Michael Barone says that most conventional economists don't provide satisfying answers as to why our economy remains sluggish.
So he turns to an unconventional economist, Arnold Kling. Kling's new book "Specialization and Trade: A Re-Introduction to Economics" is, writes Barone . . .
. . . among other things, a polemic against macroeconomists who treat the economy as what Kling calls a "GDP factory" and who think policymakers can get it producing more by just stepping a little harder on the gas pedal, with federal stimulus spending or low interest rates.
As you may have noticed, that hasn't been working very well.
Kling, according to Barone, sees the economy as constantly changing, destroying and creating about four million jobs a month. If the number of jobs lost exceeds those created over a period of time, there is a recession. If the number of new jobs only narrowly tops the number lost, you have the kind of economy we have had for the last nine years.
We are seeing a steep decline in the "animal spirits" John Maynard Keynes said were essential to entering into new ventures and thus creating new jobs. We should not be surprised:
Reasons are not hard to see. Higher federal tax rates have hurt, and high-tax states have seen businesses flee to low-tax places like Texas. Taking money away from existing enterprises and potential entrepreneurs to pay for skyrocketing pensions for retired public employee union members is not a recipe for job growth.
The Obama administration's record-setting pile-on of regulation after regulation surely hurts as well. Obamacare regulations deter many a business from creating job No. 50. Higher minimum wages destroy jobs in which entry workers can develop skills and good work habits. Mandates for increased benefits and leave time crowd out job creation.
People are also less willing or able to move to take advantage of opportunities elsewhere than in the past. Why is this? One reason is Social Security disability payments, which have tripled since 1980 and doubled since 1995.
People once left the mountains — for Michigan in the 1940s, Texas in the 1990s. Now they stay put and wait for $13,000 in annual SSDI.
Another factor in decreased mobility is that more young people than in the past live with their parents and it's just too good to leave for job opportunities.
So this is temporary, right?
Well, not necessarily:
Unfortunately, the likely policies of the presumptive Democratic presidential nominee would make things worse.
Hillary Clinton would increase regulatory burdens and increase the cost of employing people. Her goal, like that of Bernie Sanders, is to make us more like Continental Europe, which has had virtually zero job growth for years.
Donald Trump's promise to "make America great again" promises restoration of a rosily remembered but largely mythical past. Abrogating trade agreements won't create half a million auto and steel jobs. Trump's penchant for deal-making and crony capitalism means propping up insiders and preventing job creation.
Here's my takeaway: We're doing this to ourselves.