In 2012, America’s Greatest Economic Weakness Was Its Government

In 2012, America’s Greatest Economic Weakness Was Its Government

The dysfunction of our political system is now sapping confidence from businesses and families. It may be the single biggest hurdle standing in the way of our prosperity.



Barack Obama said it himself in his first post-election press conference. Speaking at the White House on November 14, Obama said conversations with families, workers and small business owners along the campaign trail had left him convinced that average Americans deserved more from Washington.

“When you talk to these folks,” Obama said, “you say to yourself, ‘Man, they deserve a better government than they’ve been getting.'”


As 2012 comes to a close, partisanship is slowing our economy, making our children unsafe and reducing our confidence in the future. In 2008, egregious behavior by bankers and regulators could be blamed for gutting the economy. In the 1970s, high union wages could be blamed for reducing the competitiveness of American industry. Today, our political dysfunction is our biggest economic and social liability.

Example one: the fiscal cliff. After two months of absurd political posturing, the country is four days away from a wholly preventable economic body-blow that will stall a fragile recovery. The same dynamic that occurred last summer during the debt-ceiling fiasco is repeating itself. The failure to compromise on fiscal policy is eroding consumer confidence and slowing the economy just as growth begins to take hold.

The problem is not that American companies and workers are uncompetitive. It is not that manufacturing jobs are flowing overseas. Those economic trends have largely played themselves out. It is a new dynamic: political deadlock handicapping our economy.

Michelle Meyer, senior U. S. economist at Bank of America Merrill Lynch, said this week that “fiscal cliff” gamesmanship is a drag on the economy. Even if the cliff is averted in the next few days or weeks, Meyer estimated that the U.S. economy will grow by just 1 percent in the first quarter of 2013, a third of the 3.1 percent posted in the third quarter of 2012.

“What’s been missing in this recovery has been confidence,” Meyer told the New York Times. “We’d see a healthy recovery if it weren’t for this uncertainty and the potential shock from Washington.”

A second example is compromising on rising gun violence. In the wake of the murder of two firefighters in Rochester, New York and 20 first-graders in Newtown, Connecticut, the debate over gun violence devolved into a familiar pattern. Liberal commentators blamed the National Rifle Association. The NRA blamed the news media.

In truth, seizing the 300 million guns that now circulate among America’s 315 million people is unrealistic. So is placing armed guards in each of the country’s roughly 100,000 public schools. Instead, polls show that most Americans support a mix of reforms.

A majority of Americans continue to oppose a ban on assault rifles, a divisive issue that has long been supported by liberals but vehemently opposed by conservatives, according to polls. At the same time, the vast majority of Americans support stricter control of handguns, more effective background checks at gun shows, and a ban on large-capacity ammunition clips that hold dozens of rounds. In the wake of Newtown, improving our identification and treatment of the mentally ill is also vital.

Any attempt at enacting these reforms, though, is likely to stall in the House of Representatives, the same place that rejected Speaker John Boehner’s attempt at fiscal cliff compromises last week. Yesterday, Nate Silver of the New York Times joined a long list of analysts and academics who have found that both parties, though primarily Republican-dominated state legislatures, have used the redistricting of House seats to create a warped system that rewards political extremism, not compromise.

Over the last 20 years, the number of House districts that swing between political parties has shrunk by two-thirds from 103 in 1992 to roughly 35 today, Silver found. At the same time, the number of districts where parties win by landslides has nearly doubled from 123 to 242.

Today, 55 percent of House members come from districts where their biggest threat is losing a primary election, not the general election. Of the landslide districts, 124 are held by Republicans and 117 Democrats (one is an independent). They have little incentive to compromise. Instead, their incentive is to play to their party base. Making independent boards responsible for redistricting, as some states have done, would be far better.

Due to redistricting, the country’s demography and other changes, Democrats are likely to control the White House and Senate for years to come while Republicans are likely control the House, Silver found. The system is so rigged that swings in the popular vote for Republicans in House races in 2010 and Democrats in 2012 created unduly small changes in the House’s balance of power.

And lastly, to be fair, another culprit is at work in our paralysis: my business. In 2012, partisan news coverage triumphed. Following the model of Fox News, MSNBC tacked left, trounced CNN and firmly secured its position as the country’s second most popular cable news channel behind Fox.

MSNBC and Fox showed that creating bubbles where liberals and conservatives safely have their own views affirmed works. Simplifying complex problems and denigrating the other side sells. Fox was more excessive in my view with its peddling of false Benghazi conspiracy theories and Mike Huckabee’s claim that “removing God from our schools” caused the Newtown massacre setting new lows.

But the left brimmed with disdain as well. Republicans who refused to compromise were considered irrational, not following their interests in a system that is jerry-rigged toward partisanship. On both sides of the political spectrum in 2012, we were increasingly less open-minded, tolerant and empathetic. And all year long was saw that play out in Washington in ways that diminished us all.

This post originally appeared at, an Atlantic partner site.

Business : The Atlantic

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