no avatar

Recession threat shows folly of shutdown

The San Diego Union-Tribune • Jan 19, 2019 at 5:30 AM

The federal government shutdown is taking a steadily increasing toll on the quality of life in America. Trash is strewn across national parks. Lines are growing at airports as unpaid Transportation Security Agency officers choose to stay home. Some 800,000 government workers have to rely on their savings and credit cards to pay for the basics of life.

None of this seems to matter much to the Republican lawmakers who won't work with congressional Democrats to fund the government. That's even though most have made plain with their past inaction that they don't agree with President Donald Trump when he says a shutdown is a small price to pay if it results in $5.7 billion for a wall along parts of the southern border. What should matter to GOP legislators are the increasingly strong signs that the shutdown is hurting the economy.

With no end in sight, U.S. companies are increasingly frustrated with their inability to gain approvals for imports, contract renewals and purchases. Executives say the uncertainty fueled by the showdown is forcing them to delay investment decisions.

One troubling report came from the White House itself. Kevin Hassett, chair of the president's Council of Economic Advisers, said the shutdown was having twice the negative effect of initial projections and that the U.S. has already reduced quarterly economic growth nearly 0.5 percent. Michael Corbat, chief executive of Citigroup, fears government leaders are "talking ourselves into a recession."

Has this registered with Trump? His greatest political strength has been the booming economy and a labor market so tight that U.S. workers recently have enjoyed their fastest wage growth in a decade. There were already reasons to worry that the global economy was slowing because of the U.S.-China trade fight. Now recent stories have noted that while some in Trump's orbit believed he was nervous about the economy and fretting about the negative coverage he was getting over the showdown, others close to the president were encouraging him to stay the course, believing he had leverage.

That's not how it looks from 3,000 miles away. If Trump loses in a landslide in November 2020 because of an economic downturn triggered by his intransigence, that would be rich with irony. But it would also be accompanied by a lot of human misery. Here's hoping rationality soon prevails at 1600 Pennsylvania Ave.

(c)2019 The San Diego Union-Tribune

Recommended for You

    Johnson City Press Videos