Thursday, November 4, 2010

Gridlock and Regime Uncertainty - They aren't the same.

For those of us who want to see the role of the State reduced in the bedroom, the boardroom, and the war room, election day always brings mixed feelings.  However, the one outcome that sometimes cheers us up happened this week: one party in control of the presidency and the other in control the Congress.  What is often called “gridlock” is often good for freedom, at least in relative terms, since it checks the power of any either party to ram through its nearly-always anti-freedom agenda.
In the current environment, anything that halts the forward march of government control over economic decision-making would be a good thing.  This is particularly so because the economy currently seems to be suffering from what economic historian Robert Higgs calls “regime uncertainty.” For Higgs this term refers to the uncertainty generated by government policies that generally trend toward more State control.
Even proposals that have passed, such as health care and financial “reform,” are so complex and confused that no one is sure exactly what they will mean for the business community.  As a result, Higgs argues, the private sector hesitates to invest. (read more)