As a political barometer, the Davos World Economic Forum usually offers up some revealing indicators of the global mood, and this year is no exception. I heard of a phrase being bandied about here by non-Americans — about the United States — that I can honestly say I’ve never heard before: “political instability.”
“Political instability” was a phrase normally reserved for countries like Russia or Iran or Honduras. But now, an American businessman here remarked to me, “people ask me about ‘political instability’ in the U.S. We’ve become unpredictable to the world.”
Banks, multinationals and hedge funds often hire foreign policy experts to do “political risk analysis” before they invest in places like, say, Kazakhstan or Argentina. They may soon have to add the United States to their watch lists.
You can understand why foreigners are uneasy. They look at America and see a president elected by a solid majority, coming into office riding a wave of optimism, controlling both the House and the Senate. Yet, a year later, he can’t win passage of his top legislative priority: health care.
“Our two-party political system is broken just when everything needs major repair, not minor repair,” said K.R. Sridhar, the founder of Bloom Energy, a fuel cell company in Silicon Valley, who is attending the forum. “I am talking about health care, infrastructure, education, energy. We are the ones who need a Marshall Plan now.”
It is a shame because here we are as a country scrounging around for a few billion more dollars of stimulus to help our unemployed and small businesses — when the biggest stimulus of all is hiding in plain sight. And that is ending our political paralysis and the pall of uncertainty it is casting over everything from the cost of my health care to the cost of my energy to the way our biggest banks can do business.
If the two parties could get together and remove the clouds of uncertainty over those issues, remove the growing sense that our country is politically paralyzed, you would not need another dime of stimulus money. Investment and lending would take off on their own. If, however, the two parties continue with their duel-to-the-death paralysis, no amount of stimulus will give us the sustained growth and employment we need