{"id":243136,"date":"2010-01-28T10:17:00","date_gmt":"2010-01-28T15:17:00","guid":{"rendered":"e2249889-c78b-43e3-9643-b1d7d4aa587b:387904"},"modified":"2010-01-28T10:17:00","modified_gmt":"2010-01-28T15:17:00","slug":"dysfunctional-political-system-expected-to-undermine-recovery","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/243136","title":{"rendered":"Dysfunctional political system expected to undermine recovery"},"content":{"rendered":"

\"\"<\/a><\/p>\n

If you had any doubts that the U.S. political system has grown increasingly dysfunctional, the last year and the last week of Barack Obama\u2019s presidency should serve as confirmation. Health care reform, climate change legislation and the stimulus measures to promote long-term growth have been disrupted by the polarized political system and special interest groups.<\/p>\n

\u201cThere is no other advanced democracy where the elected leader has so much difficultly in adopting his political and economic agenda, despite enjoying large majorities in both the Senate and the House of Representatives,\u201d said Pierre Fournier, geopolitical analyst at National Bank Financial. \u201cGoverning in the national interest in tough economic times is rarely easy, but it becomes unachievable when you are held hostage by permanent filibusters, two-year election cycles, powerful special interests, and populism.\u201d<\/p>\n

After the defeat in Massachusetts and with popularity heading downward, the analyst noted that President Obama and the Democrats are attempted to ensure their political survival by harnessing the populist backlash. The most recent target: large financial institutions.<\/p>\n

However, while excessive risk taking and the perceived greed of the U.S. banks may be viewed as the culprits behind the economic crisis, history will show that the declining competitive position of the United States and other developed economies is the most important underlying cause, Mr. Fournier suggested in a new report.<\/p>\n

So while the $90-billion \u201cresponsibility tax\u201d that large U.S. financial institutions are facing a over a decade may not be particularly meaningful for profits as a whole, it serves as an ominous sign for the future. President Obama and former Federal Reserve chairman Paul Volker\u2019s potentially sweeping overhaul<\/a> of the banking landscape will likely be watered down and implemented over several years, but that doesn\u2019t mean it won\u2019t do some damage.<\/p>\n

\u201cInevitably, the large banks will engage in various forms of \u2018self-censorship,\u2019 and their ability to project power and compete on the international scene will be reduced,\u201d Mr. Fournier said.<\/p>\n

Meanwhile, the Supreme Court recently decided<\/a> to lift the limits on political contributions of organized interest groups. This may serve the banks well in organizing a couter-attack, but this path is fraught with pitfalls and will require more astute political leadership from the bankers than they have shown recently, the analyst noted.<\/p>\n

\u201cThe populist backlash will not stop there. The President will find it difficult, if not impossible, to resist the protectionist forces in the country, including in his own party. He will also be under pressure to undercut the Republicans on the immigration issue, with negative consequences for the U.S. and world economy,\u201d Mr. Fournier added.<\/p>\n

So while economists that are forecasting robust economic growth and job creation<\/a> in the near-term may prove correct, and many of the structural deficiencies in the political system may be successfully plastered over for a while, the complex relationship between economic and geopolitical factors may continue to undermine the recovery. <\/p>\n

Jonathan Ratner<\/a> <\/p>\n

Photo: U.S. President Barack Obama arrives in the House chamber to deliver his first State of the Union address on Capitol Hill in Washington, January 27, 2010. (REUTERS\/Kevin Lamarque) <\/span><\/p>\n

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If you had any doubts that the U.S. political system has grown increasingly dysfunctional, the last year and the last week of Barack Obama\u2019s presidency should serve as confirmation. Health care reform, climate change legislation and the stimulus measures to promote long-term growth have been disrupted by the polarized political system and special interest groups. […]<\/p>\n","protected":false},"author":4059,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-243136","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/243136","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4059"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=243136"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/243136\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=243136"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=243136"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=243136"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}