By historical standards, the current recovery from the recession that began in 2007 has been disappointing. This is part 3 of a three-part series with John Taylor of Stanford University's Hoover Institution and Department of Economics.
Taylor puts the recovery in historical perspective and explores possible explanations for why the recovery has been so mediocre.
In Part 1 of this discussion of the recovery, Taylor quantified how unusual this recovery is by historical standards. In Part 2, Taylor looked at a number of standard explanations for the sluggish recovery.
Here in part 3, Taylor argues that the slow pace of the recovery is due to poor policy decisions made by the Bush and Obama administrations that have increased the amount of uncertainty facing investors, consumers, and employers. Examples include the rising debt forecast, the fiscal cliff, expiring tax provisions, and quantitative easing. Taylor argues that the uncertainty surrounding these policies in the future along with increased regulation have held back the recovery.