The US credit rating dropped and the global equities market took a tumble. Congress itself has record low approval ratings, as some have equated their capacity to make decisions to five-year-olds flinging poo. I think it’s safe to say, boy, the US has shot itself in the foot this time.
Usually, I would say this with some irony or even some humour because I live in Canada. I can laugh off the lack of social liberalism, the corrupt politics, and the general ineptitude of the US House and Senate. The economy is a different matter. Canada is tied at the hip to the United States, since they buy over a third of the country’s exports. If they take another hit and the manufacturing sector goes, so does Canada’s. On a personal level, that means my livelihood, and the livelihood of my friends are determined by the decisions of a few men in Washington. That’s the global market for you. Anyway, so here’s me being overly cautious and staring at the news in the hopes this is something superficial.
However, a lot of people are asking how did this happen, and I’m think it’s pretty simple. Until recently, the Democrats and Republicans have been playing different ball games. The Democrats started expecting the Republicans to play fair, and you know, be decent human beings. They didn’t anticipate their steadfastness to nigh ridiculous ideals, like somehow repaying debt without increasing government income. John Stewart on the Daily Show posited that the Democrats should have been more aggressive during early legislation in December and should not have given the Republicans the opportunity to strike back like this. This is true, but again, they didn’t anticipate the Republicans holding the debt ceiling against them like a gun to their nads (though whether they should have predicted this is a different matter altogether).
In my opinion, the only reason Obama signed the Republican solution to the debt ceiling was to play the blame game. See, if the country defaulted, then that becomes the fault of the President, and his lack of ability to negotiate and compromise. However, if they simply make a poor deal, that’s due to the policy makers who were pushing the wrong end of it. Thus, come reelection time, Obama can point to this embarrassing defeat and say that it wasn’t his fault, and push the blame on the Republicans.
In short, it’s very smart kids yelling and screaming at each other, until the loudest screamer kicked the other in the balls and threw him across the room. And then Obama stood up and appeared as the better man.
What should Canada be doing? Well, we have our own political issues to deal with, but right now, I think Harper’s doing the best thing he can. He’s going on vacation in South America. Okay, so it’s not really vacation, but Brazil is an emerging market that is growing fairly quickly. Some estimates say that Brazil is going to be one of the next big powers. While for now that is probably just wishful thinking, it is a great regional power, and Canada needs to start building stronger economic ties with other countries. Plus, it wouldn’t kill Harper to get a tan while he’s there.
