Not Oregon’s Finest

Rep. Walden: If I wave this paper, does it make me look smarter?

No matter how many pressing issues confront Washington, from gun control to the can’t-seem-to-pass-it farm bill, there always seems to be time to waste on trivial, misguided and ideologically freighted issues. Today, the shame of useless proposals comes home to my state of Oregon. The state is usually pretty quite on the D.C. legislative front. We have no Ron Paul, introducing bills to return to the gold standard, and no powerful senator like Hawaii’s Daniel Inouye, bringing home loads of pork in the form of military bases and research projects. The highest level of PR for the Beaver State arrives via Sen. Jeff Merkley, whose advocacy for filibuster reform has won plaudits from liberal bloggers, and Sen. Ron Wyden, the Paul Ryan pal whose attempts to restrict natural gas exports occasionally draw disapproval from the other side of the aisle. So when Oregon’s only Republican representative, Greg Walden, floats an astoundingly lame idea, it’s particularly disappointing. He’s proposing real legislation to combat a dumb idea that’s not only unrealistic but literally unreal, as no one in the Obama administration is remotely considering it. Like Michele Bachmann trying to ban non-existent shariah law in the U.S., it’s a solution in search of a problem. As Politico reports:

Lawmakers are still positioning themselves for a debt ceiling fight in a few months, but one Republican congressman wants to snuff out a particular idea immediately: the U.S. Treasury minting $1 trillion platinum coins to avert a debt ceiling showdown.

Rep. Greg Walden (R-Ore.) has introduced a bill to specifically ban President Barack Obama from minting the coins.

“This scheme to mint trillion dollar platinum coins is absurd and dangerous, and would be laughable if the proponents weren’t so serious about it as a solution,” Walden said in a statement. “My bill will take the coin scheme off the table by disallowing the Treasury to mint platinum coins as a way to pay down the debt.”

The idea, which has won the support of Rep. Jerry Nadler (D-N.Y.) and economist Paul Krugman, would allow Obama to mint the platinum coin if the nation moves close to defaulting during the debt ceiling debate with Republicans in the coming months.

The problem is, neither of these “proponents” are actually serious voices. They’re outsiders with zero influence over President Obama or Treasury Secretary Timothy Geithner. Walden’s press release blares that “Greg Walden plans to introduce bill to stop U.S. Treasury from creating trillion dollar platinum coins to pay bills and expand debt,” ignoring the fact that the Treasury has proposed nothing of the sort. None of the “media reports (example here) have suggested that the U.S. Mint could create trillion dollar platinum coins” quote anyone who has the ear of actual government officials — and Walden’s example of a “report” is not a news article but an op-ed column. Paul Krugman (“Be ready to mint that coin!“) has made a career out of taunting conservatives, and Jerrold Nadler is a back-bench representative whose conviction that “it’s absolutely legal” is no more relevant than Allen West’s insistence that the Democratic Party harbors 80-some communists. Elected officials, as is abundantly clear, can say whatever they want. It doesn’t mean what they say is serious.

Nadler is actually a latecomer to the issue. Far and away, the biggest enthusiasts for the platinum coin solution have been professional pontificators like Josh Barro, a Bloomberg View columnist, and Business Insider’s Joe Wiesenthal. Barro summarizes his pet issue thusly:

In general, the Treasury Department is not allowed to just print money if it feels like it. It must defer to the Federal Reserve’s control of the money supply. But there is an exception: Platinum coins may be struck with whatever specifications the Treasury secretary sees fit, including denomination. This law was intended to allow the production of commemorative coins for collectors. But it can also be used to create large-denomination coins that Treasury can deposit with the Fed to finance payment of the government’s bills, in lieu of issuing debt.

Ezra Klein explains that, “hypothetically, Tim Geithner could mint a $2 trillion coin, deposit it in the Treasury’s account at the Federal Reserve, and use that money in lieu of additional borrowing. Suddenly, no one needs to worry if Congress refuses to raise the debt ceiling.” They key word here is hypothetically.

Kevin Drum hunts down the actual language of the exception, which states that “the Secretary may mint and issue bullion and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.” Drum, however, also calls the idea “ridiculous” and notes that legislators at the time stated that the relevant amendment “has no cost implications whatsoever.” In fact, the idea was the brainchild of a Delaware representative best known for establishing the 50-state quarter program. So if we’re looking for someone to blame for this whole ludicrous kerfuffle, we need look no further than the guy who gave us North Carolina’s Wright Brothers biplane design and Georgia’s tasteful peach-and-oak-spring illustration. In response to detractors like Walden, Josh Barro offers this defense of the idea he acknowledges has been labeled “silly/zany/juvenile.”

