A response to my debt ceiling piece
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A response to my debt ceiling piece
Also a correction, and an adjustment to my corrections policy.
A journalist I like sent me an email in response to my debt ceiling piece from yesterday. As I was replying, it occurred to me this was a good occasion to push my corrections policy a step further. It was originally designed just for mistakes and unfair framing—ie. for bad research or bad faith on my part. But I don’t think that goes far enough. So I’m introducing something new here: paying for pushback.
It’s easy for a writer to frame their case as the obviously correct one. But there’s not a lot of reader value in that, even if no individual part is wrong in a provable way. There are often multiple ways of parsing the same evidence, and I think I provide more value to readers when I honor that by both inviting and publishing high-effort pushback.
So what follows are my emails with that journalist (unedited except for fixing a minor typo and removing irrelevant bits). In appreciation of their good faith, candor, and willingness to engage, I’ve donated $100 on their behalf to Araha’s work in Sudan.
Note that I also added a correction to yesterday’s piece earlier today. I suggested a NYT graphic was too simplistic when in fact it was from a series of images of which I’d only seen one. I’d unsuccessfully tried to find the image source before publishing, then got distracted and didn’t get back to it until almost a day after. (Was just going to plug in the link for standard image sourcing.) Once I found the article it was from I realized my mistake and immediately sent a DM to one of the co-authors to apologize / ask them where to send the bounties. I then added an in-line correction and added it to my corrections tracker. Mea culpa.
Email #1: Journalist to Me
Hi, I think [your piece] is missing something important. If you think of “the Democrats” and “the Republicans” as monolithic entities capable of acting in a rational and time-consistent way, then your analysis would be correct—they'd skate up to the edge of the cliff and then cut a deal just before they went off the edge.
The problem is that “the Republicans” isn’t a monolithic entity. Kevin McCarthy doesn't have the clout with his own caucus to get them to pass whatever deal he negotiates with Joe Biden. It's not clear they even agree among themselves what kind of spending bill they'd like to see. And I think it's very possible that there are >5 Republicans who will not vote for a debt ceiling bill under any circumstances—at least prior to a default causing an actual financial crisis.
So McCarthy might find he can't get anything passed with only Republican votes, and he will likely lose his job if he tries to pass a bill with help from Democrats.
The other option is for moderate Republicans to cross the aisle and sign a discharge petition to pass a Democrat-supported bill with 213 Democrats and 5 Republicans. The problem is that almost any Republican who does this would be committing political suicide, as they'd face a primary challenge from the right in 2024.
So it's easy to imagine a situation where even though a large majority of the House wants some debt ceiling bill, no particular bill is capable of getting 218 votes.
The other problem is that we don't know where the edge of the cliff is. Janet Yellen has said it's as soon as June. I assume she's leaving herself some wiggle room in that estimate. But we don't know how much wiggle room and she doesn't either. Playing chicken is dangerous if the players don't know how close to a collision they are.
All that said, there's probably a 90+ percent chance that this gets sorted out through one of the above mechanisms, though I'm honestly not sure which one. But I don't think it's 99+ percent, and I definitely don't think the media is making a mistake by encouraging people to take it seriously.
McCarthy really could miscalculate, hold out too long, and trigger a default. We should not be playing games with the full faith and credit of the US like this. The Cuban Missile Crisis turned out fine, but if we had an incident like it every couple of years we'd eventually end up with a nuclear war.
Email #2: Me to Journalist
Appreciate you taking the time to reply here, esp in detail. Love good pushback!
In some order:
1. There have (roughly) always been mixes of personalities and positionings that have made dealmaking awkward, at least since the 80s. This was esp true with Gingrich in the mid 90s, and across the whole 2011 episode. While I'd agree that McCarthy's position today ranks pretty high on this awkwardness list, I wouldn't consider that especially meaningful in itself. The costs of failing to make a deal are just so large and inescapable for each individual minority rep that the pressure on the leader to be able to take credit for some deal has always won out.
