services related to the federal debt. For example, they receive bids for auctions of Treasury securities to finance the debt and issue the securities in book-entry form.
Few mysteries, yet many peculiarities in the way a central bank works. But one such instance is when this same fiscal agent becomes the bidder of last resort, holding debt on its own books via a roundabout method of purchasing US debt through banking intermediaries to skirt the law. Of America’s current $31.5 trillion debt, this fiscal agent owns $5.4 trillion, or roughly 17%.
Why these fiscal or monetary restraints were initially put in place is worth questioning. One could argue their creators genuinely thought a debt ceiling would control the level of debt, similar to how a central bank controls the national purse. However, we mustn’t be naïve.
Debt ceiling debates are not much different than Powell’s press conferences, providing a little bit of show, the proverbial bread and circus to appease the masses. But ultimately, the debt ceiling will go up, the debt level will go up, and soon enough, the Fed’s balance sheet will go up. This will be supported by Treasury's fiscal agent who will swear to us that Quantitative Easing is the only way forward.
The Wyoming State Senate today voted 16-15, on a bipartisan basis, to pass a bill prompting the Wyoming state treasurer to hold gold and silver “specie” to protect the state – as well as establish a process to receive certain tax payments in specie.
Introduced by Senator Bob Ide (R-Casper), SF 101 amends and further implements the Wyoming Legal Tender Act, a popular 2018 law that had removed all tax liability from gold and silver transactions and affirmed that the monetary metals are legal tender in Wyoming.
Senate File 101 prompts the Wyoming state treasurer to create a formal system to deal directly in constitutional money – a system that would also include holding gold as an asset to help the Cowboy State hedge against its high exposure to Federal Reserve note dollars and potentially invest in precious metals leases and bonds.
The Department of Revenue could receive mineral tax payments denominated in specie, i.e. gold and/or silver. And in executing its duties, the state treasurer could hire precious metals firms that are experts in receiving, authenticating, exchanging, and storing gold and silver.
In specific terms, the bill requires the Wyoming treasurer to implement the Wyoming Legal Tender Act by:
- Authorizing the use of specie and specie legal tender for the payment of mineral taxes, subject to authentication procedures as determined by the state treasurer that are consistent with precious metals industry standards;
- Determining, maintaining and publishing market-based exchange rates between specie, specie legal tender and other legal tender currencies on a real‑time basis on the website of the state treasurer for the purpose of calculating tax payments to or from the state.
- Exchanging specie and specie legal tender for other legal tender currencies;
- Holding specie and specie legal tender;
- If market conditions warrant, investing in precious metal leases or bonds payable in precious metals.
Wyoming has vast natural resources, and the Department of Revenue receives significant tax revenues from producers of commodities such as oil, gas, and metals.
By creating a mechanism which enables Wyoming to receive tax payments – or to potentially make payments – in gold and silver, the Cowboy State would establish an alternative unit of payment in the face of a Federal Reserve note that continues to be devalued.
In his testimony before the Senate Revenue Committee last week, Sound Money Defense League policy director Jp Cortez said:
Proposals encouraging state gold holdings have come before the legislature since January 2019, but no bills have been passed. During the last four years of inaction on sound money, gold bullion, priced in declining dollars, has risen by 50 percent.
Given the financial risks facing the U.S., Wyoming should take these modest steps toward creating alternative ways of transacting and saving using sound money.
Since 2018, Wyoming has established itself as a leader on sound money issues, as evidenced by the Cowboy State’s first place finish in the 2023 Sound Money Index.
After passing the Senate, SF 101 now heads to the Wyoming House for further consideration.
The protests that took place in Brasilia earlier this month perfectly exemplify the established dynamics of domination. Bolsonaro's supporters not only made the mistake of trusting in politicians, but in the armed forces that, when necessary, fight to maintain the same power that oppresses them.
