Analysis | No, ‘Obamasclerosis’ wasn't a real problem for the economy wapo.st/2F0DfFv?tid=ss…
.@WSJ @greg_ip reviewing @realDonaldTrump Admin's first @WhiteHouseCEA report finds credible its claims that @BarackObama policies materially slowed economic growth, even though Ip acknowledges CEA’s assertions regarding magnitudes are likely exaggerated.
The @WhiteHouseCEA thesis is that a wave of tax and regulatory policies reduced both workers' incentives to work and businesses' incentives to invest, leading to slower economic growth than would otherwise have been achievable.
I am sympathetic to arguments of this type, having often observed that “business confidence is the cheapest form of stimulus.”
Much of what the @BarackObama Administration proposed (more infrastructure spending and responsible tax reform) would have triggered even greater economic growth but never came to pass, largely due to congressional roadblocks
At least three broad features of the economic landscape make the @WhiteHouseCEA view an unlikely explanation for disappointing economic growth. 1/4
The dominant reason for slow growth has been what economists label slow “total factor productivity” (TFP) growth. 2/4
Perhaps the biggest surprise of the last few years has been the remarkably low rate of inflation even as the unemployment rate has reached 4 percent. 3/4
The essential idea behind the @WhiteHouseCEA thesis is that capital has been greatly burdened in recent years by onerous regulation, high taxes and a lack of availability of labor. This idea is belied by the behavior of the stock market and of corporate profits. 4/4
Over the course of @BarackObama's second term, corporate profits increased by nearly 20 percent, and the S&P 500 grew by more than 50 percent. This hardly suggests a period of excessively increasing burdens on capital.
