CREDIT: ERIN SCOTT – REUTERS / STOCK.ADOBE.COM
The headlines in recent days make clear that the turmoil gripping Washington is having an effect on the markets. “A plot to oust the House speaker hits weary investors,” the New York Times reported. “McCarthy’s ouster could hurt the US economy,” CNN warned. “Shutdown fears loom over Wall Street after McCarthy ousted,” The Hill said.
For years, there’s been an adage that “Wall Street likes gridlock” in Washington. But there have always been problems with that idea as well. As the Wall Street Journal once reported, “Contrary to popular belief, gridlock often hurts stocks.” And while some people believe political division helps keep the government out of businesses’ way, Gautam Mukunda, research fellow at the Harvard Kennedy School’s Center for Public Leadership, has called that idea “profoundly, disastrously mistaken.”
Either way, the current situation in Washington has gone far beyond just “gridlock.” The removal of Rep. Kevin McCarthy as House speaker is historic, and a sign of dysfunction.
Americans have seen this dysfunction for far too long. And they’re fed up. More people than ever now support the idea of a third major political party. Sixty-three percent of American adults agree that the two major parties do “such a poor job” of representing the American people that a “third major party is needed,” Gallup reports. Republicans are “primarily behind the increase,” with 58% “endorsing a third U.S. political party.”
I’m a part of this movement. Having previously been a Republican in my home state of Texas, I’ve come to see that it’s no longer the home for me, and many others like me. When I tell people this, many assume that I therefore must be aligning myself with the Democratic Party. It’s a strong sign that people believe there are only two options.
Joining the Forward Party
In my home state of Texas, I ran last year for a position on the Railroad Commission, which has nothing to do with railroads and is responsible for regulating oil and gas in the state. As a lawyer with energy experience, a small business owner, a mom, and a resident of the Permian Basin, I see the impact that the government can have on families and businesses. I also see how government failure and corruption hurts everyone, even endangering our drinking water.
I’ve seen that entrenched thinking about the two-party system can prevent people from holding leaders accountable for failures and even corruption. And many people give up on voting entirely because they think it will make no difference. All of this breeds distrust, resentment, and even hatred. When people aren’t working together, they’re not developing solutions to big problems. And all of society pays a price — including in the economy.
We see this in the markets. With all the upheaval in Washington, investors are left in a wildly unpredictable environment. Even though a government shutdown would be unlikely to have a huge, lasting effect on the markets, it would contribute to all sorts of problems — especially since investors look to vital economic data from the federal government that could be delayed for days or even weeks. Some analysts believe a shutdown this time would have a worse effect than in previous shutdowns, with Wells Fargo warning that it could leave “stocks more exposed to volatility and to extended weakness.”
Even before the latest events in Congress, the division in the U.S. government has long been limiting growth and damaging the economy. Mukunda noted that it reduces investments in crucial things like infrastructure and technological advancement. So perhaps it’s little surprise that in the past, most investors surveyed have said political discord in Washington hurts the U.S. investment climate “a lot.”
There’s no reason to believe that the big political divide in America will be healed by the two major parties. To make this happen — to tackle all sorts of problems, including those hurting the markets — we need to change the system fundamentally. That’s why I’ve launched a campaign to enter next year’s race for the Texas Railroad Commission as a candidate with the Forward Party, which is committed to working “for the people, not the extremists.”
Even getting on the ballot will take a tremendous effort. But it’s time. U.S. investors, like people in all walks of life across the country, deserve an end to the gridlock, deadlock, and government paralysis that we’ve seen far too often. Greater economic strength lies ahead if we can move past this. It’s time to move forward together.
–Sarah Stogner is an energy expert, attorney, entrepreneur and candidate for the Texas Railroad Commission, with the Texas Forward Party. Follow her on Twitter @sarah4rrc and TikTok @theunicornlawyer.