US Politics

The House Republicans have triggered a Chernobyl of their own, a chain reaction that will inexorably lead to a meltdown to their core surrounded by a radioactive forbidden zone. Saboteurs rush in unobstructed, setting blazes and planting explosives. The nominal fire chief stands dumbfounded, an observer transfixed at the raging conflagration, anxious about his escape route. “This is a whole new concept of individuals that just want to burn the whole place down,” the fire chief fumes. Then, smoke billowing behind him, he flees the scene and tells everyone to go home for a week.The speaker of the House, Kevin McCarthy, is the speaker in name. He has the part. He will do anything to retain the honorific. Gesture by gesture he dispenses with the powers of his office for the sake of wearing its polished badge. If nature abhors a vacuum, his unnatural enemies thrive in it. He agreed to their demand that instead of proposing a continuing resolution for 30 days to continue negotiations on the budget he would divide appropriations into 14 separate bills, each requiring a procedural vote to be able to consider them. Twice he dutifully brought to the floor the procedural votes for the defense appropriations bill, and twice they were contemptuously rejected. His heedless appeasement was a defeat foretold. The federal government shutdown looms.McCarthy could have ignored his hostage takers. He could have made an agreement with the House Democratic leader, Hakeem Jeffries, on the basis of the already negotiated bipartisan budget deal with the Senate Republicans. McCarthy could have brought along some of his caucus and that with the Democrats would be a comfortable majority. And he could still attempt to make a deal. If the far right initiates a motion to vacate, to try to remove him, the Democrats could join with a portion of the Republicans to maintain him.But the consequences of demonstrating that he has a backbone would almost certainly spark the motion. To survive, he would have to confront his tormentors; to vanquish them, he would have to discredit them. To discredit them, he would have to contend with the greater power behind their cabal whom they imitate and serve, Donald Trump, who presses for the catastrophic outcome because he prospers on disorder.In the meantime, the sidelined Democrats watch and wait. If the Republican illogic reaches its logically absurd conclusion in a shutdown, would McCarthy, if he resisted, be removed? And, after numerous inconclusive ballots to elect a speaker, would five Republicans agree to vote for Jeffries as speaker, who would give them committee chairmanships, so that the House would be a functioning body? Perhaps, in the speculative possibility, there would be no speaker, without which there would be no functioning House, therefore no functioning Senate, and therefore no functioning government. It would be Trump’s dream come true. Would President Biden have to step in to authorize emergency funding until there is a Democratic House?McCarthy would seem to prefer to die the coward’s death of a thousand cuts. In the midst of the meltdown, McCarthy chose to appear on Fox News to state that Trump is the certain Republican nominee, “stronger than he has ever been”, and that his rival Ron DeSantis is “not at the same level”. The fire chief is the pyromaniac enabler in chief. Yet he still complains about the arsonists.None of his Trump worship helps McCarthy quell the Trump miscreants, or calms anybody else in the House Republican Conference, for that matter. McCarthy is perceived as having the vision of a mole, the courage of a squirrel and the dignity of a dunk-tank clown. But that’s only what Republicans think of him. The feeling is not reserved to those who wish to destroy him, but held by those sustaining him.From the more regular Republicans the nicest thing said about him is that he’s “weak”, as Representative Victoria Spartz, Republican from Indiana, recently put it. “It’s Kevin McCarthy who failed us,” she said, invoking the founding fathers “rolling over in their graves”. She is so disgusted she is not running for re-election. Representative Mike Garcia, Republican from California, accused his party’s irreconcilables of being Manchurian candidates. “This city,” he said, “Washington DC, is riddled with Chinese sympathizers.” Representative Don Bacon, Republican from Nebraska, went biblical: “Some of these folks would vote against the Bible because there’s not enough Jesus in it.” Representative Mike Lawler, Republican from New York, declared: “This is not conservative Republicanism. This is stupidity … It’s a clown show.”Matt Gaetz, the towel-snapping bullyboy, is the ringleader of the rump caucus desperately seeking to bring the House to a halt. Preening as a lady-killer, he has notoriously remarked of women’s rights activists: “Why is it that the women with the least likelihood of getting pregnant are the ones most worried about having abortions? Nobody wants to impregnate you if you look like a thumb.” The congressman from Florida was not charged earlier this year in a justice department investigation into his alleged involvement with the sex trafficking of a minor in which a close associate of his pleaded guilty. But the House ethics committee began questioning witnesses in July in an investigation of Gaetz’s alleged sexual misconduct and illicit drug use. The kindest things he has said about McCarthy are that he is “unhinged” and “lying like a dead dog”.Gaetz has furiously been trying to force McCarthy out and to close the ethics committee investigation. “Matt is upset about an ethics complaint,” McCarthy explained. In response, Gaetz called him “a sad and pathetic man who lies to hold on to power”. Gaetz has drafted a resolution of a single sentence to remove McCarthy: “That the office of speaker of the House is hereby declared to be vacant.” The date was left empty on the document, a copy of which was discovered on a baby-changing table in a bathroom near the House chambers.The proximate source of McCarthy’s quandary lies in his devil’s pact to gain the office he has long coveted, since he failed in his bid in 2015 to succeed the retiring speaker, John Boehner. He finally secured the post after 15 ballots in which he was dragged around for four days by Gaetz & Company. His Faustian bargain was to promise all things to all fringes. The premise of his getting power was to relinquish it.McCarthy “has made promises on each of those issues to different groups. And now it is all coming due at the same time,” said the rightwing representative Ken Buck. One of Gaetz’s allies, Representative Tim Burchett, Republican from Tennessee, compared McCarthy unfavorably to the former Democratic speaker Nancy Pelosi (“Well, he’s not as mean as she is”), and added, “We are very dysfunctional right now.”Representative Chip Roy, Republican from Texas – who inhabits an outer reach of the right and who, as Senator Ted Cruz’s chief of staff, was instrumental in precipitating a federal government shutdown in 2013 in a vain attempt to overturn the Affordable Care Act – declared: “I honestly don’t know what to say to my fellow Republicans other than you’re going to eat a shit sandwich and you probably deserve to eat it.”The origins of the self-destructiveness of the House Republicans always run to the rise of Newt Gingrich. When he was a backbencher, the leadership thought it could unleash him to damage only the Democrats, a gambit from which the party regulars would reap the ultimate benefit. But Gingrich quickly became uncontrollable, torpedoing President George HW Bush when he made a deal with the Democratic Congress to raise taxes. When Gingrich rocketed into the speakership, fueled with grandiosity, he staged two federal government shutdowns in 1995 and 1996, but was stood down by President Bill Clinton, which laid the pathway to his re-election.Among Gingrich’s insidious techniques was the introduction of an unstated rule that a bill could be brought up for a vote only on the basis of approval of a majority of the majority, which was in fact a minority of the overall body. This tilt empowered the right within the House Republican Conference and isolated moderates. Under Gingrich, the rule was not actually often applied. But under the speakership of Dennis Hastert, who replaced him, it became known as the Hastert rule, canonizing the rule of the minority.From the Hastert rule onward, the tyranny of the minority in the House became an operative principle. Whether it was applied or not, the right could exercise its power through its sabotaging veto, leading to a spiraling descent. Ever smaller minorities wielded threats; ever more facsimiles of Gingrich spontaneously generated. (Hastert himself was convicted in 2016 of sexually molesting four boys as a high school wrestling coach and imprisoned.)In 2015, a gaggle of House rightwingers led by Jim Jordan formed the Freedom Caucus, which in a relatively short time systematically wrecked the Republican speakerships of John Boehner and Paul Ryan – and, by the way, kept Kevin McCarthy out of the office.But after the Republicans lost the House majority in 2018, McCarthy had enough juice to beat Jordan in the contest to become minority leader. A careening Trump became so dependent on the Freedom Caucus as his defender that he made its chair, Mark Meadows – a congressman from North Carolina, and a Jim Jordan finger puppet – his chief of staff, where he ultimately became a central figure in the management of the January 6 attempted coup.McCarthy, Trump’s redoubtable “My Kevin”, was shocked by the assault on the Capitol, but swiveled to defend Trump from impeachment and removal. Just one week after Trump went into exile at Mar-a-Lago, on 27 January 2021, McCarthy traveled as a supplicant to bend his knee. There he issued a statement denouncing the impeachment for the January 6 insurrection, and, without missing a beat in the same sentence, condemned the incoming Biden administration’s efforts to deal with climate change, “destroying blue-collar jobs” as the “radical Democratic agenda” – twin olive branches, one to the disgraced Trump and the other to the fossil fuel industry that is a pipeline of dark money into Republican campaign coffers. By his abasement to Trump, McCarthy made himself a hostage to fortune. The rest is the corrupt bargain.If the Republicans were to lose the House in 2024, they would do so by forfeiting many if not most of the 18 swing districts that Biden won in 2020, currently held by more moderate or old-style conservative types, hanging by a thread that may be cut by a shutdown. Redistricting may also yield the Democrats at least six to 10 seats, perhaps seven in New York, enough by themselves to shift the balance of power, despite the possible gerrymandering of North Carolina districts by a Republican-dominated state supreme court. The aftermath of a purged and reduced Republican conference would leave a more purified, embittered and vengeful far right in an even more ideologically homogeneous and compact minority.House Republicans’ fear of losing their majority is an unstated motive driving the accelerated radicalization of the rump caucus forcing a shutdown, demanding their wishlist of maximum reactionary policies, to which McCarthy has caved, and if necessary overthrowing McCarthy.The folly would not end either with a shutdown or its avoidance by means that may or may not ignite the motion to vacate, while the Senate and the White House would reject the House budget, if there ever is one, and it all starts over. Scene by scene, the absurdist play unravels until it begins again. It is a jumble of Eugène Ionesco plays.Is it The Chairs? Chairs are arranged for invisible people. An old couple welcome the king, who is also invisible. An orator who cannot hear or speak promises to deliver a message to save humanity. The old couple jump out the window. The orator scrawls incoherent words on a blackboard. The empty chairs remain. Or is it The Bald Soprano, with a fleeting glance at Lauren Boebert before the blackout to signal that the play starts from the beginning in an endless feedback loop?A character without character is the main character. Delinquent members of the chorus rip apart his script and order him to dance to their discordant music. He taps awkwardly along for a while, shouts incoherently into the wings, shakes his fist, lowers his head and walks in circles. His haphazard fecklessness, learned helplessness and empty commands move the play rapidly to the blackout.But the incredible lightness of Kevin McCarthy is actually a scene in a heavier drama. Behind the facade of the theater of the absurd a more menacing play is being rehearsed. “Republicans in Congress can and must defund all aspects of Crooked Joe Biden’s weaponized Government,” Trump wrote recently on Truth Social. “This is also the last chance to defund these political prosecutions against me and other Patriots. They failed on the debt limit, but they must not fail now. Use the power of the purse and defend the Country!” Or as he put it in another post: “UNLESS YOU GET EVERYTHING, SHUT IT DOWN!”Trump stokes a shutdown to bring it all down. The deadlock that can produce a temporary crisis is a continuation of his rolling coup to delegitimize the government and seize maximum power. He will bring the Capitol to a stop without the mob at the doors, but instead inside the chamber. The greater the chaos, the greater the demand for the dictator; the worse, the better. After the bleak comedy, the joke is on us. After McCarthy, Trump.When the Ionescu comedy dissolves, what is revealed is Bertolt Brecht’s The Resistible Rise of Arturo Ui. Written in 1941, the play is a parable of a Chicago gangster ruthlessly eliminating anyone in his way to absolute power: “Now you stand defenseless in a cold world where, sad to say, the weak are always trampled. You’ve got only one protector left. That’s me, Arturo Ui.”
Sidney Blumenthal is the author of The Permanent Campaign, published in 1980, and All the Power of the Earth: The Political Life of Abraham Lincoln, 1856-1860, the third of a projected five volumes. He is the former assistant and senior adviser to President Bill Clinton and senior adviser to Hillary Clinton More

