Call it the Uncertainty Tax. I mean, it is not enough that the American private sector has to deal with the mercurial state of healthcare, financial and tax reform, now it has to calculate the likelihood and impact of the Obama administration unilaterally imposing draconian carbon rules? Even the EPA calls such efforts inefficient and economically disruptive. A few other thoughts:
The New Normal may be a bummer, but it’s not life-threatening for the economy. The only systemic risk at the moment is the political prospects of Democratic incumbents on Capitol Hill. They dread standing for reelection in 2010 if the unemployment rate remains anywhere near double digits. The forthcoming jobs bill is a product of political panic. And using TARP to pay for it confirms the fears of those back in the fall of 2008 who thought the bank bailout fund would eventually become a political slush fund.
From pollster Rasmussen:
Running under the Tea Party brand may be better in congressional races than being a Republican.