Markets Are Up Because Of The Shutdown, Not Despite It

A blog about business and economics.
Oct. 1 2013 9:06 PM

Markets Are Up Because The Shutdown Is Good News On The Debt Ceiling

NEW YORK, NY - OCTOBER 01: Traders work on the floor of the New York Stock Exchange on October 1, 2013 in New York City.

Photo by Spencer Platt/Getty Images

I've had a couple of people ask me this afternoon and evening why I think the stock market is up despite the government shutdown. I would say the stock market is up because of the government shutdown. From the getgo I've said that taking the lurking element of obstinacy in the House GOP caucus as a given, a government shutdown is a good sign for the economy.

The practical alternative to a shutdown, you should recall, was a short-term (i.e., one or two months) continuing resolution that would have set up a fight over the debt ceiling.


The shutdown by no means makes a debt ceiling breach impossible. But it does make it less likely. It makes it less likely because it's teaching Republicans that a strategy of trying to make the American people suffer in order to force Democrats to make concessions on health care policy doesn't work very well. It's actually a bit nutty. So nutty that the 30 or 50 or 75 or 100 most conservative House members can't hold to it? Of course not! But probably too nutty for the 20-50 House members from the least conservative districts to hold to. Cleaving those 20-50 members from the rest of the party is the key to avoiding a debt ceiling disaster, and the shutdown is producing an object lesson in the need to cleave.

Should what we saw today make us complacent about the debt ceiling? No. But if today's events had been avoided with a last-minute short-term continuing resolution we'd be in even worse shape.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.


Medical Examiner

The Most Terrifying Thing About Ebola 

The disease threatens humanity by preying on humanity.

I Bought the Huge iPhone. I’m Already Thinking of Returning It.

Scotland Is Just the Beginning. Expect More Political Earthquakes in Europe.

Students Aren’t Going to College Football Games as Much Anymore

And schools are getting worried.

160 Countries Host Marches to Demand Action on Climate Change


Blacks Don’t Have a Corporal Punishment Problem

Americans do. But when blacks exhibit the same behaviors as others, it becomes part of a greater black pathology. 

Why a Sketch of Chelsea Manning Is Stirring Up Controversy

How Worried Should Poland, the Baltic States, and Georgia Be About a Russian Invasion?

Trending News Channel
Sept. 19 2014 1:11 PM Watch Flashes of Lightning Created in a Lab  
  News & Politics
Sept. 20 2014 11:13 AM -30-
Business Insider
Sept. 20 2014 6:30 AM The Man Making Bill Gates Richer
Sept. 20 2014 7:27 AM How Do Plants Grow Aboard the International Space Station?
  Double X
The XX Factor
Sept. 19 2014 4:58 PM Steubenville Gets the Lifetime Treatment (And a Cheerleader Erupts Into Flames)
  Slate Plus
Tv Club
Sept. 21 2014 1:15 PM The Slate Doctor Who Podcast: Episode 5  A spoiler-filled discussion of "Time Heist."
Brow Beat
Sept. 21 2014 2:00 PM Colin Farrell Will Star in True Detective’s Second Season
Future Tense
Sept. 19 2014 6:31 PM The One Big Problem With the Enormous New iPhone
  Health & Science
Bad Astronomy
Sept. 21 2014 8:00 AM An Astronaut’s Guided Video Tour of Earth
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.