From 3h agoGood morning, and welcome to our rolling coverage of business, the financial markets and the world economy.The possibility of a US government shutdown is looming over global markets today, and threatening America’s triple-A credit rating.Overnight, credit rating agency Moody’s warned that dysfunction in Washington DC would reflect negatively on the country’s rating.Moody’s is the last of the Big Three credit who still gives the US a AAA rating with a stable outlook (the gold standard for credit worthiness).It warned:
A shutdown would be credit negative for the US sovereign,”
“In particular, it would demonstrate the significant constraints that intensifying political polarization put on fiscal policymaking at a time of declining fiscal strength, driven by widening fiscal deficits and deteriorating debt affordability.”
There are just a few days left for Capitol Hill to avert a shutdown, by passing a spending bill by 1 October. If that doesn’t happen, the federal government will be left without funding.That is expected to force hundreds of thousands of federal workers to go without pay and bring a halt to some crucial government services.Moody’s analyst William Foster told Reuters:
“If there is not an effective fiscal policy response to try to offset those pressures … then the likelihood of that having an increasingly negative impact on the credit profile will be there.
And that could lead to a negative outlook, potentially a downgrade at some point, if those pressures aren’t addressed.”
But there is deadlock in Washington DC, where a group of rightwing Republican members of the House of Representatives are refusing to reach a compromise with their own party’s leadership over a spending bill.Moody’s predicts that a shutdown would probably be shortlived, and likely not to affect government debt service payments.But the row is focusing investors’ attention on US creditworthiness, at a time when the interest rates on sovereign bonds are rising on fears that interest rates will stay higher for longer than hoped.Kyle Rodda, senior financial market analyst at Capital.com, says:
While what these agencies rate most government debt means diddly-squat, it does say something about the dysfunction in the US government….
Moody’s warning is a reminder of the costs of an unstable Government.
Just last month, Fitch downgraded the US government’s top credit rating, blaming the “steady deterioration in standards of governance”, following the row over lifting the US debt ceiling.Also coming up todayGatwick, the UK’s second largest airport, is expected to announce details of flights which are being cancelled this week due to a shortage of staff in air traffic control.Thousands of passengers flying to and from Gatwick this week are expected to suffer disruption, after it imposed an immediate cap on Monday of 800 flights taking off or landing a day.The airport said it would share the total of 164 cancellations proportionately between airlines until Sunday, with easyJet passengers most likely to be affected given the carrier operates just under half of all Gatwick flights.People travelling on Friday are most likely to be hit, with 865 flights scheduled to depart.The agenda
8am BST: European Central Bank chief economist Philip Lane speaks at a conference “Monetary Policy Challenges for European Macroeconomies”.
2pm BST: US house price index for July
3pm BST: US consumer confidence for September
Filters BETABanks including some of Europe’s largest lenders have helped fossil fuel companies to raise more than €1tn (£869bn) from the global bond markets since the Paris climate agreement, according to an investigation by the Guardian and its reporting partners.In the push to zero carbon Europe’s biggest lenders face growing pressure to limit their financial support for fossil fuel companies through direct loans and other financing facilities.But analysis of thousands of transactions since 2016, when more than 190 countries agreed at a UN summit in Paris to limit global warming by curbing pollution, has revealed that lenders including Deutsche Bank, HSBC and Barclays have continued to profit from the expansion of oil, gas and coal by supporting the sale of fossil fuel bonds.The findings have raised concerns among sustainable investment campaigners that banks are continuing to offer “hidden” financial support to energy companies that are responsible for increasing the world’s carbon emissions – even as they pledge publicly to phase out direct lending for new projects.The Guardian worked alongside other European newspapers and the Dutch platforms Investico and Follow the Money to look in detail at 1,700 bond issues recorded by the financial information provider Bloomberg.Here’s the full story.In the property sector, US tech giant Meta has paid £149m to break its lease on a major London development near Regent’s Park.Commercial property developer British Land told the City this morning that Meta had surrendered its least on 1 Triton Square – one of the two buildings it has leased at Regent’s Place – yesterday, at a cost of £149m.The move somes as major companies adjust their property needs due to the move towards home working following the Covid-19 pandemic.Simon Carter, CEO, is looking on the positive side, though, saying:
Meta’s surrender of our building at 1 Triton Square also enables us to accelerate our plans to reposition Regent’s Place as London’s premier Innovation and Life Sciences campus.”
European stock markets have lost more ground this morning, with the Stoxx 600 index down by 0.35% so far.Germany’s DAX, France’s CAC and Italy’s FTSE MIB indices are all down over 0.4%, while the UK’s FTSE 100 is 12 points (0.17%) higher.Pierre Veyre, technical analyst at ActivTrades, says investor risk appetite is decreasing – partly due to concerns of a US government shutdown within days.
“All Eurozone benchmarks were in the red shortly after the opening bell, led lower by real estate and consumer cyclical shares, as sentiment stays under pressure by several market drivers.”
“Lingering inflation and higher rates concerns are keeping investors from increasing their exposure to riskier assets, and the prospect of a Federal shutdown in the US next week is also adding pressure to market sentiment. Indeed, a lack of a funding agreement from the US Congress would likely negatively impact the country’s credit rating, according to Moody’s, further denting confidence in the nation’s economic outlook.”
“Stock investors also face another bearish pressure from China as property fears grow following a missed payment from the sector’s giant, Evergrande. This highlights concerns over the management of the property sector’s debt pile and leads to uncertainties about the overall recovery in the second-biggest economy in the world.”
“Dark clouds continue to pile up for investors, and the next batch of macro data is likely to be scrutinised by most to determine where risky assets may go soon.”
Although the pound is weaker today, it’s in better shape than a year ago.Today is the first anniversary of sterling slumping to a record low against the US dollar, in the aftermath of the mini-budget.At one point a year ago, the pound fell below $1.04. It’s up around 17% since, at below $1.22 today.The Hollywood writers and actors strikes have hit sales at Videndum, the UK-based maker of hardware and software for the entertainment industry.Videndum has reported that revenues fell 24% in the first half of this year, while it made a loss of £50m, down from a £16.4m profit a year earlier.Videndum blamed ongoing macroeconomic headwinds, destocking by customers, and the US writers’ strike which began in early May.It told shareholders this morning:
The Group is experiencing significantly more impact from the strikes in H2 2023 than anticipated at the time of its May Update. This is due to the prolonged writers’ strike, the additional impact of the actors’ strike, and the fact that there is less time for a recovery in the current year.
Additionally, the macroeconomic environment remains challenging. We are not yet seeing recovery in the consumer or ICC segments, and retailers are increasingly concerned about interest rates and working capital, and we are therefore still seeing some destocking. This is resulting in worse-than-expected trading conditions.
CEO Stephen Bird says management are focused on tightly managing costs and preserving cash, and adds that the company may need to raise fresh equity.Videndum’s shares have tumbled by almost a third this morning, to the lowest since early 2010.The company can trace its history back to 1909, when mechanical engineer William Vinten. began making Kinemacolor projectors for Charles Urban, who produced the world’s first successful motion picture colour system.There could be a “traumatic” end to September if a US shutdown can’t be averted, says Neil Wilson of Markets.com.He writes:
Keep your eyes on Washington.
If Republicans have not agreed a short-term funding deal to keep the US government from shutting down on September 30th, we could be in for a traumatic end of the month/quarter.
A full, lengthy shutdown of the US government is “likely” at the end of the month, PIMCO said last week.
