Wall Street may not react much, says the New York Times' Michael Shear, in a run-through of what-ifs.
Some market watchers predict a huge sell-off of assets that would drain wealth from retirement plans and undermine consumer confidence. The Dow Jones industrial average has dropped almost 600 points since September, in part because of uncertainty about the presidential election and the ability of politicians to reach a deal on taxes and spending this year.
But the stock market has rebounded somewhat in the last two weeks. On Friday, investors shrugged off heightened partisan bickering in Washington a day earlier. ...NYT
The Republicans -- now seen as the perps-in-chief when it comes to the fcrash five years ago and the failure to reach a budget deal -- have, to their cost, dragged this thing out. Result: the "cliff" is losing ( has lost?) its impact.
The danger of defaulting on the nation’s financial obligations is not at great as it was during the 2011 impasse over raising the nation’s borrowing limit. And some of the tax and spending changes would not be felt for months. ...NYT
But the GOP is seen to have jumped off the credibility cliff even as another gain in political clout has been felt on the left.
... Many Democrats also believe that failing to reach a deal for a brief period early next year would provide new leverage for Mr. Obama and a quick capitulation from Speaker John A. Boehner and his Republican colleagues on a package of tax cuts for the middle class and increased rates for the nation’s wealthiest citizens. ...NYT
Here's the hitch: there has to be visible, strong public support for Obama during this process. Are we about to let him down again?
... In a message to the millions of people subscribed to the White House e-mail list, David Plouffe, a senior adviser to Mr. Obama, urged supporters to keep the pressure on lawmakers and warned of the dire consequences if the negotiators were unable to find common ground.
“Unless Congress acts, 114 million middle-class American families are staring down a tax increase starting January 1,” Mr. Plouffe wrote in the e-mail.
But the lack of immediate consequences could also serve to empower Republicans to hold firm for days or weeks against a deal with the president, believing that the public would not exert the kind of political pressure that Democrats expect.
Without concrete ramifications, Mr. Obama’s recent efforts to keep his campaign supporters energized about the tax and spending debate could fizzle. ...NYT
Sure, we gave him a second term. But if it looks as though we might sit back again once in a self-congratulatory haze-- just as we did during the first term -- you can count on fizzle.
We don't have to be Carrie-crazy like the Republicans. But we do have to match their manias with the same degree of energy and teamwork.