Meltdown

For the moment, set aside all our worries about tensions at the Taiwan Strait. Next month, the world as we know it could end. The infrastructure of global finance could melt down.

US Treasury Secretary Janet Yellen says the US may run out of cash by June 1 unless the debt ceiling is raised. The US, as we know, runs on debt. In 1960, exasperated by the government’s propensity to borrow, the US Congress imposed a debt ceiling. Since then, the debt ceiling has been raised or revised 78 times – or more than once a year.

Today, the US debt ceiling is at $31.4 billion. That limit will be hit at the start of June. Unless the leaders of the executive and legislative branches arrive at an agreement to increase the debt limit, the US will be unable to meet its obligations. Cash might not come through the mail for pensioners. Vital government programs will have to be suspended. Government freezes.

The US is, by far, the most indebted nation on earth. Yet it has not been as close to defaulting on its debts as it is today.

We do not know the magnitude of the shock a US government default will deal the global financial market. The US has never defaulted before.

Analysts agree that a default will send the US economy lurching towards recession. In the first week, the unemployment rate will spike. Lending will tighten, especially in the light of a lingering banking crisis. More banks may in fact be pushed over the edge.

The repercussions on the global financial system will be profound. All the while, US official debt served as the gold standard. It was considered nearly risk-free.

The rest of the world also relied on the strong dollar. For generations, the US government ensured the dollar’s stability and strength. All the world’s major trading currencies will be unhinged if the dollar starts to plummet after a default. All the world’s commodity trading platforms, mostly denominated in dollars, will be thrown into chaos.

The imposition of a debt ceiling gives the US Congress strong leverage over the policies pursued by the executive branch. Although the two parties squabbled constantly over policies, they somehow reached agreements to raise the debt ceiling. The national interest was always larger than partisan positioning.

That was in the past. Today, an insane virus has infected American politics that encourages especially the right-wing politicians to pursue scorched-earth tactics. The Republicans, who control the House of Representatives by a small margin, are (as one pundit put it) resorting to “political arson.” They are trying to eradicate spending programs dear to the Democrats (such as social security and environmental protection) by holding the debt ceiling hostage.

For too long, the two sides postponed action on raising the debt ceiling while they postured. President Joe Biden finally called for a meeting at the White House with congressional leaders on May 9. That might even be too late to fashion a comprehensive compromise on the matter.

The signs might not be encouraging. But perhaps US congressional leaders might find the maturity, the sobriety and the statesmanship to avert a default. The stakes for the US and the rest of the world are simply too high.

Social media driven

We all saw, in the case of a sequence of bank failures in the US, how social media drastically accelerated bank runs. Before banks suffering liquidity problems could arrive at a strategy to save their institutions, massive deposit withdrawals had already caused them to fail.

In our case, frenetic social media activity seems to be driving the wedge even more in what should be a private marital dispute. The couple involved in this dispute are both topnotch lawyers known to many beyond the legal community.

The husband, in this case, only recently left a major legal firm with some of the best lawyers in his team and, subsequently, some of the biggest clients in an industry with a lot of regulatory concerns. There is speculation, largely unfounded, that the firm the husband left could be involved in publicizing draft complaints and affidavits, love letters, text messages, photos and eyewitness narrations.

We know about reality TV. In the case of this marital dispute, we have a running telenovela in social media, with the twists and runs dictated by partisans contributing their unwanted opinions. This has become a drama with thousands of scriptwriters involved. It has become an open access platform for all kibitzers to come in and participate.

None of the freely contributed commentaries are edifying. This has become an orgy of uninvited guests. To each his own gratification. To each his own prurient curiosity.

This whole social media carnival contributes nothing to resolving the marital dispute. On the contrary, it has brought this private problem to irreconcilability.

It will probably require volumes to analyze all the factors that converged to create this social media carnival. Gossiping has its delights, to be sure. This one has cascaded into a national sport. Because of this brilliant careers have been pushed to the brink of ruin.

This is not a healthy phenomenon. It will be helpful for all of us to resist the attraction of jumping in, taking sides and aggravating the dispute.

Give the couple space to resolve their differences. Allow them the great gift of privacy. Leave them alone.

There are certainly more urgent matters that call for a national conversation. It might still be possible to refocus our social media energies to address them.