Moody’s said a US government shutdown would likely have “an increasingly negative impact on the credit profile”. Are we seeing any of this in the bond market? I don’t know – maybe there is some risk premium being added, but also there is just a general impetus to push yields up – issuance + liquidity mismatch.
UK online fashion retailer Asos has warned that earnings for the last financial year are likely to be at the bottom of expectations, after clothing sales were disrupted by bad weather this summer.Asos reported that revenues fell 10% in the year to 3 September, and predicted that EBIT (earnings before interest and tax) will come in around the bottom of the guided £40m to £60m range.José Antonio Ramos Calamonte, Asos’s chief executive officer, said:
Across many of our markets (but most notably the UK), the hot weather drove a strong June and a wet July and August produced a weaker sales result.
Calamonte also told shareholders that his turnaround plan was bearing fruit:
We have reduced our stock balance by c.30%, significantly improved the core profitability of the business and generated cash against a very challenging market backdrop.
Shares in ASOS are down 2% this morning.Chris Beauchamp, chief market analyst at IG Group, says:
It’s another grim set of numbers on the sales front for ASOS, but the improvement in profitability does offer some hope for the future, suggesting that the actions taken over the last year have borne fruit to an extent.
The poor summer weather hit performance, but these look to be a more solid set of numbers for this fallen titan.
Water companies in England and Wales have been ordered to return £114m to customers through lower bills next year because progress on leakage and sewage spills has been “too slow”.In its annual water company performance report, the regulator Ofwat said the majority of water and wastewater companies were underperforming ontargets set for 2020 until 2025 to deliver better outcomes, for customers and the environment.Companies are judged against metrics including pollution incidents, customer service and leakage. This year, no company has been ranked in the “leading” category, and 10 companies are in the “average” category, while seven are “lagging” – Anglian Water, Dŵr Cymru, Southern Water, Thames Water, Yorkshire Water, Bristol Water and South East Water.More here.The pound has weakened to a new six-month low against the US dollar this morning.Sterling has extended its recent selloff, losing almost half a cent this morning to $1.2175, the lowest since mid-March.The US dollar is at a 10-month high against a basket of currencies, despite – or even because – of the deadlock in Washington DC.Ipek Ozkardeskaya, senior analyst at Swissquote Bank, explains:
Even if it sounds funny, the dollar could profit from safe-haven inflows if the government shutdown drama doesn’t last long. During the last US government shutdown, in 2018 – which was, by the way the longest shutdown since 1970s – the US dollar gained against most major currencies.
Of course, the longer a shutdown lasts, the bigger the impact would be on the economy, and potentially on the US’ credit rating. And the bigger the impact on the US growth and its credit worthiness, the more likely we see the US dollar get – at least a small – hit from another political gong show.
For now, though, don’t pull all your eggs out of the US basket, because, the dollar could well strengthen despite the political shenanigans in the US, and the US stocks could see increased inflows, as well. The last time the US government was shut in 2018, the S&P500 rallied 13%.
US governnment bond prices are coming under more pressure this morning, pushing up the yield (or interest rate) on Treasury bills to the highest since 2007.Yesterday was “another stormy day” in parts of the financial markets, reports Deutsche Bank strategist Jim Reid, with fresh milestones reached across several different asset classes.Reid told clients this morning;
Just to give you a sense of what happened: the 10yr Treasury yields rose +10.0bps and closed comfortably above 4.5% for the first time since 2007; 10yr real yields were near 15yr highs; the 10yr bund yield traded above 2.8% for the first time since 2011; the VIX index of volatility flirted with its highest level since May intra-day; the US dollar index hit a YTD high; and European natural gas prices reached their highest level in almost 6 months.
And if that weren’t enough, we remain days away from a potential US government shutdown, unless Congress can agree to pass funding beyond September 30. So a pretty tough backdrop for just about everything.
The risk of a US government shutdown this weekend is one of several potential tail risks nagging away at investors, says Stephen Innes, managing partner at SPI Asset Management.Innes explains:
Congress faces a critical deadline at the end of September, just days away. They must come to an agreement on government funding by this deadline. Failure to do so could result in the federal government’s partial or complete shutdown. But this has looked somewhat likely since the debt limit deal, given the thin House majority and a lack of consensus on spending levels. Other issues, like aid for Ukraine, funding for Justice Dept. investigations, or border security, could hinder progress, and the US sovereign downgrade could put an extra spotlight on the fiscal situation, adding to the risks.
In contrast to the debt limit, where Congress reached a deal due to the severe potential economic repercussions of an impasse, a government shutdown is viewed as relatively more manageable from a macroeconomic standpoint. However, this very fact, the less severe economic impact of a shutdown, paradoxically increases the likelihood that Congress may fail to take timely action.
Other tail risks include rising oil prices, and the ongoing US Hollywood actors’ strike, Innes adds.Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.The possibility of a US government shutdown is looming over global markets today, and threatening America’s triple-A credit rating.Overnight, credit rating agency Moody’s warned that dysfunction in Washington DC would reflect negatively on the country’s rating.Moody’s is the last of the Big Three credit who still gives the US a AAA rating with a stable outlook (the gold standard for credit worthiness).It warned:
A shutdown would be credit negative for the US sovereign,”
“In particular, it would demonstrate the significant constraints that intensifying political polarization put on fiscal policymaking at a time of declining fiscal strength, driven by widening fiscal deficits and deteriorating debt affordability.”
There are just a few days left for Capitol Hill to avert a shutdown, by passing a spending bill by 1 October. If that doesn’t happen, the federal government will be left without funding.That is expected to force hundreds of thousands of federal workers to go without pay and bring a halt to some crucial government services.Moody’s analyst William Foster told Reuters:
“If there is not an effective fiscal policy response to try to offset those pressures … then the likelihood of that having an increasingly negative impact on the credit profile will be there.
And that could lead to a negative outlook, potentially a downgrade at some point, if those pressures aren’t addressed.”
But there is deadlock in Washington DC, where a group of rightwing Republican members of the House of Representatives are refusing to reach a compromise with their own party’s leadership over a spending bill.Moody’s predicts that a shutdown would probably be shortlived, and likely not to affect government debt service payments.But the row is focusing investors’ attention on US creditworthiness, at a time when the interest rates on sovereign bonds are rising on fears that interest rates will stay higher for longer than hoped.Kyle Rodda, senior financial market analyst at Capital.com, says:
While what these agencies rate most government debt means diddly-squat, it does say something about the dysfunction in the US government….
Moody’s warning is a reminder of the costs of an unstable Government.
Just last month, Fitch downgraded the US government’s top credit rating, blaming the “steady deterioration in standards of governance”, following the row over lifting the US debt ceiling.Also coming up todayGatwick, the UK’s second largest airport, is expected to announce details of flights which are being cancelled this week due to a shortage of staff in air traffic control.Thousands of passengers flying to and from Gatwick this week are expected to suffer disruption, after it imposed an immediate cap on Monday of 800 flights taking off or landing a day.The airport said it would share the total of 164 cancellations proportionately between airlines until Sunday, with easyJet passengers most likely to be affected given the carrier operates just under half of all Gatwick flights.People travelling on Friday are most likely to be hit, with 865 flights scheduled to depart.The agenda
8am BST: European Central Bank chief economist Philip Lane speaks at a conference “Monetary Policy Challenges for European Macroeconomies”.
2pm BST: US house price index for July
3pm BST: US consumer confidence for September More

