Sunday, May 22, 2016

Policy uncertainty blob

Many economists (here, for example) are baffled by the Obama administration's new overtime pay regulations. I am baffled that they are baffled. The political campaign to date has shown pretty clearly that the electorate is ignorant of basic economic common sense. The thinnest rhetoric that it's all about "helping people" works. Anything that can be promoted as "helping" anyone, who can without any serious effort be shown to be a victim of something or other, can be sold as a winning policy proposal -- to just enough of the electorate (and media).

Any bargain that I choose to strike with anyone is between me and the other party. If no force or fraud is involved, it's on my shoulders. If I agree to the deal it is because I have decided (as only I can) that it's my best option under the circumstances. (David Henderson lays it out.) I can always dream of better options but that's irrelevant. So Secretary of Labor Tom Perez can go on the PBS News Hour and explain it all as common sense "helping people" -- along with a finger-wagging Joe Biden to back it all up with a stern "mark my words". Case closed.

The blob is growing fast and hard to assess. Last Friday, Holman Jenkins cited the latest: "The Competitive Enterprise Institute finds that, last year, Congress passed a mere 114 laws and federal agencies issued a whopping 3,410 regulations. At 80,260 pages, last year’s Federal Register was the third fattest in history."

Slow recovery? That has absolutely nothing to do with it. It's actually all about "secular stagnation." So bring on more regs and rules that can be sold as "helping people". Just don't think about the policy uncertainty.