[Editor’s Note: This article in the Wall Street Journal on September 25, 2013 provides interesting insight that perhaps ending the “fight” between the President and both houses of Congress is more important to adding jobs than who is right]
Policy uncertainty directly affects economic activity. Messrs. Baker, Bloom and Scott summarize their case: "When businesses are uncertain about taxes, health-care costs, and regulatory initiatives, they adopt a cautious stance. Because it is costly to make a hiring or investment mistake, many businesses naturally wait for calmer times to expand. If too many businesses wait to expand, the recovery never takes off." The evidence also suggests that policy uncertainty increasing affects the performance of the stock market.
What do you think?