The Week in Review: Political & Economic Uncertainty
Michael Arnone ‘15
In the last few days, three separate issues have developed that have supplemented political and economic uncertainty: Wall Street has begun preparing for the potential catastrophe of the looming fiscal cliff, concerns have been raised regarding the security arrangements at the U.S. mission in Benghazi that was attacked in September, and Republicans have started to decry the general consensus that President Obama is ahead in most national polls.
Since the 2008 financial crisis, the global economy has been severely hobbled by a series of financial shocks that originated in the U.S. housing market, and it appears that another such shock is on the horizon. This one, however, is very much political in nature and entirely preventable. An article from Friday’s New York Times details renewed fears among investors that inaction in Washington and indecision in Europe may undo much of the economic progress made in the third quarter. Congressional failure to deal with the self-imposed fiscal cliff has many on Wall Street worried that we will slide back into a recession in January, when a $531 billion increase in taxes and a $140 billion decrease in spending are set to go into effect. In Europe, fears that Spain will not take advantage of the European Central Bank’s bond-buying program have added to a sense of uncertainty. Many on Wall Street have assumed that politicians on both sides of the Atlantic would reach some compromise this fall, but some are less than optimistic. Recent history suggests that our political leaders will reach an eleventh-hour compromise, but stalling for that long may have damaging consequences as nervous investors hesitate in the absence of political leadership.
In Libya, details continue to emerge regarding the assault on the American mission in Benghazi and the death of Ambassador J. Christopher Stevens. It is now clear that security at the compound was heavily dependent on local militias, rather than on American Marines. In the months leading up to the attack on September 11, 2012, growing unrest and violence toward Western diplomatic outposts in Benghazi led the State Department to take precautionary measures, though much of this had not come to light over the summer. Yet while security was a concern, the guards at the compound were overwhelmed and confused on the night of the attack—resulting in the deaths four Americans, including the Ambassador. This article is the latest in the New York Times with new information regarding the September 11, 2012 attack. As what exactly happened in Benghazi becomes clearer, the issue will undoubtedly surface in the presidential election—most likely during the first debate scheduled for this Wednesday. Mr. Romney botched his initial response, to say the least, but the debates provide an opening for him to make another jab at the Obama administration’s foreign policy. Whether or not that is politically wise or effective remains to be seen.
And Gov. Romney could use an opportunity to reset the race, as national polls suggest. Current polls have President Obama up by nearly 4 points, but many Republicans have started to openly suggest that this election’s polling is inaccurate because of poor sampling. Rush Limbaugh believes that such polls are meant to deceive and depress the Republican electorate in swing states. Yet the “parallel universe” in which Romney is winning the campaign extends beyond the realm of conservative talk shows. Unskewedpolls.com, a website that has readjusted polling sampling sizes to include more Republicans, shows Mitt Romney leading in every national poll. The insinuation that pollsters have conceived a vast conspiracy to deceive the electorate has many in the business incensed: “the Prime Directive of pollster survival is to make sure you ‘get it right’—whether that be good or bad—for your party,” explained Bill McInturff, who runs a respected Wall Street Journal/NBC News poll. But with the oversaturation of media in American society, it is very easy to find news—and data—that reinforces political opinions with little regard to accuracy, leading to insulated and warped opinions.
With a highly contested election four weeks away and economic uncertainty on the horizon, it is clear that America’s current state of affairs may leave deep scars for some time. Economic issues have been sidelined in lieu of political jousting, risking another recession. The death of the American Ambassador in Libya has left many questioning the policies of the Obama administration. And Republican partisans have invented an alternative reality in which Mitt Romney will win the election—all discomfiting events to be sure.