This is probably true, but it’s not a dispositive objection. Republican intransigence over the debt ceiling is juvenile. There is no particular reason that the president should not use a juvenile strategy in response.

The key question to ask about the platinum coin is not “is it juvenile?” but “will it work?” Minting the coin will allow the federal government to continue to meet its spending obligations despite hitting the debt ceiling. It will allow President Barack Obama to pressure Congress to repeal the debt ceiling. That — not whether it seems silly — is the important thing.

In Barro’s world, the debt ceiling would be repealed once Obama offered legislation abolishing his ability to mint platinum coins . . . with the caveat/added sweetener that the legislative branch would “give up its unwarranted restriction on borrowing to cover already appropriated obligations.”

Slate’s Matthew Yglesias is not quite as on-board, but he does point out a potential upside:

Obviously financing the government by exploiting an accidental loophole in a bill meant to create commemorative coins is a bad idea. But it’s equally obvious that forcing the executive branch to default on legally valid bills is also a bad idea. And if Obama once again evades default by making substantive policy concessions to House Republicans, then he’s going to normalize this hostage-taking process. Putting some other nutty ideas on the table, by contrast, might actually get us back to normal.

Greg Sargent, a Washington Post blogger who is a fan of the idea, concurs:

Of course “mint the coin” is absurd. It’s a response to a situation which is itself already absurd. Indeed, the GOP’s debt ceiling hostage taking is far more ridiculous — and destructive — than “mint the coin” musings are. By far.

But for every nutty liberal who has latched onto this idea with the enthusiasm typically only shown for campaign finance reform (cf. the doomed “DISCLOSE” Act) and restrictions on drone warfare (cue civil-liberties pitbull Glenn Greenwald), there are a dozen more restrained voices. Ezra Klein notably does not endorse the proposal, and even supporters realize that the idea is harebrained. The Washington Monthly’s Ryan Cooper, while remaining open to the idea mainly because he likes the paroxysms it induces in conservatives, writes acidly that “This is an elegant solution – if you are a cartoon villain given to sitting in a vast underground bunker and innovating plans for world domination while petting a white cat. It makes less sense for real mortals. In fact, it has all the aspects of a group of well-financed mad scientists plotting to create a giant slingshot to avert an asteroid hurtling towards the earth.”

But back to the proposal from the gentleman from Oregon. Walden’s legislation is an embarrassment to the generally reasonable voters in my home state. He isn’t proposing a bill to, say, establish a moon colony (thanks for the idea, though, Newt), but what he has put forward is not a whole lot better. Granted, it’s ridiculous legislation in reaction to a ridiculous idea, but pundits are free to float ridiculous ideas. In fact, that’s a pundit’s job — and folks like Thomas Friedman make a great living at it. It’s the job of legislators to focus on actual issues, not far-fetched gambits from the op-ed page. To gum up the already-dysfunctional legislative process with more stupid bills is irresponsible. By taking a joke seriously and dignifying a silly idea, Walden’s proposal achieves the opposite of its intention, turning our governing process and elected officials into the joke instead of the What If Brigade. The joke is not on Paul Krugman, who’s not advocating a realistic policy anyway, but on voters whose time and money is wasted on such political grandstanding. Walden, of course, follows in the age-old tradition of lawmakers pushing useless legislation, like the Todd Akin-esque crusade to define life at conception or the 30-plus times Republicans have voted to repeal Obamacare. Ron Paul’s bills to shut down the Federal Reserve are generally bottled up in committee, and left-wing proposals to roll back Citizens United have been similarly stymied.

This doesn’t even address another fundamental stupidity of Walden’s news release, in which he writes: “My wife and I have owned and operated a small business since 1986. When it came time to pay the bills, we couldn’t just mint a coin to create more money out of thin air.” Josh Barro, an otherwise lucid thinker whose support of the platinum coin gambit undermines his general economic savviness, has a good point about that:

Well, yeah, obviously the Waldens’ company couldn’t issue currency to pay its bills, because issuing currency is a function of the federal government, not of some random small business in Oregon.

There are all sorts of nonsensical statements you could offer with the same structure. For example, why should we have a U.S. Marshals Service? After all, when I ran a small business, we didn’t just go around arresting fugitives who were wanted for federal crimes.

Barro is a man after Paul Krugman’s own heart when he adds that “the mistaken idea that federal economic policy should be driven by the same internal logic as corporate or household budgeting has led to some of the worst ideas of the last few years, such as that governments should respond to budget deficits created by the economic cycle with tax increases and spending cuts.”

