Why US policy uncertainty has risen?

"Why has US policy uncertainty rise since 1960?" is a nice short paper in the May 2014 American Economic Review by Baker, Bloom, Canes-Wrone, Davis, and Rodden. They offer two simple stories for the policy uncertainty rise. 

One, the scale of government activity has increased so there has been a corresponding increase in uncertainty of what these policies will be. Governemnt has gotten more complex and has a greater impact on business decisions. The index of uncertainty is a function of the number of stories about policy uncertainty relative to all stories, so if government becomes a bigger part of the economy there is likely to be more stories about what policies may do to the economy. 

Second, if there is more political polarization, there is more likely policy uncertainty because there will be a greater chance there can be a large fluctuation in policy.  If we move between policy extremes, there will be more policy uncertainty of which extreme we will move to. This will also be the case if there a close divide between one extreme and another. Not mentioned in the paper is the clear fact that most presidential elections are determined by just a few percentage points and Congress can switch and be at odds with the executive branch. This all creates more uncertainty for a growing part of the economy. 

There is nothing we can do about this uncertainty. It is something we may have to live with, election "seasonality".