2. McConnell being unequivocal is especially notable to me. He has serious pull within the broader GOP edifice, and he's been very flat that a default is just not a consideration.
3. We already have a deal framework. Note the wording of clause 5. They've got 31 House Republicans on there. While it's true that any eg 5 members sticking their necks out is very dangerous for them, this risk is much lower when you have a bloc. And enough of these reps are in districts where getting flanked by a nutjob for pushing a deal like this just isn't a huge concern. The onus is on McCarthy to find some deal, else this bloc with whatever other defectors will just hop.
4. The chicken / CMC analogies seem a bit off to me, just coz this can can be (and very often has been) kicked down the road a few months at a time via routine suspensions. There's never really any urgency when you know that at t-minus a day you can just say "ok we agreed to reconvene in 90 days" and spin it to your base like you were the sane ones averting disaster. This would be much different if you had to agree to a specific deal by x-day or the bomb goes off. But you can defer indefinitely. And given the timing of the summer recess, a suspension until the fall seems the most likely outcome. Would be easy for them to go back to their districts, talk tough yada yada, then come back and make a deal as attention shifts to DeSantis v Trump.
5. Something I didn't get into in my piece but that's also very relevant. Virtually every GOP rep will have received calls from their donors saying "if you cause a default I will fund someone else". The risk of being endrun by someone crazier than you in a primary is always a problem, but it's never quite as much of a problem as losing your donors and just having zero chance at all. The number of megarich donors that would confidently come out ahead in a default is super low.
Taking that all together, I just can't see it. In a world in which (a) a deal actually had to be done by x-day, (b) the costs of default weren't so staggering, (c) there wasn't intense/unified donor pressure towards dealmaking, (d) the % of extremists was much higher, then I could definitely see a non-zero probability here. But as it is, not seeing it?
Email #3: Journalist to Me
This might all be right but it also might not be. I think you might be overestimating the influence of McConnell and business donors relative to “the base” and small dollar donors. And I'm not sure that it'll be that much easier to pass a “kick the can down the road” bill because the right will spin that as a piecemeal capitulation by Republicans.
Anyway, I think it's one thing to say you're confident that things will work out. It's another to say that “every political journalist who doesn’t know this is either too green or too naive to be writing about the subject.” Some of them might know stuff you don't. Or maybe they just have a healthy dose of humility about the level of uncertainty in the world.
[Leaving out the intermediate emails where I pitch turning this into a post because they just restate the intro. In said emails I offered the journalist anonymity, in part because I want to encourage people coming forward with pushback without having to be tied to this newsletter. I especially don’t want to introduce any work weirdness for them if they’re a journalist. I also offered to give them the last word, as that seems fairer given my home field advantage.}
Email #4: Me to Journalist
Ok, a few brief replies to your first paragraph for completeness. Though I'm mostly interested in the second.
Donors
Gist: small dollar donors have much, much less leverage here
Using public data, small dollar donations (<$200) were about a quarter of the total for both parties in 2022. For larger donations (focusing on the GOP here specifically), dollars from those who gave $2,700+ outnumbered donations from those who gave $200-$2,699 by 3.2x. So pretty top-tilted. But this dataset is a bit skewed, as the less income you have the more financial pressure you have to declare your donation(s). Sneaky gifts / gifts-in-kind from the Harlan Crows of the world are not going to appear in this data; same for donations to 501(c)(4)s and so on. Whereas these categories see little-to-nothing from small donors.
But all that feels like a bit of an aside to me anyway, because it's not like pro-default reps can just trust on small dollar donations to make up the gap. First, because those are coming from the people most likely to get hosed by the Treasury freezing payments, and second because larger donors have a much lower coordination bar for settling on a replacement politician. (Also, large donors know your phone number and expect you to pick up. And they're in your social lives forever.)
Delay
There have been seven debt limit suspensions / can kicks since just 2013. They're very quickly forgotten. Also these reps aren't facing re-election for like 18 months. How many really believe that the memory of agreeing to a suspension will cost them then?
