Poisonous Atmosphere

In the wake of the ouster of House Speaker Kevin McCarthy (R–Calif.), President Joe Biden called on lawmakers Wednesday to fix the “poisonous atmosphere in Washington” and get their act together. “We cannot and should not again be faced with an 11th-hour decision or brinkmanship that threatens to shut down the government.”

But the “poisonous atmosphere” existed in Washington long before this week’s events. And given that one of the central reasons for the McCarthy drama—other than long-brewing animus toward McCarthy, who struggled to get elected speaker in the first place—was a faction of Republicans being concerned about runaway spending and the looming threat of a debt crisis, the ouster may actually be a welcome sign.

Still: Before any such spending cuts can be addressed, members of the House must elect a new speaker.

House Democrats intend to nominate New York’s Hakeem Jeffries, but that is unlikely to go anywhere, given the Republican majority. On the Republican side, Louisiana’s Steve Scalise and Ohio’s Jim Jordan have announced that they are running. Republicans will reportedly hold a session on October 11 where they discuss, internally, who they intend to put forth.

Some have offered former President Donald Trump as a possibility, citing the fact that one does not actually have to be a sitting member of the House to serve as speaker. Trump has expressed some interest in the idea.

Some libertarians will cheer the fact that the House is effectively on pause until these leadership decisions get sorted out. But the stopgap funding bill runs out roughly a month from now, and this distraction makes it more likely that legislators will again pass an omnibus at the last possible minute—if they manage to meet their deadline at all. Bear in mind that government shutdowns don’t actually really save much money, and—frustratingly—don’t even really shut down much of the government. So it’s not clear that this gridlock would help on those fronts.

Meanwhile, “the yields on U.S. Treasury bonds are now hitting levels not seen in decades,” writes Reason‘s Eric Boehm, and “much of the U.S. government’s debt is tied up in short-term bonds which periodically ‘roll over’ into new bonds with updated interest rates. As a result, higher interest rates mean higher interest payments—and those funds come directly out of the federal budget, leaving less revenue for everything else the government might aspire to do.”

In a better Washington, with a less “poisonous atmosphere,” the impending debt crisis would be considered a gigantic problem. In the one we have, it’s unlikely to be fixed. Let’s hope the next speaker of the House sees it as a priority.

Sam Bankman-Fried goes to trial: The trial of former FTX crypto exchange boss Sam Bankman-Fried started yesterday. Bankman-Fried faces seven criminal counts, including money laundering, securities fraud, and wire fraud; the trial is expected to last roughly six weeks. Prosecutors are arguing, in The New York Times‘ words, that Bankman-Fried “effectively looted billions of dollars in customer money to buy lavish properties, donate to political campaigns and invest in other companies.” 

One key component of the case will be Bankman-Fried’s intentions—whether he was deliberately defrauding those he worked with or whether he acted “in good faith,” as his lawyer claims.

No more right-to-shelter rule in NYC? Mayor Eric Adams has asked a judge to let him suspend New York City’s right-to-shelter mandate (also called the Callahan consent decree) under an influx of migrants. Adams is arguing that the spike in migrants expecting public services constitutes an emergency, which warrants suspending the policy.

“With more than 122,700 asylum seekers having come through our intake system since the spring of 2022, and projected costs of over $12 billion for three years, it is abundantly clear that the status quo cannot continue,” Adams declared in a statement.

With approximately 10,000 asylum seekers still arriving each month, the city estimates this mounting crisis will cost taxpayers $12 billion over three fiscal years—an amount that will continue to grow without federal and state intervention and support,” Adams argued last month. “Because the city has been forced to bear most costs of the asylum seeker humanitarian crisis at a time when revenue growth is slowing and COVID-19 stimulus funding is sunsetting, the city faces substantial fiscal disruption if circumstances do not change.”

This was predictable. New York City actually achieved a balanced budget in fiscal year 2024 (due mostly to better-than-projected revenue), but it expects a $5.1 billion budget shortfall by fiscal year 2025. It’s essential for the city to keep its finances under control. Expedited work authorization for asylum seekers who have come to the city would be one way out of this mess; Adams started prioritizing this in mid-September, and Gov. Kathy Hochul has announced a similar initiative within the last few days. Still, that’s mostly in the hands of federal immigration authorities, who ought to be more permissive in letting people work. The best way out of this is to move migrants away from dependence on social services and toward gainful employment.


Scenes from New York

This week, Manhattan finally got its very first beach. But you can’t swim there.

“The idea for a Manhattan beach has been decades in the making. Former governor George Pataki promised a beach at Gansevoort, previously the site of a Department of Sanitation building,” reports Curbed‘s Clio Chang. “But it wasn’t until 2019 that the Hudson River Park Trust announced that it had selected [an] architecture firm…to turn the concrete square into a beach. The city put over $70 million into the 5.5-acre park, which also features a launch point for kayakers, a sports field, a boardwalk, picnic tables, and 20 million oysters seeded in the surrounding waters to help restore the habitat.”

Holy cow, $70 million? Why couldn’t this have been privately funded? You can’t even surf there.


QUICK HITS

  • Today at 1 p.m. Eastern, Zach Weissmueller and I will be interviewing Aella, a well-known sex worker, rationalist, and data scientist. We plan to talk about porn age-verification laws, whether the sexual revolution was a mistake, and whether there’s too much porn in the world. Bring your (non-R-rated) questions for our guest. Check out our past livestreams too.
  • A tech conference meant for women was overrun by men who got in by claiming to be nonbinary.
  • Down with gerontocracy, please, I am begging you:
  • Britain’s prime minister says the smoking age should start at 18 and rise by one year, every year, up until nobody can buy them. (Alternative proposal: We trust adults to make their own choices without the intervention of the state.)
  • Get this man some eye bleach!
  • Arnold Schwarzenegger for speaker?

Originally posted 2023-10-05 13:30:55.


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