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U.S. Politics Took the World to Edge of Armageddon: Martin Wolf

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America's confidence in Congress has been less than stellar this year, and this month is no different. Approval of our elected officials again matched the all-time low of 13% in October, Gallup reports.

Since June, approval of Congress has been below 20%. This month's low tied the worst levels recorded in December 2010 and August 2011 -- the latter month being when the U.S. lost its triple-A rating from Standard & Poor's in the wake of the debt ceiling debacle.

Martin Wolf, the Financial Times' chief economic commentator, isn't surprised by this lack of confidence, but he is worried. "We thought we were potentially on the edge of Armageddon," he says in reference to the political infighting over the country's debt burden. "That was terrifying, and it made one realize in a very clear way that the American political system has become something that we do not recognize from the past."

This observation has been increasingly evident since the Tea Party swept into the House of Representatives during the 2010 midterm elections. Partisan politics have reached extraordinary heights, and Congress has engaged in a lot more back and forth than actual legislating.

One could argue that this week is somewhat different. Unfortunately, it wouldn't be to say our elected officials have actually been all that productive. In the accompany interview, Wolf, who resides in the U.K., gives The Daily Ticker's Aaron Task his outsider perspective on the current state of U.S. politics.

Congress Approves FTAs: But Does It Matter?

In a bipartisan show of support Wednesday, the House and Senate finally passed three long-awaited free trade agreements with Colombia, Panama and South Korea. These FTAs have been awaiting approval for more than four years. (See: Free Trade Agreements Good for Jobs: U.S. Commerce Secretary Says World "Hungry" for Goods Made in U.S.A.)

"With passage in the House and Senate today, a key component of the Republican jobs plan will be sent to the President for his signature," said House Speak John Boehner (R-Ohio). "These significant trade pacts will provide new opportunities for American small businesses, farmers and manufacturers to expand and hire more workers."

However, nobody who has really examined the deals actually argues the initiatives "will make any significant difference," says Wolf. Despite being in favor of the pacts, Wolf considers the votes to be nothing more than "gesture politics."

Senate Currency and Jobs Bills D.O.A

Speaking of job creation, the Senate on Tuesday voted to kill Obama's $447 billion jobs bill, as it was widely expected to do. The bill needed 60 votes to move forward for full consideration, but fell short in a 50-49 vote. Wolf supports Obama's plan, but says it was too little and too late.

The Senate did manage to agree, however, to pass a bill that slaps trade sanctions on countries with undervalued currencies, namely China. But the legislation isn't expected to get anywhere in the House. Boehner calls the bill "dangerous" and has vowed not to touch it.

Wolf is sympathetic to the damaging effects of China's currency on the rest of the world, but does believe such a law would lead to an "economic war" between the two countries.

"It would be utterly wrong to think this is the principle reason that the U.S. or the rest of the Western economies are in the difficulties they are. It looks like scapegoating," he says. "It seems to be a very low priority and potentially dangerous policy even if you agree with some of the analysis."

Tell us what you think. If Congress can get its act together, do you think a recession can be avoided? To hear Wolf respond to that question, watch the rest of the interview on our Facebook page.

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