The Ottumwa Courier

AP National

October 18, 2013

For US, shutdown embarrasses but damage won't last

(Continued)

"We may have dodged a bullet again, but we think these episodes cumulate," says Robert DiClemente, chief U.S. economist at Citigroup. There's a "risk that at some point investors throw up their hands and say, 'This has gone too far.'"

Outside the United States, "people are somewhat incredulous about it," says Martin Sorrell, CEO of advertising giant WPP. "Going to the edge of a precipice doesn't make much sense. If you ran a company this way, you'd be out of a job."

In Mumbai, Gayatri Bedi, owner of a photography studio, says it was irresponsible for the world's biggest economy to come so close to a default when the rest of the world depends on U.S. stability.

"In India, we don't have a lot of respect for politicians because of corruption and incompetence," she says. "It seems the U.S. politicians are becoming more like Indian ones."

The research firm IHS Global Insight has lowered its forecast for U.S. economic growth in the October-December quarter to a glacial 1.6 percent annual rate from 2.2 percent.

The crisis also distracted U.S. policymakers. Obama, who has been trying to focus U.S. foreign policy on China's rising economic might and other issues in Asia, was forced to skip a regional economic summit in Indonesia.

Congress has yet to make progress on issues important to businesses: immigration reform, an overhaul of corporate tax rates, a long-term deal to shrink budget debts.

"The drama sucks the oxygen from the room," says Nancy McLernon, president of the Organization for International Investment, which represents foreign companies doing business in America.

Still, McLernon says the political dysfunction hasn't made America any less of an attractive market for foreign companies. When she attended a meeting in Britain early this month, most of the British executives there dismissed the standoff as political theater.

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