It’s Official: Partisan Rancor Worst in Over a Century

Just in time for U.S. mid-term elections, there’s a new measure of the partisan rancor in Washington.

The Philadelphia Federal Reserve Bank yesterday inaugurated a monthly index of political discord, putting a number to what most Americans already know: their government has been unusually fractious during the past several years.

The index does bring one surprising bit of news: Partisan conflict has been easing since May and is down 54 percent from a record level a year ago, when a deadlock between Republicans and Democrats shut down the U.S. government.

Battles in Washington are being tracked because they may themselves be one cause of the country’s slow recovery from the 2008 financial crash, according to the index’s developer, Marina Azzimonti, a former Philadelphia Fed economist who’s now an associate professor at Stony Brook University in New York.

“The uncertainty in Washington may cause people to freeze and not invest,” Azzimonti said in a phone interview. “In the last few years, the U.S. has experienced the highest levels of political disagreement in more than a century.”

The index is based on the frequency of newspaper reports describing disagreement among federal officials. Azzimonti found that increases in partisan disagreement captured by the index historically tend to be associated with persistent reductions in business investment, economic output and employment.

Azzimonti theorized in a paper published in June that news coverage of partisan conflict stirs uncertainty among businesses and consumers, who respond by curtailing investments and purchases.

2013 Record

The Partisan Conflict Index’s reading during last year’s government shutdown exceeded any prior level of the measure, which stretches back to 1891. That includes such tumultuous periods of U.S. history as President Franklin Roosevelt’s New Deal, the civil-rights and Vietnam War protests of the 1960s, and the Republican attempt to convict Democratic President Bill Clinton on impeachment charges in 1999.

The index shows a decline in partisan conflict from 1891 through the early 1920s, then a relatively stable period until 1965 and an upward trajectory since. Azzimonti said in her paper that recent increases in the conflict index tracked with the 1965 passage of civil-rights legislation and rising income inequality.

The index hit peaks of 170 in July 2011 during the stand-off over raising the U.S. debt limit and 252 in October 2013 during the budget deadlock that led to a partial shutdown of the government. The most recent reading, for September, is 115, with 100 representing the average reading during 1990.

Newspaper Articles

The recent partisan battles have played out in periods of uncertainty about key economic events, including a potential default of U.S. government debt and income tax rates following the expiration of tax cuts passed under President George W. Bush.

The measure is based on the number of articles in major newspapers describing disagreement or conflict between political parties, branches of government, candidates for office or office-holders, according to Azzimonti’s paper. The index is scaled based on the total number of articles available from the newspapers on digital databases for the same period.

The index, which the Philadelphia Fed will issue monthly, is available monthly going back to January 1981 and annually going back to 1891.

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