You're a Mean One, Congress: How the Fiscal Cliff Stole Christmas


Well, it's looking like this may officially be the year that Congress stole Christmas. 

Reuters reports that, according to early data, the U.S. may have just experienced its weakest holiday shopping season since the woeful days of 2008, when the country was still dealing with, you know, a financial crisis and a recession. Holiday-related spending from late October through Christmas inched up 0.7 percent this year, down from last year's 2 percent growth, according to MasterCard Advisors SpendingPulse. Other sales trackers found similarly meager results.  

What happened? Weather was probably part of the problem. Superstorm Sandy smashed into the Atlantic in November, bringing business to a halt, and winter storms in December may have also depressed sales. 

But Santa, Rudolph, Dancer, and Prancer also appear to have collided head on with the fiscal cliff. Americans are watching the negotiations in Washington carefully, and after months of shrugging them off, recent surveys show the impasse in Congress appears to finally be taking a psychological toll on country, making everyone feel a bit nervous about opening their wallets. 

Overall consumer spending actually rose in November, despite that possibility that taxes would shoot up in the New Year if Congress couldn't strike a deal. But over the last month or so, Americans have become increasingly pessimistic about the possibility of an accord. In December, consumer confidence suddenly fell to a five-month low. And although correlation isn't causation, it's probably not a coincidence that it happened at the same time that the cliff negotiations seemed to stall. According to Gallup, only half of Americans now believe it is very or somewhat likely that we'll avoid the cliff, down from 58 percent at the start of the month. If they were putting off purchases early in the shopping season thanks to the threat of storms storms, it's possible that the threat of Washington made consumers decide to cut back once they finally hit stores. Avoiding_the_Fiscal_Cliff.png

The talks between Congress and the President certainly appear to be more than just a passing interest for the public. More than 60 percent of Gallup's survey takers said they were following the negotiations somewhat or very closely. That makes sense: this isn't a remote policy debate. People want to know if their take-home pay is going to shrink in the new year. 


For a while, it seemed that there was a split between businesses and ordinary consumers when it came to how they viewed cliff. Corporations, which tend to take the long view on the economy, have been pulling back on investment in things like software and machinery for months. But consumers have kept on spending, which has helped buoy growth. Now, if Christmas holiday spending is any indicator, it appears families have gotten nervous as well.

You're a mean one, Congress. Truly. 

Jump to comments
Presented by

Jordan Weissmann is a senior associate editor at The Atlantic.

Get Today's Top Stories in Your Inbox (preview)

What Do You See When You Look in the Mirror?

In a series of candid video interviews, women talk about self-image, self-judgment, and what it means to love their bodies

Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus


Adventures in Legal Weed

Colorado is now well into its first year as the first state to legalize recreational marijuana. How's it going? James Hamblin visits Aspen.


What Makes a Story Great?

The storytellers behind House of CardsandThis American Life reflect on the creative process.


Tracing Sriracha's Origin to Thailand

Ever wonder how the wildly popular hot sauce got its name? It all started in Si Racha.


Where Confiscated Wildlife Ends Up

A government facility outside of Denver houses more than a million products of the illegal wildlife trade, from tigers and bears to bald eagles.


Is Wine Healthy?

James Hamblin prepares to impress his date with knowledge about the health benefits of wine.


The World's Largest Balloon Festival

Nine days, more than 700 balloons, and a whole lot of hot air



More in Business

Just In