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When Governing Means Lurching Between Phony Crises

Jan. 2 (Bloomberg) -- The vote last night in the House of Representatives brought to a close the latest Washington master class in dereliction of duty. After a few days of arguing about who won or lost, we can move on to the next manufactured crisis.

In itself, not much of a surprise, the fiscal-cliff deal avoids most of the tax increases and postpones almost all of the spending cuts that were about to be triggered. Throughout this farce, financial markets had refused to believe that the U.S. government would inflict a recession rather than strike a budget agreement, especially because they knew that, all posturing aside, the distance between the two parties was small. Markets wobbled but didn’t collapse.