Politicians Are Not the Answer

Three cheers for Megan McArdle:

I think Pawlenty’s claims are crazy–though not specially crazy. They’re crazy the way that all political speeches on the economy are insane: they claim far more power over economic growth than any politician actually has.

It is entirely possible that the economy will, for some period in the next few years, grow at 5%. But if it does so, this will not be because Tim Pawlenty–or Barack Obama–have done something to cause it. We don’t know how to lift real GDP growth much above its trend level, and we certainly can’t do so for [years o end]… A really bad president can lower growth from its trend (wage and price controls, anyone?) But–sorry, Republicans–Barack Obama is not that bad a president. And sorry, Democrats, but he’s not that good, either. Any difference his tax and regulatory policies are making in our growth rate are extremely small, measured in basis points, not percentage points.

You’ve heard me point this out before–it’s a mainstay of my campaign coverage. But as long as politicians keep saying it, I’ll keep repeating it: the president does not control the economy. He cannot double our incomes, or even the economy’s growth rate, by the sheer force of his fiery will.

Preach it, sister. This cannot be stressed often enough even if one cannot, alas, expect politicians and pundits to pay any attention to it. Megan is writing about America but exactly the same points might be made about David Cameron and George Osborne too. They have some limited influence and, perhaps, a little more than the American president and Congress do, but they still cannot command the economy. Avoiding crippling blunders is the objective and, thus far, there’s little reason to suppose Boy George is a wrecker. He may have made mistakes – only time will tell – or he may be broadly on the right track but his powers remain limited and he is not a Superhero. r a Supervillain.

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