Under the illusion of the security forces serving the population, for months, protesters have pleaded for military intervention to "save Brazil" from the threat of communism and authoritarianism. In reality, the security forces perform the security of the elites, shielding them from the threat posed by the population they command. They are armed hands used to guarantee the continuity of exploitation.
The democratic process maintains the illusion of decision-making power to the subjugated people. Under the illusion of politicians being more than human, transformed into figures to be worshiped, the images of saviors and great leaders with the ability to guide and save the nation and the people from evil are projected onto them. Hope is fundamental for the maintenance and perpetuation of the system of domination, because under the veil of hope, power remains mostly in the same hands and with the same fundamental interests. The feeling of revolt is also something natural in democracy, because it, as well as the hope for a better reality, serves as a motor to keep the system alive, because any problem can be resolved in the next election process.
What we saw on Sunday in Brasilia were confused individuals expressing their anger at the destruction of state patrimony. Since all state heritage is illegitimate, following its very existence, the acts of destruction did not violate the ethics of property, but neither were they effective in achieving their proposed goals. Nor could they have been. The claims were never about freedom, nor even a criticism of state institutions, but only of their temporary occupants.
The physical destruction of buildings and facilities belonging to the state may be a symbolic act to represent discontent, but the real power of the state lies in the minds of the people who support it, no amount of physical destruction will be effective in eradicating an evil that actually lives inside each person who believes in it.
Sunday's acts, besides being useless for the advancement of freedom, have justified actions that will promote exactly the opposite. The effects of what occurred will further strengthen state power, just as it did during the recent pandemic. One now accepts what would not have been accepted before. The boundaries of state action are extended when justifications are found for its expansion.
Thus, even if slowly, the state is strengthened and more deeply consolidated in life and social contexts. The potentiality may already exist, but the consolidation only comes with the actualization of the multifaceted illusion under which the new reality of power is accepted.
Now, with the justification of ensuring the security and democratic process of a rule of law, increases in the existing level of censorship will be more easily tolerated, as well as increased monitoring of electronic communications and arrests of dissidents. The media, the informational arm of the established power, will, at every possible opportunity, classify this acts as terrorist or vandalism carried out by extremists and coup plotters, in order to implant the idea, raising the gravity of the problem, that a state solution is justified and must be established.
True liberation will only come when hope in the state ceases to exist.
We just concluded a national, state and county election season where crime and economic volatility were at the forefront. These issues are likely to occupy the minds of voters in municipal elections across the country this year.
Though economic stability is more important to public safety than it’s often given credit for, it’s not quite the deterrent as a perp knowing that the good guys can protect themselves. A recent altercation here in San Antonio is a good example.
While working in a smoke shop in my area of town, a clerk was confronted by a would-be thief who entered the store and hopped the counter. No doubt a startling turn of events, the clerk was ready.
The failed robber was later found wearing bullets from the clerk’s gunshot as change for the business he actually got at the store.
We Americans are blessed to have the human right to defend ourselves enshrined in the constitution. Guns are however, admittedly intimidating. There’s no playing around with them. As such, many people choose not to carry, or even own them, and that’s OK. That’s their prerogative.
But none of us should allow hypocritical politicians to pack heat, or have taxpayer-funded bodyguards, while they turn around and restrict how we protect ourselves. And it’s not only that we’re protecting, but also our freedom.
That’s a notion that has proven far more fragile in public officials’ hands in the last few years than previously imaginable.
When we’re born, there’s a world of opportunity before us. Unfortunately, that starts to erode once we’re ready for kindergarten.
The vast majority of us are limited to one degree or another, to attending the closest K-12 schools that take our property taxes for funding. While wealthier families are able to eat that bill and send their kids to private schools, or homeschool them, too many of us are stuck in low-performing schools.
In adolescence, kids are then hindered from entering the workforce by measures like the minimum wage. An employer cannot afford their lack of marketable skills at the government-mandated rate. Therefore, the opportunity for young, prospective employees is delayed.
And that’s just one government impediment: employment taxes, mandated leave, favoritism shown to bigger competitors, etc. This reached a natural conclusion, in brutal fashion, with the lockdowns of recent years.
