Bulls betting on GOP nostalgia

Classic Republican motivations could keep the government shutdown short.

By Jim Cramer Oct 1, 2013 9:27AM

Bull © Photographers Choice RF, SuperStockI will say this about the more "out there" Republicans in Congress. They are not about TheStreet logo

business. Not one bit.

 

For most of my life the Republican party was the party of business. The GOP stood for whatever was good for sales and profits. The left would always claim that's because the Republicans were rich and their constituents were rich. Every now and then, particularly in the Northeast, you would hear about Republicans who balanced these issues with concerns about workers. These were noblesse oblige Republicans.

 

Republicans were about capital and Democrats were about labor. But over time, we've seen Republicans cleave into two parties, a majority that says it is pro-small business -- which is not the capital wing per se -- and a minority that doesn't respect the primacy of the federal government itself.

 

The minority, which hates being characterized by anyone other than themselves, seems to have become more about single issues, to play to their base so they can get on the ballot as Republicans in their re-districted safe seats. The intense voters in primaries are not pro-business (that I can tell) and right now, at least, these Tea Party-like GOPers are willing to sacrifice a lot of the old mantras to get their nominations.

 

In fact, the Republicans in this wing of the party think they would be sacrificed if they went with the old capital mantra. They can't be appealed to by someone in the GOP who is pro-capital because a pro-capital view could cause them to lose their nominations the next time around and they don't seem to need the funds from the pro-capital wing to win. This wing of the party seems united by only one thing: hatred of the president.

 

Now, to prove a point, anyone can try to throw a monkey wrench into things. Republicans of all stripes seem to want to hold up a budget that can be considered too profligate by some in the pro-capital wing and too Democratic by those die hards who don't understand their party lost the general election.

 

But you would not expect the monkey wrench at the full faith and credit of the U.S. government to be thrown by the Republicans. Aren't there enough Republicans who love bonds? Why would they risk destroying the value of what they thought were the bedrock investments of themselves and their constituents?

The Democrats -- the party of labor -- that's who would be willing to throw the bond market into turmoil. The party of the disenfranchised worker, that's who would throw that wrench.

 

But that certainly isn't the case now. If anything, I expect the president to go to the Supreme Court to enforce the Constitution, which demands that the nation's bills be paid.

 

Now it is still true, to some extent, that the Republicans stand for less regulation. I say to some extent because I think the previous administration didn't roll back a lot of regulations at all. They just didn't try to enforce them very hard.

 

But, in the end, the Republicans as we remember them at least, stood for a simple principle: if it was good for business, it was good. I think that's why, in the end, people in the market don't think the shutdown can last all that long because they remember when that rock-ribbed Republican Defense Secretary and former GM (GM) CEO Engine Charlie Wilson said "what's good for the country is good for General Motors."

 

I don't think that the Republicans, who are fighting even their own party over the shutdown and the debt ceiling, believe that any more. I think they probably think "a pox on labor's and capital's heads."

 

The perception's dying hard. Most people in the markets can't accept anything other thanthe idea that it is the Democrats who would all question the value of our bonds because of a belief that other issues could be more paramount to Treasury.

 

The simple fact is that's no longer the case.

 

The bulls today are betting that there are enough of the old Republicans to stop the new Republicans. They are not betting that the president's going to do anything, because, alas, he's not sitting there thinking "how can I help win over the business wing of the Republican Party?" I think he's thinking that he's watching the party of the rich implode, and that opportunity won't be missed.

 

So those who are buying today are betting that the shutdown won't impact the numbers of the S&P companies and that the debt ceiling will be lifted by hook or by crook or by the Supreme Court.

 

They'd better hope so. Or they are going to be on the wrong side of this market, for certain.

 

Random Musings: My good friend Chris Matthews, who has the must-read "Tip and the Gipper" out today (I love all of his books) is looking for a protracted shutdown which, needless to say, is not in the numbers. Chris is too close to this to believe we shouldn't be thinking this more doomsday scenario couldn't happen. I still think it is an outside chance. But Chris is always worth listening to, and reading. 

Jim Cramer Headshot


Action Alerts PLUS, which Cramer co-manages as a charitable trust, has no positions in the stocks mentioned.

