Hoisted from Comments: Simon van Norden:
Matthew O'Brien Schools Republican Economist Glenn Hubbard...: To understand the integrity of Hubbard's argument, consider his claim that
[U]ncertainty over policy--particularly over tax and regulatory policy--slowed the recovery and limited job creation. One recent study by Scott Baker and Nicholas Bloom of Stanford University and Steven Davis of the University of Chicago found that this uncertainty reduced GDP by 1.4% in 2011 alone."
Note the phrase "this uncertainty: he's talking about uncertainty "particularly over tax and regulatory policy." Now read the analysis by Baker, Bloom and Davis http://www.epi.org/files/2011/PolicyUncertainty.pdf. From their abstract
The index spikes around presidential elections and major events such as the Gulf wars and the 9/11 attack. Index values are high in recent years and show clear jumps associated with the Lehman bankruptcy, the 2010 midterm elections, the Euro crisis and the U.S. debt-ceiling dispute.
Uncertainty over regulatory policy? No mention. Uncertainty over tax policy? No mention. What Hubbard seems to be doing is interpreting the uncertainty created by elections (and the debt-ceiling showdown) as uncertainty about regulatory and tax policy (as opposed to, say, government spending.)
