Who Does Congress Really Listen To? (it’s not us)

Fiscal Cliff vote in the House.

Who forced a fiscal cliff deal? Try

foreign investors

Washington is now all too aware that foreign

creditors and investors will punish it for any

macroeconomic mismanagement. American

competitiveness was at stake in the fiscal cliff

negotiations.

By the Monitor’s Editorial Board | Christian Science Monitor 

Take a guess. Which of these put more pressure on US lawmakers to strike a deal and avoid the “fiscal cliff” – voters or global financial markets?

If you picked markets, you may be right.

On the day after the last-minute agreement, an uptick in global stock prices seemed far more welcome in Washington than the reaction of voters. The reason is that foreign creditors to the US Treasury had been near a tipping point in wanting their money back, possibly forcing a crisis for US debt.

Investors worldwide now demand the US government display more stability and trust. Globalization has given them a big say in the policy logjams of many countries, and the United States is not immune. Its lingering disputes over issues like taxes and spending have become a prime indicator of its ability to remain innovative, reliable, and productive.

Elections do have consequences, for sure. But today so does a country’s economic competitiveness, measured in part by its level of dependability, openness, and flexibility in governance. On those sorts of attributes, the US needs work. Consider these latest rankings:

On a global index of innovation, the US has dropped from No. 1 in 2007 to 10th. On economic competitiveness, it has dropped to seventh in the last few years. And compared with other countries, the trust by Americans in their government ranks 54th.

The greatest weakness of the US is seen in its lack of macroeconomic stability. On that measure it fell last year from 90th to 111th.

Economic freedom in the US has been falling and now ranks 10th – behind even the African country of Mauritius. It ranks fifth in the ease of doing business, according to the World Bank.

In 2012, the US fell from the top tier of a “global prosperity index,” which measures such nonmaterial factors as entrepreneurship, safety, education, and governance. It now ranks 12th. (Read more here.)

  • http://ashesfromburntroses.blogspot.com/ Manny

    The fact that we are tenth in economic freedom is disgraceful. If anything the United States of America should be about it is economic freedom. And raising taxes does not make the country more economically free.

    • Rebecca Hamilton

      Manny, I think a lot of the loss of economic freedom has come about because of corporate interests getting “their” legislators and congresspeople to pass laws for them to keep them from having to compete. I don’t have an exact percentage, but almost all the bills that actually make it through the process in Oklahoma are written by special interests to help them gain an unfair advantage over their competition. It is depressing when you are a legislator because almost everything you have to vote on harms the people in some way.

  • http://ashesfromburntroses.blogspot.com/ Manny

    No question special interest is a big factor, but why do people keep voting for them if they are not listening to their constituents? The re-election rate for legislators is in the 90-something percent. Is it possible that they do listen to their constituents and listen to special interests at the same time? They are not necessarily mutually exclusive. The question is, what does the public really want? They want low taxes and free government handouts, and by the look of the deficit that is exactly what legislators are providing.

    • http://www.rosariesforlife.com Dave

      “why do people keep voting for them”

      Because there are only two choices, and one of the choices is more in line with the values of the people in that particular district. Both candidates are basically crooks or puppets (or both), but everyone wants to keep the “even scarier” crook/puppet from getting in.

      • Manny

        Well that’s pure cynacism. Is there some truth to that? Sure but it’s not the compleyte truth. I choose not to be cynical. Cynacism destroys the soul.

        • http://www.rosariesforlife.com Dave

          I agree, in general, but sometimes the cynical view is the truth, and when big government and big business come into play, it’s really all about the money.

          You have correctly hit upon a major weakness of government though. Short re-election cycles lead to the elected representative/senator being always concerned about re-election. Most Americans are not educated (and/or paying much attention) enough to look deeply and see that a representative is following a sensible long-term path. Rather, they want short term results, and so that is what they get, at the expense of the long-term future of our country. It’s “Bread and Circuses.”

  • Will

    We need to look at things with a long range view. Education, infrastructure, and research and development must be bigger priorities. We should spend less on defense and close many overseas bases.