From 5h agoOne of the most striking aspects of Robert Menendez’s indictment was photos showing bundles of cash that investigators found in his home during a search last year.Prosecutors say the senator and his wife accepted bribes from agents of the Egyptian government, and investigators found a total of $480,000 stuffed in a safe, clothing and closets throughout his home.In his press conference, the senator addressed the money. “For 30 years, I have withdrawn 1000s of dollars in cash from my personal savings accounts, which I have kept for emergencies and because of the history of my family facing confiscation in Cuba,” said Menendez, whose parents are from the island.“Now this may seem old fashioned, but these were monies drawn from my personal savings accounts based on the income that I have lawfully derived over those 30 years. I look forward to addressing other issues in trial.”In a defiant speech to reporters, New Jersey’s Democratic senator Robert Menendez rejected charges brought against him by federal prosecutors, who claimed he illegally used his position to help the Egyptian government in exchange for bribes. Menendez made clear he would not step down, but remained vague about whether he’d run for re-election, while saying the cash investigators turned up at his house was merely for emergencies. Joe Biden’s spokeswoman, meanwhile, declined to say if the president believes the senator should resign, but an increasing number of Democratic lawmakers think he should.Here’s what else happened today:
Donald Trump teased buying a Glock pistol while campaigning in South Carolina, which may have violated federal law. He ultimately did not go through with the purchase.
The president welcomed the leaders of Pacific island nations to the White House, in a bid to build alliances against China’s influence.
John Fetterman, the first senator to call for Menendez to resign, gave back money the New Jersey lawmaker donated to his campaign.
Biden cheered a tentative agreement to end the Hollywood writers’ strike, ahead of his visit planned for tomorrow to a United Auto Workers picket line in Michigan.
Trump will skip Wednesday’s debate of Republican presidential candidates to make his own visit to striking autoworkers in Michigan.
During a campaign speech in South Carolina, Donald Trump attempted to shout out the state’s Republican senator Lindsey Graham, only to find his name attracted boos:It’s unclear what the boos were about. Graham is one of the more well-known conservatives in the Senate, though he has broken with some in the Trump wing of the party with his steadfast support for continued American aide to Ukraine.Punchbowl News reports that a Republican-controlled House panel plans to vote on Wednesday on releasing new whistleblower documents concerning Hunter Biden:The House will hold their first hearing of their impeachment inquiry into Joe Biden that day, which centers on unverified allegations of corruption against the president. His son’s business activities have been at the heart of those claims, but despite months of investigation, the GOP has yet to turn up proof that the elder Biden was involved in or benefited from his son’s overseas business dealings.In July, two Internal Revenue Service whistleblowers told the House oversight committee the Biden administration meddled in a Donald Trump-appointed US attorney’s investigation of Hunter Biden, however CNN reports that other IRS and FBI officials who spoke to investigators have disputed those claims.A Charleston Post and Courier reporter who attended Donald Trump’s campaign event today reports the former president did not go through with his purchase of a Glock pistol:Thus sidestepping the potential violation of federal law – or perhaps, newly permissible activity made possible by the supreme court’s conservative majority and its friendliness to public gun carrying – that would have followed.Donald Trump, campaigning in South Carolina, appears to have bought a Glock pistol – which may or may not be illegal under federal law.The former president and current frontrunner in the race for the GOP’s presidential nomination is on a successful swing through the Palmetto state, where he today announced he had received the endorsements from several of its top Republicans, including attorney general Alan Wilson, state House majority leader Davey Hiott and secretary of state Mark Hammond. The state’s governor Henry McMaster and its lieutenant governor have already endorsed him, in something of a blow to two other South Carolinians in the presidential race, senator Tim Scott and former governor Nikki Haley.In a now-deleted post on X, formerly known as Twitter, Trump’s campaign spokesman Steven Cheung posted a video where the former president poses with the pistol and says he wants to buy one.As NBC News reports, if he went through with the purchase, that would seem to break a federal law banning people who are under indictment – like Trump – from buying a weapon. But because of a supreme court decision last year expanding the ability of people to carry concealed weapons, judges have lately said that law is no longer valid:Joe Biden today welcomed the leaders of Pacific island nations to the White House in a bid to counter China’s courtship of the strategically important region. Here’s more on the visit’s significance, from the Guardian’s Siosifa Pomana and Julian Borger:Joe Biden has offered $40bn in economic aid to Pacific islands at a White House meeting with leaders from the region aimed at bolstering US engagement in the face of growing a growing Chinese presence.The president also announced formal US recognition of two new island nations, the Cook Islands and Niue, at the start of the Pacific Islands Forum, two days of Washington meetings with leaders from the group’s 18 members.“The United States committed to ensuring an Indo-Pacific region that is free, open, prosperous and secure. We’re committed to working with all the nations around this table to achieve that goal,” Biden said at the forum’s welcoming ceremony.The visiting leaders having been feted by the administration, brought down from New York where most attended the UN general assembly, on a special train to Baltimore where they were take to an American football game at the Baltimore Ravens’ stadium. There they were brought out on field and celebrated for “for their roles as American friends in the Indo-Pacific”.The Pacific leaders were also taken onboard a US Coast Guard cutter in Baltimore Harbor and they were briefed by the Coast Guard commandant, Adm Linda Fagan, on operations to combat illegal fishing and manage maritime domains. Over the next two days they will meet top members of the administration. The secretary of state, Antony Blinken, and ambassador to the UN, Linda Thomas-Greenfield will host a dinner for the visitors on Monday night, and on the second night, the Australian embassy will host a barbecue.“I think what the Biden administration has been able to do is to step up our game considerably in a short period of time in the Indo-Pacific,” a senior administration official said. “We have deep moral, strategic and historic interests here. And I think we’re reaffirming that promise.”White House press secretary Karine Jean-Pierre dodged the question when asked whether Joe Biden believes Bob Menendez should resign his Senate seat.From her press conference today:Far-right Republican congresswoman Marjorie Taylor Greene has drawn ridicule for using an image of a Hanukah menorah in an attempt to commemorate the unrelated Jewish holiday of Yom Kippur.Green on Sunday posted a message on X – previously known as Twitter – on Sunday wishing observers a meaningful fast for Monday’s observation of Yom Kippur. She tried to add a traditional Yom Kippur greeting but misspelled it: “Gamar Chasima Tova!”The backlash soon ensued.Critics noted that Greene’s use of a menorah in her message recognized a completely unrelated Jewish holiday observed in December. Past comments of hers which alluded to antisemitic tropes also undermined her message to Jewish observers.Greene subsequently deleted the original post without an apology and reposted the original text without the menorah image.John Fetterman,the first senator to call for Robert Menendez to resign, said he plans to give back the $5,000 that he received from the New Jersey senator towards his 2022 campaign.The Pennsylvania senator wants to return the donation in envelopes full of hundred-dollar bills, the Messenger reported. “We are in process of returning the money,” said a spokesperson for Fetterman, “in envelopes stuffed with $100 bills.”Republican Florida governor Ron DeSantis and Democratic California governor Gavin Newsom will take part in a televised debate on 30 November.The 90-minute debate will be moderated by Fox News host Sean Hannity and air on Hannity’s 9pm prime-time program.In a statement issued through the network, Hannity said he is “looking forward to providing viewers with an informative debate about the everyday issues and governing philosophies that impact the lives of every American.”DeSantis is also scheduled to also participate in the second GOP primary debate on Wednesday. Donald Trump, the clear frontrunner in the Republican race, will not attend.Observers reacted toDonald Trump’s threat to NBC, MSNBC and Comcast with a mixture of familiarity and alarm.In a statement, Andrew Bates, White House deputy press secretary, said:
To abuse presidential power and violate the constitutional rights of reporters would be an outrageous attack on our democracy and the rule of law. Presidents must always defend Americans’ freedoms – never trample on them for selfish, small and dangerous political purposes.
Elsewhere, Paul Farhi, media reporter for the Washington Post, pointed to Trump’s symbiotic relationship with outlets he professes to hate, given that only last week Trump was “the featured interview guest last week on Meet the Press, the signature Sunday morning news program on … NBC”.Others noted that on Monday night, the former White House aide Cassidy Hutchinson, a key witness for the House committee that investigated the January 6 attack on Congress, which Trump incited, was due to be interviewed on MSNBC.Sounding a louder alarm, Occupy Democrats, a progressive advocacy group, said Trump had gone “full fascist” with an “unhinged Sunday-night rant”. More