 

 

 


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241Comments
Oct 1, 2013 10:00AM
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I am very disappointed in Congress.  I think that these folks should not get paid either during the shutdown.  Matter of fact, why do we pay them at all as they do nothing for the 99%!!!
Oct 1, 2013 10:07AM
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Jimmy, Computer programs trading among themselves aren't aware that the Government is shut down.
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The only problem I see with the shut down is the Non-essential people will most likely get back pay for being off when they come back to work.   If you are so non-essential, why should you even have a job?  

 

Where else can you get laid off and still collect your full pay?  Only in the American Public Worker's Sector.   What a racket!!!!    The Democrat's new American slave (working people) pays for it all.

Oct 1, 2013 1:43PM
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In 1995, the newly elected Republican Congress passed a Congressional Accountability Act to fulfill a promise made the previous year in the Contract with America. For the first time, the Act applied to Congress the same civil-rights employment and labor laws that lawmakers had required everyday citizens to abide by. With some lapses, it’s worked well to defuse public outrage about “one law for thee, one law for me” congressional behavior.

In 2009, Senator Chuck Grassley (R., Iowa) decided that the principle deserved to be embedded in Obamacare, and he was able to insert a provision requiring all members of Congress and their staffs to get insurance through the Obamacare health exchanges. “The more that Congress experiences the laws it passes, the better,” said Grassley. Although his amendment was watered down before final passage to exclude committee staff, it still applies to members of Congress and their personal staffs. Most employment lawyers interpreted that to mean that the taxpayer-funded federal health-insurance subsidies dispensed to those on Congress’s payroll — which now range from $5,000 to $11,000 a year — would have to end.

Oct 1, 2013 1:04PM
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Go home mob mentals.  Get a grip, who makes good sense when they are soo very angry? The one and only plan is to maximize our own lives, interests, and the people you come across.  Screaming and blaming is no different than a child whining or spinning your tires off the line.  What can we do contructive at this point?  I'm serious what can we actually do constructive to get this ship righted? We are in chaos with no clear enemy or line to advance toward.  So stop effin screaming and start thinking.  We together are all that will matter so we need to understand we are divided and a divided house will not stand.  Please stop playing this divisive game of blame and hate.  We have a country WE need to take care of.  Friends family and ourselves are all that really matter.  Take care of those around you and weather the storm. The media is not an ally, for they are also out for themselves, so at this point word of mouth is all we have.  Don't allow yourself to be the chump. Talk calmly and make sound suggestions as to what we can do to solve this dilemma. WE will get this righted. It will work but work out even better if WE remain calm and support each other.  This may also take longer than we think so be prepared.  As soon as we stop blaming and direct our BRAINS at the problem a solution is much more likely to appear.  I support a fault free sign up period for one year.  Let folks dip their feet in this new water and see.  Any time something new comes along it takes a period to adjust so let folks decide on their own if this is what they like in terms of medical care or possibly another approach. So what do you think will work?

 

Oct 1, 2013 11:29AM
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Government shutdown?  Where's the downside in that?  Maybe they'll stay out of our shorts for a while.....
Oct 1, 2013 12:32PM
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Well, actually the problem is they promise and state approaches when running for office that they have NO intention of seriously working on or that does not benefit them. We have no leverage to control them after the elections until the next election. This is not a good way to go in the future. They are up there to make money and build a network. They all leave office to late and when they do they are much wealthier. We vote for President, we should be voting for their benefits and some other control measures at

the same time. Lets vote for term limits and pay raises only if they have a 75% approval rate. I am sure we have the technology to implement some direction for them, since they can't seem to find a direction that correctly benefits the USA citizens.

Oct 1, 2013 12:35PM
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Our system does not work by making laws and then not allowing them to be implemented. What is the point of making laws then? Republican's put forth what you do not like about the law and get it amended. We have a healthcare problem in this country and doing nothing does not fix it.  Where are the Republican's on the immigration laws being fixed and updated. Nothing is getting done. Voting 40 times on an abortion bill? What is this, we have already beat that dead horse for years... Let the States work on that one and get to some real work.
Oct 1, 2013 12:38PM
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There were 20 years of Dem Presidents before Eisenhower. Are you guys going to go for the NEW record?
Oct 1, 2013 1:40PM
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Prostitution. Bribery. Blackmail. Thuggery. Hypocrisy.

Those were just some of the incendiary words thrown around the U.S. Senate last week, and that doesn’t count what people said in private.

