Back last August, Jim Tankersley on the erosion of the "Obama=Policy Uncertainty=Depressed Economy" argument:
‘Uncertainty’ isn’t a problem anymore: Another month, another dive in the Stanford/University of Chicago Economic Policy Uncertainty Index. It’s now down to its lowest level since 2008. The index seeks to measure the effect of policy uncertainty, including pending regulations and expiring tax provisions, on the economy. As you may have heard once or twice over the last few years, many conservatives blame uncertainty for holding back hiring and growth in this recovery. Those lawmakers love to cite this index as proof of elevated uncertainty.
According to the index, the decline of uncertainty this year is clear. And the hiring boom that was supposed to follow? Well…
To my knowledge, none of the following have marked their beliefs to market in any significant way.
Anybody know different?
James Pethokoukis: Where’s that 5% unemployment rate Obama promised by now?: Yes, the Great Recession was worse than Team Obama knew back in 2009. And other bad stuffed happened later…. And there is no sign yet that Obama is reevaluating the notion that higher taxes and more government investment is the path to American prosperity, or acknowledging that uncertainty about Obamacare might be slowing the creation of full-time jobs.
Kevin Hassett and Alan Viard: Unemployment Up As Uncertainty Over Obama Tax Hikes Stifles Job Growth: Hassett and Viard say that "[t]he expectation of tax increases, such as those in Mr. Obama's plan, is on the minds of the people who should be leading the recovery." This creates uncertainty. And uncertainty hurts hiring. This was confirmed by a National Association of Manufacturers (NAM) report this week…. "'Small businesses are America's job creators, responsible for 60 percent of the net new jobs created in the last decade,' the report states. 'But uncertainty about looming tax hikes has stunted employment growth and until Main Street begins to hire, the unemployment rate will remain unacceptably high.'"
John Stossel: Where Are the New Jobs?: Nothing more effectively freezes business in place than what economist and historian Robert Higgs calls "regime uncertainty." "(A)ll of these unsettling possibilities and others of substantial significance must give pause to anyone considering a long-term investment, because any one of them has the potential to turn what seems to be a profitable investment into a big loser. In short, investors now face regime uncertainty to an extent that few have experienced in this country -- to find anything comparable, one must go back to the 1930s and 1940s, when the menacing clouds of the New Deal and World War II darkened the economic horizon." Uncertainty created by Obama's legislative "successes" are comparable to the Depression and World War II? This does not bode well for job growth. Higgs says: "Unless the government acts soon to resolve the looming uncertainties about the half-dozen greatest threats of policy harm to business, investors will remain for the most part on the sideline ... consuming wealth that might otherwise have been invested."
Geoff Colvin: Business's real problem: Uncertainty, uncertainty, uncertainty: Economic uncertainty, especially policy uncertainty, is greater than it has been in many years. And if you're wondering why the U.S. economy is barely moving or why millions of workers can't find jobs, extraordinary uncertainty is a major part -- maybe the largest part -- of the answer.
Sylvain Leduc and Zheng Liu: Policy Uncertainty and the Slow Labor Market Recovery: Since 2009, U.S. job vacancies have increased but unemployment has fallen more slowly than in past recoveries. There is evidence that heightened uncertainty about economic policy has been an important factor behind this change. Increased uncertainty may discourage businesses from filling vacancies, thereby raising unemployment. An estimate indicates that, without policy uncertainty, the unemployment rate in late 2012 would have been close to 6.5%, 1.3 percentage points lower than the actual rate.
John Goodman: Is ObamaCare Causing the Jobless Recovery?: Take a look at the chart below. Public uncertainty about federal economic policy under the Obama presidency is higher than it has been in 30 years. Economists at Stanford University and the University of Chicago have actually discovered a way of measuring how uncertain people are. They find that their measure of uncertainty correlates with such economic activities as deciding to invest, deciding how much to produce and deciding whether to hire more workers.
Glenn Hubbard: Glenn Hubbard Tries to Snooker Jonathan Cohn: Here your question appears to be based on an idea that the "short run" and the "long run" are different subjects. That is another underpinning of recent policy errors. Getting the long-term right (e.g., a credible and stable path of tax rates instead of periodic Taxmageddons, entitlement reform instead of a spending binge, and regulatory stability instead of regulatory uncertainty) would encourage investment and consumption today. Such long-term action would also give breathing room for properly done short-run action. Hence, it is no accident that Romney has focused on the right long-term policy. If you want to take a look at the real-world consequences of policy uncertainty, you might consider the research by Nick Bloom (Stanford) and Steve Davis (Chicago), which concludes that returning to pre-financial-crisis levels of policy uncertainty would lead to 2.3 million additional jobs over 18 months.
Nicholas Bloom, Steven Davis, and Scott Baker: Macro and Other Market Musings: Fed Uncertainty: Nicholas Bloom, University of Chicago professor Steven Davis, and Stanford grad student Scott Baker in a new paper titled Measuring Economic Uncertainty. They find that economic uncertainty caused real GDP to decline 3.2% over the past few years. This paper has stirred controversy because it has been used by conservatives to show that uncertainty created by President Obama is the main reason for the ongoing slump.
Robert Higgs: The Beacon: The Blog of The Independent Institute: Now, however, more respectable analysts than I have accepted the challenge of showing that regime uncertainty can be measured systematically and that the resulting index “shows U.S. policy uncertainty [is currently] at historically high levels.” This research has been been carried out by three analysts at two of the world’s preeminent research universities: Scott R. Baker and Nicholas Bloom at Stanford University and Steven J. Davis at the University of Chicago. I highly recommend that anyone interested in this matter read the October 5 summary of these analysts’ research published online by Bloomberg News.