Insider knowledge
As for journalists on this beat knowing stuff I don't, I have just one question: where's the proof of work? If they know more, why isn't it present in their reporting? What are they saving it for? I've read dozens and dozens of journalism products on this subject, spanning back to the 50s. None have struck me as nearly as informative as eg. Fed minutes, CRS reports and so on. And I have the same access to those, and have been a regular reader of them for some 15 years now. Most news articles are carbon copies of each other, and (almost) none make very systematic cases.
Otherwise, I suspect one disconnect here may be the value one places on access reporting. These journalists are eg. able to get direct quotes (and OTR commentary) from people working on the Hill. Does this give them a better picture? I'm skeptical. Mostly because the supermajority of these quotes are just from press pools. But, sure, maybe a few plucky sorts do get the right aide who's been in the right rooms to start talking four drinks in and do get a proper scoop about, I don't know, how McCarthy has been talking in private. But I'd weight this really lowly against the macro forces in play here.
Humility
I certainly agree that recent history should make us thoughtful about black swans / the unknown unknowns. Many things were once broadly considered unlikely—eg. the collapse of WaMU and Bear Sterns, Trump's election, the Brexit vote, Putin's invasions of Ukraine, the superspread of COVID—and those things all happened just the same.
That the right response is to adopt a sort of epistemic humility is obviously true! But this can mean two quite distinct things. If we take it to mean never allowing our minds to fully shut in judgment, I'd agree! We ought to diligently seek and genuinely consider good counterarguments, introspect for biases and blindspots, consider which sources of confidence might be misplaced and so on. If this is what we mean, I'd just suggest that I'm not exactly short on this! There's a reason I explicitly invite exactly your kind of pushback! I look hard for counterpoints precisely because I'm fallible. Even so, there's this other idea of humility typified by the pundit who's correctly called twelve of the last two recessions. It's easy to be so open-minded to theoreticals that we cease to make real judgments at all. And all I can say about this type is that I welcome them at my poker table any time!
All said, I certainly don't begrudge a reporter saying “a default would be very costly, and here's a systematic take on why one could happen”—so long as they themselves demonstrate that first sort of humility. How well can they steelman the other side? And if they've been on this beat for a while, can I see evidence that their reporting has improved in insight and judgment from past crises? That's the kind of humility that readers need, that I find tremendously valuable, and that I'd love to promote.
I'm sad to say I haven't come across such reporters (though I think Jeanna Smialek at the NYT
is a great resource on the mechanical side). As you have any other examples, please do share so that I can give them their due!Email #5: Journalist to Me
As for journalists on this beat knowing stuff I don't, I have just one question: where's the proof of work? If they know more, why isn't it present in their reporting? What are they saving it for?
It's hard to answer questions like this in the abstract, but good reporters typically have more off-the-record conversations than on-the-record ones. It's much easier to get people to tell you stuff if you promise not to quote them. Anyway, I'm not making a strong claim that they know more than you on this particular issue. I'm just not sure how you could be confident that they don't.
On the “12 of the last 2 recessions” point: my estimate of the odds of a serious debt limit default (the kind that triggers a major financial crisis) is maybe 5 percent. Most likely we'll reach a good resolution. But if that happens I don't think that will prove that worriers were wrong to be worried, any than (say) the successful containment of SARS and MERS proved that it's silly to worry about pandemics.
Anyway I appreciate your open-mindedness on this and enjoyed the exchange.
She was fresh in mind because she co-wrote the NYT piece that was the subject of my correction. I first came across Jeanna on Twitter a year or two ago where she was able to answer a super wonky question I had about the Fed. While I have my problems with the NYT at an org level—and with some of their recent coverage on this subject—they do have some very knowledgeable reporters! Even so, I stand by my broader points here—which as always are more about systems than individuals. (What a journalist might write on their own substack could look very different from what they produce under editorial guidance!)
A response to my debt ceiling piece
Turned out you were correct r.e. whether there would be a default.