The Daily Dish

DC area meteorologists are predicting epic snowfall, legendary winds, historic cold, Capitol-leveling thundersnow, the dead rising, ….. you get the idea. It might snow. Economists and weathermen are viewed with comparable scorn as forecasters, a sentiment I understand. (Remember the old saying: predicting the future isn’t hard; being right is.) In the spirit of pre-forgiveness in case it turns out to be sunny and mild on Saturday, here’s a personal list of some of the worst moments in policy and economic predictions:

The Daily Dish

The question Ronald Reagan made central to politics lies at the heart of the evaluation of President Obama’s legacy. Stripped to its essentials, the Obama record has two components: (a) “emergency” responses to the financial crisis and Great Recession, and (b) the passage and or executive imposition of his domestic policy agenda. It’s not easy to draw bright lines, but the former basically consists of the stimulus bill, auto bailouts, “cash for clunkers”, a variety of mortgage relief programs, and (arguably) the Dodd-Frank financial reforms. The latter consists of a pro-union agenda at the National Labor Relations Board (overtime rules, minimum wages, joint employer rules, “quickie elections”, etc.), a clean energy/anti-carbon agenda (CAFE standards, the Clean Power Plan, DOE subsidies, anti-fracking rules), a social welfare agenda (Obamacare, enhanced child credits, enhanced EITC), an education agenda (Race to the Top, gainful employment rules, reducing student loan repayment, American Opportunity tax credit) and more.

The Daily Dish

According to the Hill newspaper former Obama Administration Secretary of State and current presidential hopeful Hillary Clinton made the case about the damaging impact of the Affordable Care Act (ACA) on incentives for full-time employment: “Well that’s why they’re going to part-time, that and also the Affordable Care Act (ACA)…” This concern emanates from an unlikely source, but reflects the incentives created by the employer mandate to provide affordable health insurance and the ACA’s choice of 30 hours as the definition of full-time work. (These are concerns above and beyond the Congressional Budget Office’s (CBO’s) conclusion that the ACA has cost the U.S. economy 2 million jobs or, more generally, the CBO conclusion that "Repeal of the ACA would raise economic output, mainly by boosting the supply of labor; the resulting increase in GDP is projected to average about 0.7 percent over the 2021–2025 period.”)

Would An “Exit Tax” Work?

The latest call for an “exit tax” for US businesses was articulated today. Fierce populist rhetoric at campaign time is perhaps expected, but this proposal doesn’t address the actual problem (an unfriendly business environment), doesn’t work in practice (jobs still leave), and continues the incentives for U.S. businesses to be bought by larger foreign competitors. In other words, despite the rhetoric, an exit tax actually helps send US headquarter jobs overseas.

The Daily Dish

China scares people, and it should. It has a threatening combination of undisguised ambition and indifference to human freedom. The announcement that the International Monetary Fund (IMF) has designated the remnimbi (the general term for Chinese money, or yuan which is a specific denomination) to join the dollar, euro, pound, and yen in the fund’s Special Drawing Rights (SDRs) reserve-currency basket raised the specter of Chinese economic domination, displacement of the dollar as the dominant global currency, and other fears.

The Daily Dish

Before the Iran deal, before the Highway funding bill, before Senate Democrats refused to allow the appropriations process to proceed, and before Congress killed the Export-Import Bank, Washington was aflutter over dynamic scoring. For the blissfully uninitiated, “scores” are the estimates of the impact of legislation on the federal budget produced by the Congressional Budget Office (CBO), the Joint Committee on Taxation (JCT), or both. The dividing line between “static” and “dynamic” scoring is not whether you take into account behavioral responses — you always do that — but whether you permit the overall size of the economy to change. Thus, dynamic scoring is really about the impact of legislation on overall economic growth.

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