Lawmaker Squabbles Cost U.S. 1.75 Million Jobs: Cutting Research

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http://www.bloomberg.com/news/2013-10-24/lawmaker-squabbles-cost-u-s-1-75-million-jobs-cutting-research.html

The mounting polarization of U.S. politics imperils the U.S. economy, robbing it of jobs and investment.

So warns economist Marina Azzimonti of the Federal Reserve Bank of Philadelphia, who created an index to measure the tone of political debate and its impact on hiring, investment and general economic growth.

“Polarization significantly discourages investment, output and employment,” she said in the study released last week by the regional Fed bank. “Moreover, these declines are persistent, which may help explain the slow recovery since the 2007 recession ended.”

Azzimonti’s political polarization index is based on a search of news stories to measure the coverage of lawmaker disagreement from January 1981 to April 2013. It climbed after recession ended in 2009 and peaked toward late 2012. At the time, politicians were trying to resolve the so-called fiscal cliff, which would have inflicted tax increases and spending cuts on the economy.