Irony can sting. During the week or so leading up October
17, 2013—“Armageddon” or “zero hour” for the default of the U.S. Government
absent any increase in the debt-ceiling (even though the next big payment would
not be due until October 21st)—Wall Street banks were already
bailing on short-term treasury bonds even as governments around the world were
holding on. Patriotism and corporate citizenship apparently collapse when money
due may be delayed. Meanwhile, foreign governments—even
big creditors like Japan and China—were taking a long-term view. “There’s no other way than for the U.S. government
itself and the U.S. Congress to sort it out,” Japanese Finance Minister Taro
Aso optimistically told Bloomberg Television.[1]
Apparently Fidelity and JPMorgan Chase did not get the memo. In over-reacting
out of an excessive desire to collect as stipulated, big American financial houses were not so subtly undercutting the U.S.
Government’s waning credibility. It is ironic that Washington’s best supporters
were foreign governments.
The underlying debt-burden would again surpass 100% GDP in Obama's second term. Image Source: Wikimedia Commons
Perhaps Wall
Street’s bankers do not understand political theatrics whereas foreign
government officials do. Maybe the bankers were privy to the real politics going on in Washington and
the situation threw a beam of light on the bankers’ greed and selfish
insistence that things go their way without exception. Either way, what is good
for Wall Street is not necessarily good for America. Put another way, the Wall
Street bankers who had been prospering so under the American hypertrophic value
on economic freedom (e.g., no amount of wealth is too much) felt no gratitude
or sense of obligation against even a chance that interest might be delayed a bit. In return, vast numbers
of Americans strangely continued to defend the right of the super-rich bankers
to pile on even more to their existing skyscrapers of wealth. If the bankers
were merely being themselves in shedding short-term treasury bonds, the
puzzling question may pertain not to them but to how a people could be so
beguiled.
[1] Mark
Gongloff, “The
Rest of The World Still Claims Faith In America (Even If Wall Street Doesn’t),”
The Huffington Post, October 14, 2013.
