ustxtxb_obs_1995_10_27_50_00005-00000_000.pdf

r n re , 4 AV 1. 4 4. ;. to JAMES GALBRAITI-1::::’ NEWT PLAYS THE MADMAN CARD Once long ago the very young Daniel Ellsberg, later of Pentagon Papers fame, made a contribution to the pure theory of strategic bargaining. Ellsberg’s idea was that you can sometimes gain advantage if your adversary isn’t sure you aren’t crazy. Years later, this idea found expression in the 1972 Christmas bombing of North Vietnam, intended to force Hanoi to accept Richard Nixon’s peace terms. The B-52s were sent, not for the direct damage they would cause, but to make Hanoi’s leaders wonder just how far the “madman Nixon” might go. Newt Gingrich was up to something similar on September 21. That day, he stated that he would force the United States Government into default on its national debt unless President Clinton and the congressional Democrats capitulate on Medicare cuts and the rest of the Republican budget. Default on the national debt is a very big deal. Nations, states, cities, counties, businesses and ordinary people take enormous pains with their accounts and their reputations so as to be able to borrow on good terms. Sometimes things go wrong and they actually can’t pay; New York City negotiated a moratorium on some interest payments twenty years ago. Sometimes hucksters milk the system and then try to disappear with the spoils, as in the S&L crisis a few years back. But almost never does an honest, solvent debtor willfully turn to its bondholders and say, “fuck off.” Not, that is, unless you’re crazy. Newt Gingrich knows this. And while the Speaker of the House is not to my political taste, we can be quite confident he’s not crazy yet. So there is no need for a school-marm lecture on how “irresponsible” an actual default would be. The Speaker obviously isn’t serious. And that, unfortunately for us, is the real problem. For, what do you do when your bluff is called? The first instinct is never to back downtoo much loss of face. No, the first instinct is to keep up your bluff, and the second is to come up with some new maneuver to make the bluff seem credible again. To raise your bet. Ultimately, to seem credible the bluff has to be credible. James K. Galbraith teaches economics and other subjects at the Lyndon B. Johnson School of Public Affairs, the University of Texas at Austin. This essay first appeared in Newsday and is reprinted with their permission. As former Secretary of State Dean Acheson wrote to President Kennedy during the Berlin Crisis in 1961, in order for Khrushchev to think you are ready to launch nuclear war over Berlin, you have to be ready to do so \(Kennedy resisted this adthe reality. And so with Speaker Gingrich and the default of the United States. Newt now faces a choice. Does he back off his hasty, transparent remark? If he does, he reveals his true political problem: he doesn’t hold the cards he needs. Gingrich doesn’t have popular support for the destruction of Medicare and all the other Republican cuts, and won’t win unless the Democrats fold their cards. Political weakness, once exposed, has a way of snowballing. Today’s all-powerful Speaker could become tomorrow’s has-been. But on the other hand if Newt wants his threat to be credible, he has to raise his bet. He has to put real fear into the bond markets that plainly were not, the first time around, very impressed. In a word, he has to do something crazy. It is easy to see where this leads. Threats escalate. Uncontrolled arms races lead to war. The immature utterance of an undisciplined remark can lead to calculated action of enormous destructive power. A little exemplary default, on just a few issues of the government debt for a day or two, could open the door to a massive crisis of debt repudiation, under the same political pressures, later on. In that case, the very legitimacy of the American state would crumble. Pandora’s Box should never, never be opened. Now that national default has been threatened, the problem does not reside in objective facts, but in the mind of the Speaker, or in the perception that others may have of what is in the Speaker’s mind, and in how the Speaker may act to manipulate those perceptions. This game spins out of control on its first move. For, apart from an admission of his own looniness, how can Gingrich now credibly retract his threat? He’s too young to play the senility card, the tactic Ronald Reagan perfected for similar occasions. There is no escape. The logic is relentless, even though we remain, as yet, only at the very top of the slippery slope. Madmen in authority must be removed. Equally, people who talk or behave like madmen should not be governing the United States. Whether or not they really are crazy is beside the point. The Speaker’s colleagues, especially his Republican colleagues whose partisan honor is at stake, should protect the nation by curbing his power. If they can’t do this while he remains in office, by formally repudiating his reckless threat, then they should remove himas they did, to their everlasting credit, to Richard Nixon in 1974. And they shouldn’t wait until it really becomes necessary to send in the nice young men in their long white coats. This is Texas today. A state full of Sunbelt boosters, strident anti-unionists, oil and gas companies, nuclear weapons and powerplants, political hucksters, underpaid workers and toxic wastes, to mention a few. 4, 4,. :. A –: ./e …1 _ z .1,, ‘ ,; r../i1 7 *, 4, ile\\-.0 .. _ .. BUT DO NOT DESPAIR! rd.” THE TEXAS 1 OP server TO SUBSCRIBE: Name Address City State, Zip $32 enclosed for a one-year subscription. Bill me for $32. 307 West 7th, Austin, TX 78701 0 THE TEXAS OBSERVER 5