by Jerry O’Driscoll
Today’s Wall Street Journal features a major op ed, “Principles for Economic Revival,” co-authored by George P. Schultz, Michael J. Boskin, John F. Cogan, Allan H. Meltzer and John B. Taylor. It begins by noting that the “deep recession and anemic recovery have largely been driven by economic policies that have deviated from proven fact-based principles.”
As the piece’s title suggests, the authors advocate a return to policies for the long-run based on sound economic theory. However much one may disagree with particulars, the emphasis on the long run must be applauded. As they put it, “long-lasting economic policies based on a long-term strategy work; temporary policies don’t.”
The piece is very long, easily the size of two normal opinion pieces. They cover a great deal of ground: bailouts, stimulus, health care, housing monetary policy, etc. It’s well-worth reading and should frame the policy debates going forward.
Let us once and for all be done with endless discussions of temporary policies with transient effects. They don’t work and they distract us from the business at hand. Low marginal tax rates, transparent and not burdensome law and regulation, and non-inflationary monetary policy promote economic growth. The opposite leads to recession and anemic recovery.