Finance Column » Your Money This Week » Snowquester snow job

Snowquester snow job

By Mark Hamrick ·
Tuesday, March 5, 2013
Posted 3 pm ET

As this is written, Washington, D.C., is preparing for what is being described as the first major snowstorm of the season. The area immediately around the nation's capital appears to be in line for less than a foot of snow, with more in the mountains. Prepare yourself for a jarring transition. Coming just days after sequester, the imposition of $85 billion in budget cuts, some folks around D.C. have labeled the storm, the "Snowquester." The idea appears to be having a bit of fun with the storm, given that more serious blasts of winter in the past were given names like "Snowmageddon" and "Snowpocalypse."

A few folks reacted in snarky fashion to the appearance of the "Snowquester" label, perhaps still upset because The Weather Channel jumped in and named storms without asking anybody. Who knows? But after listening to Alan Krueger, the head of President Barack Obama's Council of Economic Advisers, talk about the ill effects of the mandatory budget cuts, I began to think that maybe the two endeavors -- forecasting weather and forecasting economic impacts of Washington decision-making -- actually should belong in the same place.

Where's the line, exactly?

Perhaps in part because of Washington's unique location, east of the mountains and west of the ocean and the Chesapeake Bay, weather forecasters seem to have a devil of a time getting it right around here. We're constantly reminded about the "rain/snow" line and how it might move just a little bit, making any snow forecast useless. It is a kind of universal D.C. weather forecaster disclaimer.

Similarly, we were told before the sequester was imposed about the catastrophic impact the cuts would have on all of us and the economy. I wrote just a week ago how the president used the words "immediate, painful, arbitrary" and even employed the dreaded "meat-cleaver approach."

Or maybe not. Plenty of recent measures of the economy are looking pretty good. One of the most recent is from the Institute for Supply Management covering the service sector, or the white-collar part of the economy. This February snapshot came in stronger than expected, seemingly undaunted by elected leaders' inability to come to agreement on most fiscal issues. A number of economists are predicting an acceleration of growth between now and the end of the year. A note from Paul Edelstein, director of financial economics for IHS Global Insight, put it this way: "We continue to expect economic growth to accelerate this year, even in the face of the sequester, setting the stage for sizable declines in unemployment in 2014." If true, doesn't sound like a situation where we need to buy canned goods.

So right about now, you can bet that toilet paper and bread are flying off the shelves of Washington-area grocery stores. That is the typical reaction to a forecast calling for snow.

The players and the game

Back to the economy, Krueger told a group of economists meeting in Washington, "political gamesmanship in Washington is creating uncertainty and inflicting unnecessary wounds on our economy, just as the recovery is gaining traction." Politicians often like to accuse their colleagues in their rival party of "playing politics" even though they are actually employed as professional politicians.

Will the sequester really hurt the economy as the year goes on? Will Washington fall on the wet and not-so-snowy side of the "rain/snow" line? Those of us who've watched politics and Washington weather over the years have come to learn to listen to the forecasts, but to wait to see how things really turn out.

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