Baum on Money: Closed!
Good morning, all. And welcome to Day 1 of the U.S. federal government shutdown. Here are some stories on the impact, both nationally and globally, and what to expect.
No one budged; no one's even talking
The midnight deadline came and went without any compromise to keep the federal government open. Neither side offered concessions. The parties continued to talk -- not to one another, but via accusatory remarks to the public about the other side's intransigence. So the government began its first partial shutdown -- essential services will be maintained -- in 17 years. The cost? At least $300 million a day in lost economic output, according to IHS Inc. The bigger cost, at least initially, is psychological (see below).
How is it playing in Peoria?
Not well, according to a Washington Post-ABC News poll. Only one in four (26 percent) Americans approve of the way congressional Republicans are handling the budget negotiations. Congressional Democrats (34 percent) and President Barack Obama (41 percent) get higher scores. And 27 percent disapprove of all three. Another poll, from Quinnipiac University, found that 72 percent of Americans opposed shutting the government to prevent parts of the Affordable Care Act from going into effect. And 64 percent oppose holding the debt limit hostage to the healthcare law -- even though Americans are split (45 percent to 47 percent) on the law itself.
How will it play on the world stage?
Global equity markets slid on Monday as the prospect of an Oct. 1 U.S. government shutdown looked increasingly likely. But the real damage isn't any temporary material loss. Of greater concern are the "doubts about American credibility and reliability now being sown, regardless of the outcome of the current comic opera," writes the Wall Street Journal's Gerald Seib. U.S. allies, such as Israel, and wannabe nuclear powers, like Iran, may be recalculating their next moves. If the U.S. president and Congress can't agree to keep the government running, what does that mean for building an international coalition for action if and when it's needed?
Wall Street to the rescue?
Bloomberg News reports that the chief executives of several big banks will meet with Obama and Treasury Secretary Jack Lew today "to discuss the White House's negotiations with Congress over funding the government and raising the U.S. debt ceiling." That should help! If members of Congress can't talk to one another, and the president and Congress aren't willing to negotiate, what exactly will a bunch of -- remember what Obama call them? --"fat-cat bankers" do to solve the problem? It will make for a nice photo-op, especially at a time when the Justice Department is trying to milk JPMorgan Chase for billions.
A pox on all their houses
What to do with 535 recalcitrant lawmakers who refuse to talk to their colleagues across the aisle and shrink from doing the people's business? Washington Post columnist Petula Dvorak used social media to solicit ideas. Start by suspending their paychecks. Then make them enroll in Obamacare, put them in a playpen or send them to jail for the night. Get rid of all the perks, such as free parking at Reagan National Airport. And, in the final coup de grace, "take away the fuel for their ambitions, egos and grandstanding," Dvorak writes. In other words, take CSPAN off the air.
Here's a handy-dandy guide to the shutdown, courtesy of the Washington Post
Still unanswered -- and probably more important to those reading this is -- is the question of Friday's jobs report. The Labor Department hasn't said yet whether it will release the report. It has the data already. Weekly jobless claims, which are processed by the states, will be released on schedule.
(Caroline Baum is a Bloomberg View columnist. Follow her on Twitter.)