Saying he would not resign after being indicted on corruption charges, the embattled New Jersey Democratic senator Bob Menendez told reporters that $480,000 in cash found in a safe, clothing and closets at his home was kept there for emergency personal use. ‘For 30 years,’ Menendez said, ‘I have withdrawn thousands of dollars in cash from my personal savings accounts, which I have kept for emergencies and because of the history of my family facing confiscation in Cuba.’ Under an indictment unsealed last week, Menendez and his wife, Nadine Menendez, 56, were accused of using his seat in the Senate, as chair of the foreign relations committee, to benefit the government of Egypt More

Mark Meadows burned so many papers in his office fireplace as Donald Trump’s presidency came to its chaotic end that the then White House chief of staff’s wife complained about the cost of dry-cleaning his suits to remove the “bonfire” smell, Cassidy Hutchinson writes in her eagerly awaited memoir.The New York Times reported the passage about Meadows burning documents, before MSNBC confirmed it.Hutchinson, a senior aide to Meadows, emerged as a key witness before the House January 6 committee, which investigated the deadly attack on Congress Trump incited in an attempt to stay in power.Hutchinson’s book, Enough, will be published on Tuesday. Last week, the Guardian first reported Hutchinson’s description of being groped by Rudy Giuliani backstage on January 6. Giuliani denied it.For the Times, Robert Draper wrote: “It was, by [Hutchinson’s] telling, an administration awash in paranoia, with Mr Meadows and others refusing to dispose of daily litter in ‘burn bags’ for fear that someone from the ‘deep state’ might intercept the contents.“Instead, she writes, Mr Meadows burned so many documents in his fireplace in the final days of the Trump presidency that his wife complained to Ms Hutchinson about how expensive it had become to dry-clean the ‘bonfire’ aroma from his suits.”Meadows’ habit of burning documents was previously known. In May last year, the New York Times and Politico reported that Hutchinson had in testimony described Meadows burning papers. Politico said he did so after meeting Scott Perry, a hard-right Pennsylvania Republican congressman involved in attempts to overturn Trump’s defeat by Joe Biden.Later, transcripts released by the committee showed Hutchinson saying she saw Meadows burn documents around a dozen times between December 2020 and January 2021.skip past newsletter promotionafter newsletter promotionAs MSNBC pointed out, ahead of its own interview with Hutchinson on Monday night, Trump himself has without evidence accused the January 6 committee of “destroy[ing] all ‘evidence’ and records”.Last week, the former US president claimed to NBC the committee “burned all the evidence, OK? They burned all the evidence.” More

