Thursday, October 6, 2011

Policy uncertainty and jobs

"Policy uncertainty" has dramatically increased since the September 2008 crash. (via)

That article (written by 3 economists at Stanford and University of Chicago) notes that it's hard to disentangle uncertainty about policy (tax rates, health-care law, regulations) from uncertainty about the economy as a whole. But the authors tried to isolate policy uncertainty as a distinct factor inhibiting businesses from hiring people.

They "estimate that restoring 2006 levels of policy uncertainty would yield an additional 2.5 million jobs over 18 months."

UPDATE: My mom, Ann Althouse, remarks: "And yet the government is always scrambling to help us out with new policies." She quotes President Obama from today:

“If Congress does nothing, then it’s not a matter of me running against them. I think the American people will run them out of town. I would love nothing more than to see Congress act so aggressively that I can’t campaign against them as a do-nothing Congress.”
She urges us to "[r]econsider the amazing value of nothing."