It’s been more than a week now since Congress put on the brakes and officially ended the bad being done by the shutdown. Unfortunately, the bad lingers on and the worst may be ahead. That’s because the shutdown was a symbolic manifestation of a much bigger ongoing problem that has had and will have significant economic, psychological and behavioral consequences.
During the shutdown, Rana Foroohar wrote an article for Time titled, “Congress is Bad for the Economy.” How “bad” is it? Let’s determine that by taking a look at each of these consequence areas beginning with the economic.
While the shutdown was going on for more than two weeks, there were new horror stories every day about the short-term costs and immediate effects such as closed national parks, veterans not allowed to visit monuments, fishermen not being able to practice their trade, and the families of deceased military personnel not receiving death benefits. The really big and telling long term story, however, came as the shutdown was winding down.
It was provided in a report, The Cost of Crisis Driven Fiscal Policy, produced by Macroeconomic Advisers, LLC, for the Peter G. Peterson Foundation (Peterson Foundation). That report concludes that to date “crisis driven government and the resulting fiscal policy uncertainty has directly harmed the American economy by increasing the unemployment rate by 0.6 percent or the equivalent of 900,000 jobs.” Going forward, the Report estimates that “a two week partial government shutdown would directly trim .03 percentage points from 4th quarter growth.”
Since its release, the study done for the Peterson Foundation has been and continues to be widely circulated and discussed. The New York Times reported that using the Macroeconomic Advisers projections, the 4th quarter cost alone would be about “$12 billion.” The Times noted, however, that “Standard and Poors was more pessimistic, estimating that the shutdown will cost about 0.6 percent” — or about $24 billion dollars.
No matter whose future projections will be more accurate, the damage that has been and will be done to the economy over the past three years due to Congressional gridlock runs into the hundreds of billions of dollars. Those are huge and disturbing numbers. Even more disturbing, is the impact this malfunctioning economy and Congressional dysfunction has on the psyche and behavior of the average American consumer and citizen.
Ms. Foroohar addresses the impact on the consumer in her Time article, observing that there is a “divide between the S&P 500 and Gallup’s consumer confidence numbers.” She draws upon an insight from behavioral economist, Peter Atwater, to note that these measures usually move in tandem but that “while markets are higher today than they were in their pre-crisis peak in 2007, confidence, which reflects perceptions about the strength of the real economy, is lower.”
The shutdown drove that confidence off the low road into the ditch. According to the New York Times, “The 16-day shutdown itself has already led to the biggest plunge in consumer confidence since the collapse of Lehman Brothers in 2008.”
The question becomes whether the “real economy” and this confidence will rebound. Robert Samuelson of the Washington Post is not so certain. He ends
his article, “The Shutdown Heralds a New Economic Norm,” as follows, “Economic growth serves as the social glue that neutralizes other differences. Without it, economic and political competition becomes a game of musical chairs, where ‘one person’s gain is another’s loss,’ King writes (Stephen King, author of When the Money Runs Out: The End of Western Affluence). There’s a ‘breakdown of trust,’ as expectations are continually disappointed. It’s an often ugly process that is convincingly confirmed by Washington’s current political firestorm.”
It’s not just a loss of trust in the economy that comes from this “political firestorm”. As — and possibly more important — it’s a loss of trust in the Congress, our institutions, and each other.
In April of 2010, The Pew Research Center published the findings from its then most recent study of government satisfaction and public trust in government in a report titled, Distrust, Discontent, Anger and Partisan Rancor. That study revealed “record discontent with Congress…” and “Public trust in the federal government in Washington is at one of its lowest levels in half a century.”
It would have seemed that there was no where to go but up from that low point. But the dismal record of the 112th Congress that served from January 2011 to January 2013 and the performance of the 113th Congress to date, has proved that opinion to be wrong.
Study after study has found that the citizen’s “trust gap” for Congress has been expanding rather than shrinking over the past three years. One study at the beginning of 2013 showed that Congress is less popular than lice, colonoscopies and root canals. That is bad – very bad for the concept and construct of American democracy as we approach year’s end and move toward yet another potential debt ceiling disaster at the beginning of 2014.
It does appear that cooler heads may prevail and there may not be another shutdown. Still what matters is not whether there is another shutdown but whether there will be a continuance of the breakdown of governance and regular order legislative decision- and policy-making. At this point, sadly, there appears to be little evidence that the brakes will be put on this break down.
In fact, the so-called “defeat” of the conservative right in the shutdown has intensified and amplified the noise from that side of the spectrum. Campbell Robertson of the New York Times puts it this way, “On talk radio and in the conservative blogosphere, the bipartisan vote on Wednesday to reopen the government without defunding President Obama’s health care law was being excoriated as an abject surrender and betrayal by spineless establishment Republicans.”
That’s the “breaking bad news.” The “braking good news” is there is some counterbalance to this perspective in the American populous writ large and there could be a nascent, emerging one in the Congress as well.
In the middle of 2013, The Atlantic and the Aspen Institute released its American Values Survey which was discouraging on the one hand in that it showed a strong divide among the respondents on social issues such as guns and abortion. It was encouraging on the other hand, however, in that 95 percent of the respondents felt “unity” was very important with 75 percent agreeing that we need greater unity.
Combine this with results from a recently released Esquire-NBC news survey and there is a cautious reason for optimism based upon the attitudes of the American citizenry. That survey according to Esquire shows that “there is a large group of American voters — even a majority — who make up a New American Center that is passionate, persuadable and very real. They are merely waiting for Washington to find them.”
There’s only one catch — this might be like waiting for Godot. We are living in an era in which the opinions and needs of the center-left and the center-right — the moderate middle that is — appear not to count. Congressional actions and inaction have had serious unintended consequences — at least we hope and pray they are unintended — for those folks and for the vast majority of Americans.
Put very simply, Congressional gridlock is killing the American dream. It is being sacrificed on the altar of ideological purity and partisan sanctimony. We need to put the brakes on that approach or we will break apart.
Breaking Bad was a popular and award-winning TV series with an ending which according to almost every critic was not a happy but an appropriate one. Braking Bad is what we desperately need now from Congress — not for an ending but for a new beginning for the United States and the American people.