Tuesday, November 1, 2011

The long and the short of it

Richard Epstein on the shortsightedness of Keynesianism.  He criticizes those who think we should worry about long-term growth only once we overcome our short run difficulties. 
The only way to fix the short-term unemployment problem is by fixing the long-term issues that have fallen into treacherous disrepair over the past decade. Several long-term issues that must be fixed include, for starters, minimum wage legislation, unionization, and employer health-care mandates. Then, once we get an improved business environment, investors and employers will come off the sidelines and start investing and hiring. But without that change, prudent investors will shy away from productive ventures, preferring to hoard their money in treasury bills. The longer we wait to implement these overdue reforms, the more delayed the recovery will be. Here are four reasons why the left’s two-part strategy of stimulus now, and (maybe) reform later is doomed to fail.