"[With health care done] Democrats will turn unequivocally to the economy, putting forth additional efforts to accelerate the recovery." -- John Harwood, The New York Times, March 29
"Efforts" such as, um, well, hmmmmm …
Something anyway: a cycle of speeches from the White House; federal grants for job creation; exhortations to start hiring and spending in the expectation of a recovery that's just around the corner. Well, isn't it?!
The Democrats, who had to execute the political equivalent of Gettysburg to squeeze Obamacare through the narrowest of congressional apertures, know they have to boost the economy fast. The problem they -- and we -- face is, how? What can they do at this point, not least on account of their own economic preconceptions?
What a pity the late Milton Friedman isn't around to explain with characteristic snap and crackle that the great engine of economic progress is the expectation of profit. It would take all the snap and crackle at Friedman's disposal to make any impression on politicians who look suspiciously on anyone interested in economic gain. The 2008 elections put such politicians in control of the federal government. The likes of Nancy Pelosi and, apparently, Barack Obama don't get this whole profit thing, which they equate with greed. What's more, they seemingly don't care to get it.
If they truly got it, they would never have jacked up taxes and regulations under the pretext of health care reform. They would have known, with or without Dr. Friedman's help, that putting people to work means encouraging them to expect rewards for so doing -- bigger profits, for instance, on account of lowered tax rates.
With the jobless rate nearly in double digits, and unlikely to fall any time soon, the best way to encourage hiring, investment and economic expansion would be to cut taxes. Wait, though: How do we do that, with the Democrats having committed business and the obviously wicked "wealthy" to pay for expanded health care? Not to mention other big spending increases in the Obama budget?