Economy's mojo and Washington's no-go
Economic indicators are up slightly. Do consumers and investors perceive an end to the great political uncertainty in Washington (and Europe)?
Is the Great Uncertainty of 2010-11 coming to an end?
There are even hints of Washington breaking the budget impasse in November. But hints only.
Ever since the Great Recession of 2008-09, the economy has been stuck in a cautionary mode about the staying power of the recovery. And one big cause is investor and consumer uncertainty about government action – or inaction.
“We are uncertain about the future,” say William Dunkelberg, chief economist for the National Federation of Independent Business, which represents small, job-creating firms. “And government is a high source of our uncertainty.”
People want durable decisions from Washington in order to make calm, long-term investments in their future. Instead, they are asking these still-unanswered questions:
Will taxes be raised or lowered? Will they be only temporary? Can Washington help raise home values or not? Will the new health-care law be implemented or repealed? Will proposed regulations be suspended or imposed?
President Obama is very aware of the impact of all this iffyness. In September he paused the Environmental Protection Agency’s implementation of proposed rules on power plants because of what he called a “regulatory uncertainty” on the economy. Indeed, energy companies have long pleaded with Washington to make up its mind about climate-change rules – regardless of how soft or stiff they are – so they can make decades-long investments.