America's political recession: Obstruction for electoral gain remains the name of the game

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I put the odds at about 36 percent that the United States will dip into recession next year. The reason is entirely political: Partisan polarization has reached levels never before seen, threatening to send the U.S. economy tumbling over the "fiscal cliff" -- the automatic tax increases and spending cuts that will take effect in January unless Democrats and Republicans agree otherwise.

More than a century ago, during the first Gilded Age, American politics was sharply polarized as well. In 1896, future President Theodore Roosevelt was a Republican attack dog. He denounced Democratic presidential candidate William Jennings Bryan as a puppet of the sinister governor of Illinois, John Peter Altgeld.

Bryan, Roosevelt said, "would be as clay in the hands of the potter under the astute control of the ambitious and unscrupulous Illinois communist." The "free coinage of silver" would be "but a step towards the general socialism which is the fundamental doctrine of his political belief." He and Altgeld "seek to overturn the ... essential policies which have controlled the government since its foundation."

Such language is as extreme as any we hear today -- and from a man who was shortly to become president. We have heard Texas Gov. Rick Perry call obliquely for the lynching of his fellow Republican, Federal Reserve Chairman Ben Bernanke, should he come to the Lone Star State. And we have seen Kansas Secretary of State Kris Kobach explore the possibility of removing President Barack Obama from the ballot in Kansas, because, Mr. Kobach suggested, Mr. Obama is "not a natural-born citizen."

But neither Mr. Perry nor Mr. Kobach is likely ever to be president, whereas Theodore Roosevelt was more than a partisan. He was happy to make deals with Democrats -- to put himself at the head not just of the Republican Party but of the bipartisan Progressive coalition, trying either to yoke the two forces together or to tack between them to achieve legislative and policy goals.

Mr. Obama broadly follows Ronald Reagan's (second-term) security policy, George H.W. Bush's spending policy, Bill Clinton's tax policy, the bipartisan Squam Lake Group's financial-regulatory policy, Mr. Perry's immigration policy, John McCain's climate-change policy and Mitt Romney's health-care policy (at least when Mr. Romney was governor of Massachusetts). And yet he has gotten next to no Republicans to support their own policies.

Indeed, like Bill Clinton before him, Barack Obama has been unable to get Republican senators like Susan Collins to vote for her own campaign-finance policies, Mr. McCain to vote for his own climate-change policy, and Mr. Romney to support his own health-care plan. Likewise, he has been unable to get Republican vice presidential candidate Paul Ryan to endorse his own Medicare cost-control proposals.

There are obvious reasons for this. A large chunk of the Republican base, including many of the party's largest donors, believes that any Democratic president is an illegitimate enemy of America, so that whatever such an incumbent proposes must be wrong and should be thwarted. Republican cadres believe this of Mr. Obama even more than they believed it of Mr. Clinton.

This view clearly influences Republican office-holders, who fear the partisan beast that mans their campaign phone banks and holds the purse strings. Moreover, ever since Mr. Clinton's election in 1992, those at the head of the Republican Party have believed that creating gridlock whenever a Democrat is in the White House, and thus demonstrating the government's incapacity to act, is their best path to electoral success.

That was the Republican calculation this year and last -- and the November election did not change the balance of power anywhere in the American government: Mr. Obama remains president, the Republicans remain in control of the House of Representatives, and the Democrats control the Senate.

Now, it is possible that Republican legislators may rebel against their leaders, arguing that they ran for office to govern, not to paralyze the government in the hope that doing so will give the party power to reign as it wishes after the next election. It is possible that Republican leaders like Reps. John Boehner and Eric Cantor and Sen. Mitch McConnell will conclude that their policy of obstruction has been a failure. They might note that, although the economy remains deeply troubled and depressed in the aftermath of a financial crisis for which they set the stage, Mr. Obama's policies have been by far the most successful of those in any major advanced country and conclude that he has been a relatively good president, and one worth supporting.

But don't count on it. Right now, every senior politician in America is telling their favorites in the press that they are confident that compromise on the "fiscal cliff" will be reached before the end of December. But they are telling their favorites this because they think that pessimism now will lead to their being blamed for gridlock later.

It seems to me that the odds are around 60 percent that real negotiation will not begin until tax rates go up in January. And it seems to me that, if gridlock continues into 2013, the odds are 60 percent that it will tip the United States back into recession. Let us hope that it will be short and shallow.


J. Bradford DeLong, a former U.S. Treasury official, is professor of economics at the University of California at Berkeley. Copyright (C) Project Syndicate.


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