Four days later, the temperature picked up again with “A Mobilization in Washington by Wall Street”:
After a year of clashing with Washington over new financial reforms, the country’s most powerful bankers have found common ground with regulators in the hard-fought effort to lift the debt ceiling and avoid a default.
Wall Street is no longer watching from the sidelines as the most polarizing political fight in years plays out on Capitol Hill. In the last few days, top executives have been in close contact with Washington in a last-ditch attempt to prod lawmakers toward a compromise by Tuesday. . . .
If the House Republicans preference for demolishing the world economy to compromising can be seen as actualizing a useful political fiction — that tax increases are equivalent to demolishing the economy — an actual default would have involved the fictionalization of an equally useful political reality. This is the belief that the phrase ”Full Faith and Credit of the United States Government” indicates not only the existence of value, but is value itself.
Despite having been uncoupled from all other currencies, the dollar has maintained its status as the preferred form of reserve currency throughout the world. Despite being backed by nothing other than a nine-word pledge, U.S. debt is considered the safest investment going, and this absolute safety has a value separate from its relative rate of return. Once again hypocrisy comes into focus: the neoliberal effort to convince the American electorate of its democracy’s untrustworthiness has effectively provided the world with fourteen trillion reasons to believe the opposite. Considered against the great encyclopedia of human promises, no religious gospel or philosophical ideal, no scientific theory or legal precedent, no testimony of love or vow of hatred has ever been more widely or deeply believed than the full faith and credit of the United States Government is today.
This is why I referred to the debt-ceiling debate as a crisis of hegemony or identity rather than one of debt itself. If Congress were to default, and in such a way so as to truly convince the markets of the situation’s hopelessness, all the fables about ”the death of god” and ”the end of meta-narratives” would became material reality overnight. A U.S. default would be an epic act of deconstruction that would throw the truth of all those holdings enumerated at the outset into radical question. The consensus that this would be a world-historical disaster cannot to be seriously contested, especially by those of us who stand to suffer significantly less than others. That said, here are three points in conclusion.
1. It is worth remembering what drove us to the edge of the cliff: the right’s absolute commitment to the further robbery of the American people for the benefit of unproductive wealth. If anyone should have delayed the increase in the debt ceiling, it ought to have been the left, which had a simple and compelling case to make: restore what you have taken from us by raising taxes, canceling the debt owed the Federal Reserve, and re-regulating the banks.
2. It is important to point out that nowhere in the wildest dreams of the most militant revolutionary could an attack more powerful and effective than default be imagined. If we are to speak of endemic injustice on the one hand and raising the debt ceiling on the other, the burden falls to us to articulate at least a faintly plausible scenario whereby the salvation of the system also somehow includes real plans for its imminent progressive transformation.
3. In formulating such plans, we ought to be concerned not only with economic justice but also with ecological sustainability. If we take seriously the scientific consensus concerning the environmental impact of the consumption model we are fervidly trying to resurrect, we are again forced to ask why the debt ceiling is not being held hostage to secure lasting changes in our relationship with the natural world. Again, the case is simple: even if we could go on borrowing this way, we certainly can’t go on living this way.
What finally prevents the adoption of the defeatist position is, of course, a sober appraisal of the state of international organization. The current state of progressive or leftist power — be it institutional or spontaneous, national or international, theoretical or cultural — gives absolutely no indication that it possesses the resources to triumph in the throes of crisis, or even what that would mean. It is not that victory is impossible, only that it would be irresponsible to assume it. We’d pray for order under heaven even as the last remaining bridge melts beneath us, and we fall, finally, into air.
This article first appeared at the website of n+1 magazine.