The Senate may still have a reputation as a genteel club, but lawmakers seemed to abandon rules of decorum completely last week in arguments about whether Congress should be treated like the rest of the country when it comes to Obamacare. 

Senator David Vitter, a Louisiana Republican, has demanded a floor vote on his bill to end an exemption that members of Congress and their staffs are slated to get that will make them the only participants in the new Obamacare exchanges to receive generous subsidies from their employer to pay for their health insurance. Angry Senate Democrats have drafted legislation that dredges up a 2007 prostitution scandal involving Vitter. The confrontation is a perfect illustration of just how wide the gulf in attitudes is between the Beltway and the rest of the country — and how viciously Capitol Hill denizens will fight for their privileges.


Oct 1, 2013 2:31PM
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I challenge anyone here to find an under thrity someone who plays this whining he said she said political party nonsense.  This blowing off back and forth is sooo old school.  Younger kids don't have the economic freedom to act up like this.  Get with the program.  It is the institution of politics that is corrupt and holding our country back. And the media is part and parcel to this distress.  The media has never had it so good seeing all this divisive abhorent behavior.  They will continue to stoke the fire as long as possible.  Even if it means more suffering and even violence in the streets.  The media is not American you know. 
Oct 1, 2013 10:21AM
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For years now, Wall Street wants everyone to believe that our Stock Market is unstoppable. For years now, Wall Street wants everyone to believe that even when everything is going south, we are doing so less than others. Fact is, the Global Fiat Crash Economies are all in the same sinking Boat. Most folks just are aware yet that it's sinking.

Economies across the Globe have been Printing and incurring debt on their way to prosperity for decades. Political parties across the Globe regardless of sides have benefited along the way. In effect, we have a Nuclear Type Economy that has entered a Meltdown Phase with ZERO way of safely shutting it down. In the end, it will be just like Japan's Fukushima disaster, buried but still leaking toxic waste everywhere.

Oct 1, 2013 12:02PM
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We have 16 days before a collapse of 20% or more on the market.  Buckle up!  I have my helmet on and ready for it.  I hope I am wrong for all you Bulls!  The bear in me has missed out on a lot upside.  The battle is on.
Oct 1, 2013 2:41PM
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I believe at some point people will look back at this and point to this as the start of the second Civil war.
Oct 1, 2013 1:06PM
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Mr Cramer, most posters try to be constructive, on subject, and keep obscenities out of their posts .
Oct 1, 2013 3:06PM
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Re-TOG;  I am not CGT11, I am a business journalist who has written about the dishonesty CGT11 is trying to expose.  I admire his courage.
Oct 1, 2013 10:33AM
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Just a reminder this is the 18th time in 36 years the gov. shut down. Averaging every 2 years. It has happened with Dems in the big house and Repubs in the big house. Vote Libertarian next time.
Oct 1, 2013 11:33AM
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Yet another announcement about layoffs in the pharmaceutical industry (Merck).  Less R&D, maximize profits.  Is pursuing new drugs no longer cost effective?  Currently I'm not holding any pharmaceutical stocks.

 

 

 

 

Oct 1, 2013 1:40PM
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If one does not like to read these comments it is easy to move on to another web site.... JMHO

Oct 1, 2013 1:45PM
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Senator Vitter says the OPM ruling has removed “the sting of Obamacare” from Congress. “Many Americans will see their health coverage dropped by employers, and they will be forced into the exchanges,” he told me last week. “If Congress is forced into them on the same terms, it will be more likely to fix Obamacare’s problems for others.” The bill he and his co-author, Senator Mike Enzi of Wyoming, have drafted would make everyone working on Capitol Hill buy insurance through the exchanges — with no subsidies. White House officials and political appointees in the executive branch would also be required to obtain health insurance through the exchanges.

The Congressional Leadership Empire decided to strike back at Vitter. Politicoreported that several Democratic senators have asked staff to draft legislation that would deny federal health subsidies to anyone who votes for the Vitter plan, even if Vitter’s plan doesn’t become law. An even more spiteful draft bill would bar subsidies to any lawmaker or aide found by a congressional ethics committee to have “engaged in the solicitation of prostitution.” In 2007, Vitter’s phone number was found in the records of the “D.C. Madam,” the owner of a high-end prostitution ring. Back then, Vitter held a news conference with his wife standing next to him and apologized for a “serious sin” that he refused to discuss further. He was reelected with 57 percent of the vote in 2010.


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