I will say this about the more "out there" Republicans in Congress. They are not about business. Not one bit.
For most of my life the Republican party was the party of business. The GOP stood for whatever was good for sales and profits. The left would always claim that's because the Republicans were rich and their constituents were rich. Every now and then, particularly in the Northeast, you would hear about Republicans who balanced these issues with concerns about workers. These were noblesse oblige Republicans.
Republicans were about capital and Democrats were about labor. But over time, we've seen Republicans cleave into two parties, a majority that says it is pro-small business -- which is not the capital wing per se -- and a minority that doesn't respect the primacy of the federal government itself.
The minority, which hates being characterized by anyone other than themselves, seems to have become more about single issues, to play to their base so they can get on the ballot as Republicans in their re-districted safe seats. The intense voters in primaries are not pro-business (that I can tell) and right now, at least, these Tea Party-like GOPers are willing to sacrifice a lot of the old mantras to get their nominations. In fact, the Republicans in this wing of the party think they WOULD be sacrificed if they went with the old capital mantra. They can't be appealed to by someone in the GOP who is pro-capital because a pro-capital view could cause them to lose their nominations the next time around and they don't seem to need the funds from the pro-capital wing to win. This wing of the party seems united by only one thing: hatred of the president.
Now, to prove a point, anyone can try to throw a monkey wrench into things. Republicans of all stripes seem to want to hold up a budget that can be considered too profligate by some in the pro-capital wing and too Democratic by those die hards who don't understand their party lost the general election.
But you would not expect the monkey wrench at the full faith and credit of the U.S. government to be thrown by the Republicans. Aren't there enough Republicans who love bonds? Why would they risk destroying the value of what they thought were the bedrock investments of themselves and their constituents?
The Democrats -- the party of labor -- that's who would be willing to throw the bond market in turmoil. The party of the disenfranchised worker, that's who would throw that wrench.
But that certainly isn't the case now. If anything, I expect the president to go to the Supreme Court to enforce the Constitution, which demands that the nation's bills be paid.
Now it is still true, to some extent, that the Republicans stand for less regulation. I say to some extent because I think the previous administration didn't roll back a lot of regulations at all. They just didn't try to enforce them very hard.
But, in the end, the Republicans as we remember them at least, stood for a simple principle: if it was good for business, it was good. I think that's why, in the end, people in the market don't think the shutdown can last all that long because they remember when that rock-ribbed Republican Defense Secretary and former GM GM CEO Engine Charlie Wilson said "what's good for the country is good for General Motors."
I don't think that the Republicans, who are fighting even their own party over the shutdown and the debt ceiling, believe that any more. I think they probably think "a pox on labor's and capital's heads."
The perception's dying hard. Most people in the markets can't accept anything other than the idea that it is the Democrats who would all question the value of our bonds because of a belief that other issues could be more paramount to Treasury.
The simple fact is that's no longer the case.
The bulls today are betting that there are enough of the old Republicans to stop the new Republicans. They are not betting that the president's going to do anything, because, alas, he's not sitting there thinking "how can I help win over the business wing of the Republican Party?" I think he's thinking that he's watching the party of the rich implode, and that opportunity won't be missed.
So, those who are buying today are betting that the shutdown won't impact the numbers of the S&P companies and that the debt ceiling will be lifted by hook or by crook or by the Supreme Court.
They better hope so. Or they are going to be on the wrong side of this market, for certain.
Random Musings: My good friend Chris Matthews, who has the must-read "Tip and the Gipper" out today (I love all of his books) is looking for a protracted shutdown which, needless to say, is NOT in the numbers. Chris is too close to this to believe we shouldn't be thinking this more doomsday scenario couldn't happen. I still think it is an outside chance. But Chris is always worth listening to, and reading.
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