Morgan Stanley economist Vincent Reinhart is out with a new note downgrading the US economy thanks to mediocre data and various other headwinds, some of which are political.
The note includes this intriguing chart on political polarization in Congress.
Photo: Morgan Stanley
We’re not 100% certain how it’s calculated, but our guess is that it basically just measures the proclivity of Repubicans and Democrats to vote against each other, and along party lines. So if Republicans and Democrats were never on the same side of a vote in the House, it would be at 1.0.
Two things stand out. One is that yes, political polarization is incredibly high. In the House its at all-time highs. That being said, it’s been really high for a while now based on historical standards.
The only time it was extraordinarily low was in WWII and the immediate subsequent years.
One of Vincent Reinhart’s points is that as you look ahead to the fiscal cliff, long-term deficit, and debte ceiling fights, this nosebleed level of political polarization is a reason to be less than optimistic.
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