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Don't blame 'Washington'

"The government" isn't hurting the economy. Republicans are.
/ Source: MSNBC TV

"The government" isn't hurting the economy. Republicans are.


Politico’s Ben Whitewants to explain “How Washington Is Killing The Economy.” Reuters’s Andy Sullivan reports, “Washington Becomes The Biggest Risk To The U.S. Economy,” and Reuters’s Jason Lange follows up with “Is Washington Infighting Hurting The Economy?” A Tampa Tribune editorial grumbles, “Washington Shenanigans Killing Economy.” The Motley Fool’s Travis Hoium and MarketWatch’s Anthony Mirhaydari saw it coming, describing “How Washington Could Kill The Economy” and how “Washington Is About To Kill The Economy” on the eve of the government shutdown.

Nearly all the stories described the (very real) threat that government actions posed to the economy as emanating from some undifferentiated blob called “Washington.” But polls taken during the past month have consistently shown that most Americans understand a dimension to this problem that many in the press dare not say out loud. “Washington” isn’t killing the economy. The Republican party is.

The two main “Washington” manifestations threatening the economy were the government shutdown and the debt-limit battle. Both were the result of ludicrous intransigence by the House GOP’s reactionary wing, which sought to defund Obamacare, and the reluctance of House Speaker John Boehner to ignore his party’s wingnut caucus. Polls showed that the public realized this. An Oct. 10 NBC/WSJ poll, for instance, found that 53% of respondents held Republicans principally to blame for the shutdown. (During the 1995-6 shutdowns, which the public also blamed on Republicans, the percentage had been much lower, ranging from 43% to 47%.) Fully 70% said Republicans were putting their political agenda ahead of what was good for the country. And while a 43% plurality opposed Obamacare, a larger 50% plurality opposed defunding the program.

Compare that to Reuter’s Sullivan’s assessment that the problem was “Washington’s policy blunders,” “governance-by-crisis,” and “the political circus in Washington.” The implication is that Washington is intrinsically dysfunctional, no matter who’s in charge, and that blaming one political party or another is very much beside the point.

Another “Washington” manifestation these news sources (rightly) find fault with is the budget sequester, which (as the Washington Post’s Bob Woodward never tires of pointing out) was the Obama White House’s own idiotic idea. But it was a ransom payment: Obama’s successful (if ill-considered) attempt to persuade Republicans to pretty please raise the debt limit in 2011 and not crash the world economy.

Republican culpability for the shutdown, debt-limit shenanigans and sequester is sufficiently obvious, one presumes, to Politico’s Ben White that he had to cast a wider net in order to blame “Washington” rather than “Republicans” for “killing the economy” (which is actually growing, albeit slowly and unequally). According to White, the nation’s economic difficulties are further compounded by Obamacare and the rogue national security state.

Obamacare is hurting the economy, White contends, because businesses are “reluctant to add full-time workers or expand beyond the 50-employee threshold” that makes them subject to the law, and also because of Obamacare’s “troubled rollout.” The first point to make is that these two problems, assuming they’ve had any economic impact at all, ought to cancel one another out. Businesses ought to be less fearful of Obamacare precisely to the extent that its technological glitches risk delaying its implementation.

More fundamentally, though, there is absolutely no evidence that Obamacare, whose employer mandate has been delayed until 2015, is having any impact whatsoever on employment, a point White himself concedes (“jobs numbers do not necessarily suggest that the now-delayed employer mandate under Obamacare is creating more part-time and fewer full-time positions”). What little evidence there is suggests affirmatively that it is not having any impact. White gets around this difficulty by lamely citing “anecdotal reports.” As for any claim that the many glitches in Obamacare’s Web site threaten the economy, White is unable to explain how, except that it will “add to a growing sense on the part of the public that the executive branch and Congress are both only barely functional.” 

The national security angle is, if anything, an even bigger reach. Reports that the U.S. government monitored Angela Merkel’s cell phone, while certainly embarrassing to the Obama administration, have no obvious economic dimension. So White gets creative, quoting Ian Bremmer, a media-friendly specialist in political risk, to the effect that some trade deals might not move forward as a result—an outcome that’s both highly unlikely and irrelevant to the current state of the economy.

White also argues that the Fed is roiling the economic waters through its stimulus program. Should the Fed end its stimulus prematurely, stocks could tumble. But of course the Fed will base its decision on when to halt stimulus precisely on whether doing so would have an adverse impact on the economy. To blame our economic troubles on the Fed is like saying that when I stop my car at a crosswalk so a mother can push a baby stroller across the street, I am causing the infant harm. Because what if I change my mind and hit the gas?

Yes, the White House and the Senate are controlled by Democrats, and these Democrats have an impact on the course of economic policy. But if you insist that they share the blame, blame them for not yet figuring a way to de-fang the extremists currently dominating the opposition. That extremism is the real problem, and just about everybody knows it.