Will Washington Work?
What major policy changes are possible in a highly partisan political climate?
The World Economic Forum posted a summary of the session. It is below (although I corrected the spelling of panelist in the piece):
Will Washington Work?
What major policy changes are possible in a highly partisan political climate?
Key Points
- Washington has stumbled before, but each time a strong leader, and one able to bridge the gap between the Democrats and Republicans, has righted it.
- Government mistrust and bipartisan bickering are not going away.
- Despite government dysfunction, the US remains the best place in the world in which to invest because of its human capital, laws, the ease of exiting and its stability.
In the late 1920s, Americans despaired about the quality of their government until Franklin D. Roosevelt, who won a landslide victory in the 1932 presidential election, restored American optimism and led the country through the Great Depression.
A similar spirit of pessimism shook America in the 1960s and 1970s, from President Richard Nixon’s resignation to the presidency of Jimmy Carter, until the unlikely presidency of Ronald Reagan regained the country’s faith in their government. In 2013, a majority of Americans believe their country is in decline. As one participant opined, America no longer faces the existential threat of Russia, but the threat of turning into France and entering into a period of “elegant decline”.Can Americans snap out of it a third time? Or will the epitaph for this era be, in the words of one participant, “slightly above zero”?
People felt “there would be a real change” after the election, but instead it is the same as before, said one panelist, who cited Obama’s inauguration speech. Abraham Lincoln used the phrase “malice towards none” in his second inaugural.“Obama didn’t have that,” said one participant. “Instead, he said‘this is what I want and I’m going to fight for it.’” This is especially ironic, added one participant, because Obama catapulted himself to fame with a speech at the 2004 Democratic Convention where he argued there were no red states or blue states. Today, however, Washington is marked by polarization along party lines.
Members of the US House and Senate do not stay in Washington DC over the weekend, bemoaned one panelist. “They don’t work on big issues because big issues have been taken away.” Another panelist blamed the tone of the debate, and compared political attacks ads with business ads: Soft drink competitors do not do attack each other in ads; if they did, sales would go down and then, eventually, the market would shrink, hurting both companies. Because of bipartisan mistrust, that market has shrunk and Americans are less engaged with politics.
While the gap between Democrats and Republicans is unlikely to shrink anytime soon, the US economy will likely regain its footing. “Obama seems like he might be more appreciative of business leaders during his second term,” said one panelist.
Markets around the world do not worry about the US government. Japan, China and Saudi Arabia are willing to invest in 10-year treasury bills with yields of under 2%, therefore,the United States can afford to handle its debt until something gives.
Disclosures
This summary was written by Isaac Stone Fish. The views expressed are those of certain participants in the discussion and do not necessarily reflect the views of all participants or of the World Economic Forum
