We can’t do anything about the White House for another two years, but I’ll bet that a Speaker of the House other than Nancy Pelosi would be a huge shot in the arm for business confidence.
[Update a while later]
The Lady Gaga economy:
Right now, there’s lots of demand for Lady Gaga, say; but maybe too many houses, cars for sale, and hokey Internet startups.
Economic recovery requires massive spending cuts, deregulation, privatization, tax-cutting, avoidance of monetary inflation, and elimination of government-granted monopolies and favors. But, more importantly, economic recovery requires allowing prices and wages to adjust to market clearing levels. Politicians don’t allow that, so downturn is deliberate policy in a sense. Politicians instead stimulate demand in random, whim-driven ways that create new distortions that harm us later (when they’re out of office, or their earlier misdeeds are forgotten or forgiven).
Such policy prescriptions foster political ends that have little to do with actual economic recovery. Recession is already inevitable if government does not perform its core function of preventing the interest group manipulation that distorts smooth economic enterprise. It’s doubly so when politicians deliberately distort the economy’s workings.
Beyond performing its “classical” functions of maintaining order and thwarting contrived scarcity, government can only serve as a transfer mechanism. Inherently limited in what it can contribute to the real economy, it can certainly subtract a lot.
And it certainly has.
[Update a while later]
The Money Honey weighs in:
You are seeing businesses follow the growth outside of the United States. But absolutely – that is the positive. The reason that they’re not hiring right now is because there is a tremendous amount of uncertainty. And that has everything to do with the policies coming out of this administration. Higher taxes in 2011, higher expenses as a result of health care costs. That’s why they’re not hiring.”
Well, duh.