When we face this constant barrage of regulations and taxation, the cost of choosing a life of crime goes down. People may not think about it in those terms. However, when this way of life is ingrained almost from day one, how can they be expected to?
Many criminals are simply bad apples, but government creates its fair share, too.
More immediately problematic is making the cost of actually committing a crime lower. That is the effect some portions of “cite & release” programs have.
Imagine two children playing with their toys. one walks over to the other and snatches a doll out of her hand. The parent responds in one of two ways: the aggressor gets a “verbal warning,” or is put in a corner after being scolded.
Which reaction is more likely to result in a repeat offense, and which one is more likely to end up with better behavior?
Stealing a few hundred dollars’ worth of merchandise, or running off without paying computer repair, shouldn’t result in the same penalties as assault, murder, etc. But when the perpetrator spends no time behind bars or is not compelled to make his victim whole again, we’re likely to see more aggressions.
Even if such policies persist, we should give more thought to simply increasing law enforcement.
A lean police force
A key to any peaceful, prosperous society is an enforceable rule of law, and the protection of property rights. A disciplined police force has a part to play.
A police presence gives many citizens, regardless of demographic, peace of mind. It allows them to go about their business, engage with others socially and/or commercially. When and if things go sideways however, we’re our own first line of defense (see above).
Ideally, the police are there to deescalate and investigate. It’s important here to remember that they are under no constitutional duty to protect us. The events in Uvalde were a stark reminder of this.
That’s just one reason we should be cautious when calling for more police officers, especially when some police chiefs say they’re well-staffed already.
Moreover, to the extent that opposition to (recent) council policies exists, do we want greater enforcement of them? As pro-government forces fatten the budget, milk the taxpayer and expand the city’s reach, do we want to contribute to and enable that?
Like the citizenry they serve, most police officers are solid folks. What happens though, when they’re replaced by more “mental health” officers? We’d end up living out the movie “Demolition Man,” with future governments putting the muscle behind tax collection to they make sure to get theirs.
In a way, this implicitly signals surrender on trying to correct criminal behavior at its source.
We do our best by our kids. We rightfully see them as an opportunity to make society better. We correct bad behaviors. We educate them. We make sure they’re respectful.
It’s inevitable however, that some tragically fall through the cracks, and are then more likely to veer off onto the wrong side of the tracks. This is where we have an opportunity to step up.
Mentoring or fostering kids can make a difference. Some heroes go so far as to navigate the adoption process thicket to give kids in troubled circumstances a new life. It doesn’t even have to go that far.
Some families with a gaggle of their own to look after have an open-door policy where their kids’ friends can come and go almost at will. If these friends have issues they’re trying to escape from, a welcoming, harmonious household can show them the possibilities and offer hope.
We need to start digging deeper to radiate that harmony more broadly, rather than deal with the predictable outcome of giving policymakers more power.
Ryan McMaken of the Mises Institute joins Scott to discuss the ill effects central banking has on the country. McMaken wrote an article recently pointing out that the Federal Reserve, America’s central bank, is technically bankrupt. Scott has McMaken explains how that’s true and why the costs of a bankrupt Fed are felt by us all. Scott and McMaken also address some common points about inflation made by the left and examine what they get right and where they go wrong. The two also look at today’s economy to try and work out where we are in the boom-bust cycle.
Discussed on the show:
With January’s world elite submit in Davos wrapping up earlier this month, members of the World Economic Forum (WEF), who publicly celebrate their infiltration of governments across the globe, continue to do what they do best, i.e. intervene in the market for the purpose of destabilizing the world with ominous projects like the Great Reset.
Their predictions begin with a recession in 2023:
A global recession is seen as likely by two-thirds of respondents to the World Economic Forum’s Chief Economists Outlook…
Surely, everyone should anticipate a recession by now, but maybe not? Further details are provided:
…expect growth to drop to 1.9% this year from 3% in 2022 because of intersecting crises such the Ukraine war, surging inflation, debt tightening and the climate emergency.
