Conventional wisdom has it that the Republicans were the political losers of this latest fiscal crisis. As a late-breaking NBC/Wall Street Journal poll revealed, the public's scorn was directed most pointedly at conservatives. More specifically, many Americans believe that it was the tea party's unyielding demands that drove Washington into paralysis.
But while it is widely held that the government shutdown was pointless and harmful, it would be a mistake to conclude that uncompromising politicians were acting irrationally. The uncomfortable truth for those frustrated with Washington is that the tea party legislators were sent to Washington to shake things up. It's certainly fair to question whether we ought to maintain an electoral system that's been contorted to reward candidates from the far left and far right or a fundraising structure that encourages destructive tactics. But if the business of politics is getting re-elected, we have to acknowledge that many tea party Congressmen were simply doing their jobs.
Now, that's not to suggest that everyone was responding rationally to the prevailing incentives. Indeed, as we look back, what we really need to question is why the nation's economic leaders acted, until the very end, with seemingly little regard for their own self-interest. In the run-up to the crisis, the titans of the business community – a group which knows quite well how to exert influence in the corridors of power – largely watched from the sidelines. Sure, they signed letters suggesting it'd be better for the Washington to get its house in order and met with the president to voice their concerns. But more generally, they averted their eyes in the hopes that some among their peers would take on the extremism threatening the economy. It was, in essence, a corporate version of the tragedy of the commons.