It?s been a while since we?ve been compelled to tweak TIME?s ?Curious Capitalist? in this forum. Zachary Karabell gives us our latest opportunity.
In his column, Karabell pooh-poohs the notion that uncertainty about government policy is playing a key role in slowing economic growth.
Perhaps Mr. Karabell would benefit from reading Amity Shlaes? research into another period of economic uncertainty tied to an activist president trying to ?fix? the economy.
Kokai: You don?t paint [FDR] as a villain, but you do point to some of the things that he did that just built upon other mistakes. You get the sense in reading this book that if he had just stopped at some point and let his various ?reforms? stand, we would have been better off.
Shlaes: Politicians have their reasons, that they like reform for the sake of reform. But as we know here in the marketplace or when we are citizens that reform for the sake of reform is very costly in terms of uncertainty. If your child?s school is reformed six times from first grade to sixth grade, you know he doesn?t have a pleasant experience in that school and a lot of us know that, right? So we know No Child Left behind. We know stuff that changes sounds good, but change itself can be trouble.
And that was the New Deal. Roosevelt would do a reform. One day he loved big business. The next day he is suing them. Then he loves them again, breathing spell, then he is back at them. And even Keynes, the famous U.K. economist who was so important in that period, didn?t like it. He said to Roosevelt about utilities: either nationalize them or leave them alone. What?s the use of chasing them around the lot every other week? That?s the politician, and that?s what Roosevelt did. It?s the dark side of his famous phrase ?bold, persistent experimentation.? People don?t like bold, persistent experimentation too much because they can?t get their bearings, and that?s a little bit of what happened in the ?30s ? especially the latter half.