Take a moment to consider just how much the average person, not just in America, but the entire world, is forced to pay for that which they have no business in, no part of, and no desire to support. Notice some of the problems ahead:
The War in Ukraine costs billions of dollars. You may sympathize but unless you have family or loved ones in the region, you likely don’t feel directly responsible for its funding.
Primarily due to the Federal Reserve printing trillions of dollars a few years ago, “surging inflation” was exacerbated by governments forcing a worldwide economic shutdown during the same time period.
“Debt tightening” is something no one should hold their breath on. If there has ever been a documented case of government showing spending restraint through monetary/fiscal policies, those instances have been few and far between.
The following chart highlights America’s debt and debt ceiling problem since 1970:
Few things in life should be given a 0% chance of ever happening; but if anything is to be assigned a probability of zero, it would be debt tightening. Per the chart, there is absolutely no historical evidence that managing the debt was ever possible. The advent of the Federal Reserve ensured debt management would never be something the country could handle.
Rounding out events to anticipate in 2023: “climate emergency.” Likely a costly endeavor; how much money will be needed to fight climate change? And, how will this impact the economy? This has yet to be seen.
What is seen is the unimaginable central planning power wielded by a handful of elected and unelected officials, whether through war, money (debt) creation, or other schemes such as climate change. The average person, Sumner’s The Forgotten Man, is funding a great deal that has nothing to do with them.
The WEF’s list provides plenty more risks and unpleasant events; this was only some. But at the conclusion of their summary of existing and potential economic problems, which they are largely to blame, they ask:
Can central bank digital currencies help stabilize global financial markets?
The unequivocal answer is and should always be a hard “no.” Central planning had its shot in the 20th century and failed miserably. Unfortunately, so few seem to remember, or care. We’re almost a quarter of the way into the 21st century and, so far, the role of the central planner has only gained in stature. We can only wonder how many more times humanity must saddle the brink of collapse due to the precious plans of a few.
There are some excellent podcasts regarding the WEF that warrant a listen. The Human Action Podcast topic was Davos: Has Globalism Peaked, Radio Rothbard discussed How the Fed Fuels WEF’s Managerial Revolution, and Michael Rectenwald wrote an interesting article titled: Mastering the Future: The Megalomaniacal Ambitions of the WEF. It’s probably also a good idea to read the WEF’s website for good measure, since it’s good to know the direction in which they intend to nudge or overtly direct society. Or, if nothing else, to at least consider the 5 reasons why eating insects could reduce climate change. Much can be learned from the WEF, especially that the best place to keep a conspiracy, in fact, is in plain sight.
The idea that billionaires would gather behind closed doors and discuss the fate of the world is no longer conspiracy. The more you read, the more you’ll see. The plans are laid out in plain sight.
Take a look at this chart from the World Economic Forum (WEF) itself. Notice anything strange (hint: top right)?
Central Bank Digital Currency (CBDC) was undoubtedly on the agenda at this years’ meeting in Davos. Here is where one must maintain a keen eye. When they discuss risks surrounding cryptocurrency, like custody, they provide neutral points and maintain an air of uncertainty. Per the chart above, they’re not stating a conclusion, but merely showing how risk is reduced the higher up one goes on the scale.
Self-custody was once the safest way to store your crypto. Looking at this chart, if a central bank offered custody of “your” CBDC, it would offer an even higher measure of security.
They’ll try to convince you by claiming they spent a lot of money, time, and expertise exploring the issue of digital money for the “public’s interest.” Nonetheless, no different than a scientific research paper, we must ask, who funded the project?
Over the past year, an interdisciplinary research team funded by the Bill & Melinda Gates Foundation…
If Bill Gates can influence the future of CBDCs the same way he has the scientific, medical, and drug market, then we’re in for something spectacular in the future.