Insisting he would not resign after being indicted on corruption charges, the embattled New Jersey Democratic senator Bob Menendez told reporters that $480,000 in cash found in a safe, clothing and closets at his home was kept there for emergency personal use.“For 30 years,” Menendez said, “I have withdrawn thousands of dollars in cash from my personal savings accounts, which I have kept for emergencies and because of the history of my family facing confiscation in Cuba.”The senator’s parents are from Cuba though he was born in New York. Last week, he said: “It is not lost on me how quickly some are rushing to judge a Latino and push him out of his seat.” In Union City, New Jersey, on Monday, Menendez spoke in English and in Spanish. A group of people he said were “everyday people and constituents who know me” stood behind him as he spoke.The senator continued: “Now this may seem old-fashioned, but these were monies drawn from my personal savings accounts based on the income that I have lawfully derived over those 30 years. I look forward to addressing other issues in trial.”Under an indictment unsealed last week, Menendez and his wife, Nadine Menendez, 56, were accused of using his seat in the Senate, as chair of the foreign relations committee, to benefit the government of Egypt.Prosecutors described how the large sums of cash were found at Menendez’s New Jersey home, as well as actual gold bars. A Mercedes-Benz car is also at issue. Three businessmen have also been charged.In his remarks on Monday, Menendez did not mention the gold bars. Nor did he respond to reporters’ questions. His wife did not attend.Menendez beat a previous corruption investigation. Ending in 2018, a five-year examination of the senator’s relationship with a Florida eye doctor began with unsubstantiated allegations about consorting with prostitutes and resulted in a bribery indictment. Menendez denied wrongdoing. After a jury failed to reach a verdict, the investigation was dropped.Since the new indictment was unveiled, leading Democrats including the governor of New Jersey, Phil Murphy, and the New York progressive representative Alexandria Ocasio-Cortez have called for Menendez to resign.But in the Senate, only John Fetterman of Pennsylvania had called for his colleague to quit by the time Menendez stepped out to face reporters on Monday.“Everything I’ve accomplished, I’ve worked for despite the naysayers and everyone who has underestimated me,” said Menendez, 69.skip past newsletter promotionafter newsletter promotion“I recognise this will be the biggest fight yet, but as I have stated throughout this whole process, I firmly believe that when all the facts are presented, not only will I be exonerated, but I still will be New Jersey’s senior senator.”To those who have called for his resignation, he said: “The court of public opinion is no substitute for our revered justice system.“Those who rushed to judgment, you have done so based on a limited set of facts framed by the prosecution to be as salacious as possible. Remember, prosecutors get it wrong.”On social media, Fetterman seemed to dismiss Menendez’s claim to have kept so much cash for emergency use.“We have an extra flashlight for our home emergencies,” Fetterman said. More

