How Washington Will Fail the Next Crisis

A domestic crisis could swiftly lead to meltdown in the U.S. 

One of the narrative threads in The Sleepwalkers, Christopher Clark's account of Europe's backward march into calamity in 1914, is the acute dysfunction within various European governments, where political leaders, ministries and political factions worked at vigorous cross purposes. A senior German commander noted that in Germany "the Kaiser made one policy, the Chancellor another [and] the General Staff came up with its own answers." In France, President Raymond Poincare and army chief Joseph Joffre withheld details of the military's deployment plans from Minister of War Adolphe Messimy.

The engagement, across the continent, of monarchs whose powers were neither absolute nor clearly circumscribed only added to the confusion.

"The chaotic interventions of monarchs, ambiguous relationships between civil and military, adversarial competition among key politicians in systems characterized by low levels of ministerial or cabinet solidarity, compounded by the agitations of a critical mass press against a background of intermittent crisis and heightened tension over security issues made this a period of unprecedented uncertainty in international relations."

Despite persistent dysfunction in Washington, the U.S. is in little danger of coming similarly unglued in an international crisis. The executive's already substantial control of foreign policy has tightened in recent decades, with Congress all but ceding foreign affairs to the White House. There is no Vandenberg or Fulbright gaveling the Senate Foreign Relations Committee to order. (I'm pretty sure a House Committee on Foreign Affairs still exists on paper.) The exertions of Congress in foreign affairs are generally pitiful, consisting mostly of the occasional saber rattle on Sunday morning. Meanwhile, infighting in the Barack Obama administration doesn't appear particularly excessive. Faced with a genuine international crisis, it would probably muddle through.

A domestic crisis, on the other hand, could swiftly lead to meltdown. As the nation's financial system was unraveling in September 2008, Republicans in the House voted by more than two-to-one against the initial Troubled Asset Relief Program rescue package put forth by President George W. Bush. (Democrats voted 140-to-95 in favor, although a majority of black and Hispanic caucus members voted down the $700-billion bailout, as well.) When the dust cleared, U.S. equity markets had lost $1.2 trillion in one day.

After a few days of high anxiety and the addition to the TARP package of tax cuts (which I'm reliably told smell like bacon to some Republicans), the House followed the Senate in approving the financial rescue.

The U.S. is not immune to another domestic crisis. Given, for example, that the nation's largest banks are larger today than they were in 2008, the finance sector is still capable of unpleasant surprises. Or perhaps some other sector or upheaval would sound the alarm. In such a scenario, what are the chances that the Republican House would vote for anything that could be perceived as -- pardon the metaphor's abuse -- saving President Obama's bacon?

A far less radical House Republican cohort refused to rescue its party's own president in 2008. And in 2008, Speaker Nancy Pelosi was both committed to aiding the Bush White House and capable of delivering the majority of her troops. Neither condition applies to current Speaker John Boehner, who is forever waffling between pretending to be one of the radicals and pretending to rise sensibly above them. (Neither pose is convincing.) The House invariably proposes a cocktail of inbred ideology and narrow cultural nostalgia to address any circumstance.

So while the U.S. seems in little danger of bumbling its way into the guns of August, the chances of full governmental paralysis in the event of a financial or domestic crisis seem exceptionally high. The White House would act. The Senate would almost certainly summon sufficient bipartisanship to aid the rescue. But House Republicans spend much of their energy dreaming up ways not to avoid crisis but to induce it. And they continue to do so in spite of fiscal, macroeconomic and historical realities that defy their ziplocked ideological convictions.

Faced with an emergency not of its own creation, we'd be lucky if the House didn't take the opportunity to set the furniture on fire.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.