And this future could be just around the corner. According to one of the experts at the World Economic Forum:
Over the next four years, we should expect to see many central banks decide whether they will use blockchain and distributed ledger technologies to improve their processes and economic welfare.
Four years from now seems a lifetime away, especially when most people in the wealthiest nations on earth are living paycheck to paycheck, struggling with an ever-increasing cost of living, and very little about the future looks promising. Yet, one day, CBDCs will be implemented.
…built a global community of central banks, international organizations and leading blockchain experts to identify and leverage innovations in distributed ledger technologies (DLT) that could help usher in a new age for the global banking system.
The plan is progressing quite nicely too! They have no problem saying:
We are now helping central banks build, pilot and scale innovative policy frameworks for guiding the implementation of DLT, with a focus on central bank digital currencies (CBDCs).
The difficulty is that as of yet, these ideas are still intangible to the public. There is currently no functioning Fedcoin. If we are cashless, it is only by choice. Individuals cannot hold a deposit at the Federal Reserve.
But just because the world looks like this today, doesn’t mean it will look like this tomorrow. Everything the WEF publishes, these meetings in Davos, and whatever the response to the next crisis will be are all designed to move the masses away from liberty, freedom, privacy, security, and autonomy, to be handled by another. They market whatever it is they’re doing as a public service. The reality is anything but. Society has seen this before, many times and in many forms.
Unfortunately, by the time CBDC hits the front page, by the time society has become officially cashless, and by the time you're forced to accept a salary, or pay debts in Fedcoin, held in custody at your local Federal Reserve branch, it will be too late. It’s like waiting for a tornado to touchdown on your front porch; you know it’s coming. It’s just a question of how bad it will be, whether you’ve prepared for it, or whether you’ve left town completely.
As reported by CNBC last week, the Consumer Price Index (CPI) figure of 6.5% shows how the mainstream media disseminates false economic information for consumption by the masses. Try to spot some of the more concerning parts:
Initially, the chart raises questions such as where this data comes from and who participated in the sampling. Once the data was compiled, how did statisticians determine what constitutes the “average” egg, frankfurter, or new vehicle?
In another article, CNBC tries to explain:
CPI is the most closely watched inflation gauge as it takes into account moves in everything from a gallon of gas to a dozen eggs and the cost of airline tickets.
As discussed on multiple occasions, calculating (price) inflation is the Art of Moving the Goal Posts. Consider the impossibility of comparing gas, eggs, and an airline ticket. Adding them up and dividing by 3 would not produce meaningful results.
However, if weights of relative importance were assigned to every individual item then apples could be compared to oranges, mathematically. Of course, statistical calculation doesn’t equal sound logic. In addition to using highly subjective guess work to arrive at these relative weights, other tactics such as adjusting for seasonality or simply excluding certain items if they’re “too volatile” are employed to massage the CPI.
Consider the two images below, the first being the latest snapshot of the CPI data showing the relative importance:
Now compare the relative importance from almost a year ago:
According to the charts, since last year, food has become less important while energy has become more important. Unfortunately, we live in a society that values statistical calculation and the ability to draw upon data more than reasoning.
Rather than argue with merits or lack of logic itself, mainstream economists found that the best career move is to not fight for the truth, but embrace the data, flaws included. This leads to Fedspeak like this excerpt from Andrew Hunter, a senior economists at Capital Economics who told CNBC:
The huge amount of inflation we had from rising gas prices has now almost completely reversed.
It’s one thing to say (price) inflation has slowed in recent months, but to claim “almost completely reversed,” simply makes no sense. The average person could only wish that prices have reversed, meaning price decreases, but this is not the case. At best, we can hope for a slowdown in the rate of increase.
He’s not alone in his inflation elation. In the same article, Mark Zandi, chief economist at Moody’s Analytics said:
I don’t think people will be talking about inflation this time next year.
And despite the skyrocketing price of eggs as purported by the abundance of memes on social media, he went so far as to say:
I think it’s already starting to feel better for people.