According to fact checkers, Donald Trump made more than 30,000 false or misleading claims during his presidency. That’s around 20 a day. But, according to several opinion polls during his presidency, around 75% of Republican voters still considered Trump to be honest.

It seems incredible that a serial liar – whose biggest lie about the 2020 election results led to a violent insurrection and nearly brought American democracy to its knees – is still considered honest by so many people.

We began to tackle this question in a recent article that examined the political discussions of all members of the US Congress on Twitter between 2011 and 2022. To do this, we analysed nearly 4 million tweets. Our approach was based on the idea that people’s understanding of “honesty” involves two distinct components.

One component can be referred to as “fact-speaking”. This form of speech relies on evidence and emphasises veracity and seeks to communicate the actual state of the world. Most of us probably consider this an important aspect of honesty. By this criterion, Donald Trump cannot be considered honest.

The other component can be referred to as “belief-speaking”. This focuses on the communicator’s apparent sincerity, but pays little attention to factual accuracy. So when Trump claimed that the crowds at his inauguration were the largest ever (they were not), his followers may have considered this claim to be honest because Trump seemed to sincerely believe the claim he was making.

Healthy political debate involves both fact-speaking and belief-speaking. Political ideas often cannot be contested based on facts alone, but also require beliefs and values to be taken into account.

But democratic debate can be derailed if it is entirely based on the expression of belief irrespective of factual accuracy.

One of Trump’s senior advisers, then US counsellor to the president, Kellyanne Conway, coined the phrase “alternative facts” in order to back her boss by persisting with the falsehood about the largest inauguration crowd. This allowed viewers to choose whose “facts” to accept.

Within two years Trump’s senior lawyer and adviser Rudy Giuliani was insisting on national TV that “truth isn’t truth”. He was defending Trump’s feet-dragging over submitting to an interview with special counsel Robert Mueller and the likelihood that Trump’s testimony would conflict with sworn testimony offered by another witness.

‘Truth isn’t truth’: Rudy Giuliani beggars belief, August 2018.

These are examples of an extreme form of belief-speaking that goes beyond the bounds of conventional democratic debate.

Whose ‘truth’ are we talking about?

We wanted to know the extent to which either belief-speaking or fact-speaking have become more prevalent in political speech, in this case in Twitter posts by Republican and Democrat members of the US Congress since 2011. To do this we set up and validated two “dictionaries” that captured those two components of honesty. To capture belief-speaking, we used words such as “feel”, “guess”, “seem”. To capture fact-speaking we used words such as “determine”, “evidence”, “examine”.

