Decision 2016: Economy

Her fiscal plan gives targeted benefits to her favorites—but it won’t grow the economy.

Like many economists, I hadn’t paid enough attention to the financial sector and how it can affect the rest of the economy. When the tech sector struggled from 1999 to 2001, it was tough on some tech companies but it didn’t threaten to create another Great Depression. The troubles in the financial sector were much more dangerous.

On the way back from Washington, I passed the time reformatting my little essay for the Budget committee to html for blog readers.

Election year politics generates much rhetoric and confusion. And the media often adds its spin. But, fortunately, there are some books around that deal with reality and can cut through the nonsense. 

I was invited to testify at a hearing of the House budget committee on Sept 14. It's nothing novel or revolutionary, but a chance to put my thoughts together on how to get growth going again, and policy approaches that get past the usual partisan squabbling.

Despite what progressives say, higher taxes and tighter regulations lead to stagnation, not growth.

Mark Twain famously said that there were three kinds of lies — "lies, damned lies, and statistics." Since this is an election year, we can expect to hear plenty of all three kinds.

The cause of sclerotic growth is the major economic policy question of our time. The three big explanations are 1) We ran out of ideas (Gordon); 2) Deficient "demand," remediable by more fiscal stimulus (Summers, say) 3); Death by a thousand cuts of cronyist regulation and legal economic interference.

“The tenor of much recent coverage is that the federal debt is a fading problem, even though by any objective measure it is a serious one in the process of getting rapidly worse.”

“With an election like this one, it is probably more useful to explain the most destructive policies. Here are our top five.”

Incomes rise or fall together—what moves them is economic growth. Why we’re all in this together.

We really could transform our nightmarish tax system. Here’s how.

Over the last 35 years, Western democracies have seen a rapid rise in political instability, characterized by frequent shifts in governing parties and their programs and philosophies, driven at least partly by economic transformation and hardship.

Decrying the “income gap” may make for stirring political rhetoric, but we don’t need rhetoric. We need growth.

Make a clean sweep in taxes, regulation, and investment, and the economy will leave stagnation in the dust.

They’ve been too wrong for far too long.

“If human beings have their own responses to government policies, then we cannot blithely assume that government policies will have the effect intended.”