Thomas Friedman
thinks he knows why the economy isn't growing:
Apple is currently sitting on $137 billion of cash in the bank. There are many reasons Apple has not spent its cash horde, but I’ll bet anything that one of them is the uncertain economic and tax environment in this country.
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Message: There is no doubt our economy is primarily being held back by the deleveraging and drop in demand that resulted from the 2008 financial crisis. But they are being reinforced today by uncertainty and worry that we do not have our political house in order and, therefore, our tax, regulatory, pension and entitlement frameworks are all in play.
I think companies are uncertain about demand, and I think the best way to fix this would be for the federal reserve to target NGDP. But even if you thought Friedman was right, and that a big problem was regulatory uncertainty, why would this be your solution:
Therefore, [Obama] owes it to himself and to the country to make one more good shot at a Grand Bargain on spending, investment and tax reform before he opts for a strategy of trying to pummel the Republican Party, hoping that he can win the House for the Democrats in 2014 and then push through his second-term agenda unencumbered.
If you are concerned about regulatory uncertainty, a grand bargain is a terrible idea. Putting tax reform on the table would mean months and maybe a few years of bargaining over tax loopholes and rates. Right now, businesses can be fairly certain that the House and Obama won't agree on much, especially not on taxes. They can be fairly certain that taxes won't really change over the next four years. Friedman's solution isn't going to happen, and according to his logic it would make things worse.
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