Using advanced mathematical analysis, we were able to measure the extent to which each tweet represented belief-speaking and fact-speaking, and how the two trended over time.

The figure below illustrates the results of our analysis with examples of tweets that involve a lot of belief-speaking (top) and fact-speaking (bottom), separately for members of the two parties, red being Republican and blue Democrat.

Illustration of belief speaking and fact speaking in tweets by members of the US Congress.
Stephan Lewandowsky et al, Author provided (no reuse)

Our analysis first considered the long-term trend of belief-speaking and fact-speaking. We found that for both parties, both belief-speaking and fact-speaking increased considerably after Trump’s election in 2016. This may reflect the fact that topics concerning misinformation and “fake news” became particularly prominent after 2016 and may have resulted in opposing claims and corrections – involving belief-speaking and fact-speaking, respectively.

When we related the content of tweets to the quality of news sources they linked to, we found a striking asymmetry between the two parties and the honesty components. We used the news ratings agency NewsGuard to ascertain the quality of a domain being shared in a tweet. NewsGuard rates the trustworthiness of news domains on a 100-point scale based on established journalistic criteria, such as differentiating between news and opinion, regularly publishing corrections, and so on, without fact-checking individual items of content.

We find that for both parties, the more a tweet expresses fact-speaking, the more likely it is to point to a trustworthy domain.

By contrast, for belief-speaking we observed little effect on the trustworthiness of sources in tweets by Democratic members of Congress. There was, however, a striking association between belief-speaking and low trustworthiness of sources for Republicans: A 10% increase in belief-speaking was associated with a 12.8-point decrease in the quality of cited sources.

The findings illustrate that misinformation can be linked to a unique conception of honesty that emphasises sincerity over accuracy, and which appears to be used by Republicans – but not Democrats – as a gateway to sharing low-quality information.

Why does this happen? Another aspect of our results hints at an answer. We found that belief-speaking is particularly associated with negative emotions. So if Republican politicians want to use negative emotional language to criticise Democrats, this goal might be more readily achieved by sharing low-quality information because high-quality domains tend to be less derogatory of the main parties.

Finally, we also found that the voting patterns during the 2020 presidential election in their home state were not associated with the quality of news being shared by members of Congress. One interpretation of this result is that politicians do not pay a price at the ballot box for misleading the public. This may be linked to their convincing use of belief-speaking, which large segments of the public consider to be a marker of honesty. More

Donald Trump said Comcast, the owner of NBC and MSNBC, “should be investigated for its ‘Country Threatening Treason’” and promised to do so should he be re-elected president next year.In response, one progressive group said the former US president and current overwhelming frontrunner in the Republican 2024 presidential nomination race had “gone full fascist”.The Biden White House said Trump threatened “an outrageous attack on our democracy and the rule of law”.The US media was “almost all dishonest and corrupt”, Trump wrote on his Truth Social platform on Sunday, “but Comcast, with its one-side and vicious coverage by NBC News, and in particular MSNBC … should be investigated for its ‘Country Threatening Treason’.”Listing familiar complaints about coverage of his presidency – during which he regularly threatened NBC, MSNBC and Comcast – Trump added: “I say up front, openly, and proudly, that when I win the presidency of the United States, they and others of the lamestream media will be thoroughly scrutinized for their knowingly dishonest and corrupt coverage of people, things, and events.”Trump also used familiar terms of abuse for the press: “the enemy of the people” and “the fake news media”.Observers reacted to Trump’s threat to NBC, MSNBC and Comcast with a mixture of familiarity and alarm.In a statement, Andrew Bates, White House deputy press secretary, said: “President Biden swore an oath to uphold our constitution and protect American democracy. Freedom of the press is a fundamental constitutional right.“To abuse presidential power and violate the constitutional rights of reporters would be an outrageous attack on our democracy and the rule of law. Presidents must always defend Americans’ freedoms – never trample on them for selfish, small and dangerous political purposes.”Elsewhere, Paul Farhi, media reporter for the Washington Post, pointed to Trump’s symbiotic relationship with outlets he professes to hate, given that only last week Trump was “the featured interview guest last week on Meet the Press, the signature Sunday morning news program on … NBC”.Others noted that on Monday night, the former White House aide Cassidy Hutchinson, a key witness for the House committee that investigated the January 6 attack on Congress, which Trump incited, was due to be interviewed on MSNBC.“Female political or media antagonists really cause blood to come pouring out of Trump’s eyes,” wrote Howard Fineman, a columnist and commentator.Sounding a louder alarm, Occupy Democrats, a progressive advocacy group, said Trump had gone “full fascist” with an “unhinged Sunday-night rant”.skip past newsletter promotionafter newsletter promotion“There you have it, folks,” it said. “While Trump and his Republican enablers love to falsely accuse Democrats of ‘weaponizing’ the government against Trump, Trump himself is now openly threaten[ing] to weaponize the presidency to completely remove entire news channels from the airwaves simply because they expose his rampant criminality.”Juliette Kayyem, a Kennedy School professor and CNN national security analyst, pointed to a previous warning: “To view each of Trump’s calls to violence in isolation – ‘he attacked Milley’ or ‘he attacked NBC’ or ‘he attacked the jury, the prosecutor, the judge’ – is to miss his overall plan to ‘introduce violence as a natural extension of our democratic disagreement’.”Trump’s rantings were also coupled with threats to Gen Mark Milley, the chair of the joint chiefs of staff whose attempts to cope with Trump were detailed in an Atlantic profile last week.They come after a Washington Post poll gave Trump a 10-point lead over Joe Biden, who beat him in 2020, in a notional 2024 general election matchup.The Post said the poll was an “outlier” but Trump dominates the Republican nomination race and generally polls close to Biden despite facing 91 criminal charges – for election subversion, retention of classified information and hush-money payments – and civil threats including a defamation trial arising from an allegation of rape a judge said was “substantially true”.Another new poll, from NBC, showed Trump and Biden tied at 46% but Trump up 39%-36% if a third-party candidate was added. A “person familiar with White House discussions” about the prospect of a candidacy from No Labels, a centrist group, said it was “concerning”, NBC said. Biden, the report added, was “worried”. More