Friday, March 23, 2012

Structural reform, not austerity or stimulus

A bit of sensible policy advice from John Cochrane:  Austerity or Stimulus? What We Need Is Growth
“Structural reform” is vital to restore growth now, not a vague idea for many years in the future when the stimulus has worked its magic. It’s also a lot harder politically than the breezy language suggests. “Reform” isn’t just “policy” handed down by technocrats like rules on the provenance of prosciutto; it involves taking away subsidies and interventions that entrenched interests have grown to love, and have supported politicians to protect. They will fight it tooth and nail.