It's the political class, stupid.
The civil war is creating two obvious problems for American business: paralysis and uncertainty. The Obama administration is still pockmarked with vacancies because Congress refuses to approve routine appointments. Important trade deals have been languishing for months. The Republicans are fighting a war of attrition against Barack Obama’s health-care reforms and his new Consumer Financial Protection Bureau.
All this has immediate consequences for business. The federal government not only runs basic services such as the Federal Aviation Authority (where thousands of workers were briefly laid off because Congress refused to renew the FAA’s authority). It also accounts for a quarter of the economy. Scott Davis, the boss of UPS, the world’s largest package-delivery company, recently complained that FAA funding disputes made him unsure how many of his aeroplanes to fit with new air-traffic-control gear, while the failure to ratify a trade pact with South Korea weakened the case for expanding his fleet of aircraft and lorries.
The direst consequences of all this lie in the future, however. America’s health-care system consumes a sixth of GDP but produces only mediocre results. America’s schools produce run-of-the-mill results despite generous funding. The immigration system leaves 11m people in the shadows and condemns many of the brightest graduates of American universities to years of grovelling before bureaucrats if they want to stay in America. Many give up and take their skills back to India or China.
