“No man’s life, liberty, or property are safe while the legislature is in session.” — Judge Gideon J. Tucker
In general, the federal government is at its level best when the Capitol building is emptied of legislators. The bills they have passed into law over the last 20 years seem to have done little to grease the wheels of economic growth, instead it appears that while the legislature is in session, doubt and uncertainty cast a pall over the markets. The Wall Street Journal‘s Stephen Moore reports:
The presumption in Washington is that when Congress passes fewer laws it’s a bad thing. This is a view traditionally held by those who want more edicts, more regulations, and more spending. But is an active Congress necessarily good for the economy?
“Washington is less of a threat now to business, and that’s a good thing,” says Wall Street economist David Malpass. This is the predominant view from Wall Street and business groups: the less Washington does now, the better. That’s especially true after four years of the U.S. economy getting whacked repeatedly with a litany of anti-growth laws and red tape that reduced profits and added to business uncertainty. ObamaCare and this year’s giant tax increase are Exhibits A and B.
The Congressional Effect investment fund has found that “over the long term,”—i.e., the last 50 years—the stock market does worse when Congress is in session. This year has been a major exception given the big bull market run of recent months, but maybe that’s because, well, Congress didn’t do anything.