Naturally, Moody’s top economist is in a much higher income bracket than the average person; so his perspective could be skewed.
Ultimately, the biggest red flag is waved, not by the data itself, or the economists whose job it is to cheerlead the Fed and its support system, but it comes from this:
Inflation closed out 2022 with a 6.5% annual reading, as measured by the consumer price index, the U.S. Bureau of Labor Statistics said Thursday. It was in line with economists’ expectations.
Given the countless data fields and inputs, including relative weights of importance required to arrive at the CPI figure, how is it conceivable that economists’ expectations matched that of the bureau of labor and statistics?
Either these economists are really that good, or this data is really that bad.
It took 15 votes and a host of concessions to the Freedom Caucus and its allies, but Kevin McCarthy (finally) became Speaker of the House. Of course, the real length of the delay (in McCarthy’s eyes anyway) was much longer than the three days last week. Afterall, when John Boehner abruptly stepped down in 2015, McCarthy had been the heir apparent. A similar lack of support among the more hardline fiscally conservative members, however, resulted in the elevation of Paul Ryan to the top job in the House.
With Steve Scalise and Jim Jordan lurking in the prospective background, McCarthy initially talked tough: in a speech before the first vote he demanded the members loyalty, saying he’d “earned” the job.
A few embarrassing votes later, and the necessary concessions came on like a flood.
Frankly, there is a lot to like:
Apart from the fact any member may now precipitate a vote to vacate the chair, in the new House all income tax increases will now require a three fifths vote; general spending cut amendments will be allowed; no unauthorized appropriations may be increased; and, perhaps biggest of all, any increases in mandatory spending must be offset immediately by equivalent cuts.
Or, as the Washington Post put it: “The Terrorists Have Already Won.”
Gross hyperbole aside, the now-familiar debt ceiling standoff later this summer looks set to be a big one. McCarthy has, rightly, never been trusted, and his concessions to secure the job of Speaker rendered him effectively impotent. Whatever he and his allies may think they have cooked up to get out of the debt ceiling fight, they are mistaken.
It will be a fight, or it will be his job, and if Kevin McCarthy has proven one thing over the course of his time in D.C., it is that he will do anything for power.
Already looking ahead, Republicans and Democrats are openly mulling the parliamentary technicalities that might be exploited to avoid a government shutdown or default. A discharge petition, for example, could theoretically advance the bill directly to a vote over the objections of the Speaker.
McCarthy would no doubt be grateful.
It had been before the Civil War that an election for Speaker took longer than it did for the 118th Congress. Should he face an attempted ouster (likely), McCarthy will make history again as the first to face a privileged motion to vacate the chair in a century.
Recognizing his predicament, some Democrats are already speaking openly of the next debt ceiling fight as an opportunity. With Biden already saying he “refuses to negotiate” and that the debt ceiling must be raised “without strings,'' Democrats seem to be banking on a repeat of the experiences of both Clinton and Obama, who benefited politically from their respective standoffs and shutdowns.
A long shot, but not unimaginable scenario given the narrow margins in the current House, is Hakeem Jeffries winding up Speaker before the year is out. There are still a number of Tuesday Group Republicans in the House, and in the event of a stalemate some of them in purple districts might be tempted to jump ship in order to save themselves.
Such political consequences are impossible to predict with any certainty, and so only time will tell. However, for their part those committed House Republicans should stick to their guns: government spending needs cutting and the debt needs reducing.
As a parting observation, the revolution continues to eat its children: Just as Gingrich came to be viewed as too willing to compromise by his own protégés, such as John Boehner, Boehner in turn was forced out by his own more hard-edged newer colleagues, like Jim Jordan – who, surprisingly, threw his critical support behind McCarthy in his final bid.
In an alternate universe, Jim Jordan headed the conservative opposition to McCarthy in his bid for Speaker, and the California Republican never got to move his things back into the Speaker’s office he had presumptively occupied.
As things stand, the Kevin McCarthy of this universe shouldn’t make himself too comfortable.