That someone like Walden, who exhibits such economic illiteracy, should be proposing a bill that deals with the economy is particularly frightening. Like the small business owner interviewed by the New York Times who evidently did not understand the concept of marginal tax rates, he is someone who should know better — but who obviously does not. Yes, folks, these are the peerless, all-knowing “job creators” constantly praised by the GOP and to whom the political establishment must always kowtow. If people like Walden truly hold the reins of the economy, the U.S. is in some real trouble.

Walden is reacting — overreacting, really — to what is essentially a liberal thought exercise. It’s an idea with a snowball’s chance in Hell that neverthless appeals to ivory-tower types who like to launch hypotheticals like scrapping the Constitution, selling Alaska or doing away with the electoral college. Nice in theory, not so hot in practice, and certainly not feasible in the short-term. Perhaps it’s technically and legalistically possible to mint platinum coins, but it’s certainly not politically realistic. Though conservative critiques of the idea are generally as misguided and ill-informed as the theories of the proponents — it wouldn’t, contra right-wing doctrine, be “wildly inflationary” — they actually dovetail with the Obama administration’s position of not taking it seriously. Even the right wing nuts who accuse Obama of ignoring the constitution (amnesty! recess appointments!) and the left-wing radicals who think his counterterrorism policies violate that sacrosanct piece of 200-year-old paper don’t think he would do something so blatantly out there, or jab such a sharp stick in Congress’ eye.

Devoting legislative resources to refuting such an imaginary plot dignifies the very idea Walden rejects. There is considerable irony in this editorial fromm the conservative Washington Examiner:

At moments of levity, the 14th Amendment and collectible coin schemes are both good for a chuckle. But our country also faces real and tough problems that demand real solutions. The Left does itself and the nation no favors by taking these schemes seriously.

Disregarding the bizarre, Tea Party-esque tic for capitalizing regular words (conservatives call it “the Left,” just as they write about “the great Nation” and the need to “defend Liberty”), Walden is the one taking the scheme seriously. Sure, the guy voted for the recent deal to avoid the fiscal cliff, but in no universe can the chair of the National Republican Congressional Committee be considered part of “the Left.” There are lots of people who take seriously the notion that Elvis Presley is still alive somewhere, but to legitimize that belief by, say, proposing a bill to declare the King officially dead is to give credence to the silliness. It lowers rational people to the level of the so-called crackpots they condemn.

In short, the platinum coin scheme isn’t going anywhere, and everyone knows it — even if Jerrold Nadler and company pretend otherwise. The administration has rejected even the idea of invoking the 14^th Amendment’s guarantee that “the validity of the public debt of the United States . . . shall not be questioned” to simply ignore the debt limit, a more mainstream proposal that even Bill Clinton and Nancy Pelosi have entertained. Politico quotes White House spokesman Jay Carney as describing the debt ceiling as a problem that needs a political solution, not a tortured thought-experiment one. “The way to prevent a debt ceiling crisis is not to manufacture one,” Carney told the press. “Congress has the responsibility to pay the bills Congress racked up.”

So it seems commandeering the mint, despite Krugman’s pleas, is not even on the radar. Yet people keep talking about it, because tossing out counterfactuals and bizarre proposals gives pundits something to drone on about in the doldrums of a legislative recess. When Chuck Hagel’s nomination to head the Department of Defense is the big story of the day, you can hardly blame the opinion writers for throwing fuel on Greg Walden’s fire. Walden, however, is not an opinion writer. He’s a member of the House of Representatives, someone Oregonians sent to Washington to help run the country. That he does not understand or appreciate the distinction is the fatal flaw highlighted by his press release, which is nearly as silly as the scheme he hopes to forestall. “Some people are in denial about the need to reduce spending and balance the budget,” he states on his website. Of the platinum coin scheme, he aims to put the fear of God into Paul Krugman, boasting, “I’m introducing a bill to stop it in its tracks.”

Well, the world can rest easy now that Greg Walden is on the job, bravely shooting down ideas that are already dead in the water. It’s reminiscent, slightly, of the apocryphal story of Sarah Palin gunning down a wolf from a helicopter*: the same display of disproportion, like swatting a fly with a Bazooka. There’s a difference between pundits and politicians, between Fox News talking heads and elected officials on the public payroll, but Greg Walden, sadly, does not seem to know the difference.

* Palin supported aerial hunting of wolves, caribou and other “predatory animals,” but it seems to be a myth that she actually did any helicopter-borne shooting herself.