Policy Uncertainty May Drive Bad Economic Numbers

If you keep people guessing, they're unlikely to take risks


Yesterday, the Institute for Supply Management reported that U.S. manufacturing fell to a three-year low. That's disappointing news during what, we're told, is a "recovery" from the Great Recession. Why manufacturing is shrinking again after a brief period of growth requires a bit of speculation, but comments gathered by the ISM point not just to worries over the fiscal cliff but anticipated policy choices by the federal government that have business people hunkering down for the worst.