Legislative Gridlock isn’t the Problem

An interesting take from Larry Summers:

The great mistake of the gridlock theorists is to suppose that progress comes from legislation, and that more legislation consistently represents more progress. While people think the nation is gripped by gridlock, consider what has happened in the past five years: Washington moved faster to contain a systemic financial crisis than any country facing such an episode has done in the past generation. Through all the fractiousness, enough change has taken place that, without further policy action, the ratio of debt to gross domestic product is expected to decline for the next five years. Beyond that, the outlook depends largely on health-care costs, but their growth has slowed to the rate of GDP growth for three years now, the first such slowdown in nearly half a century. At last, universal health care has been passed and is being implemented. Within a decade, it is likely that the United States no longer will be a net importer of fossil fuels. Financial regulation is not in a fully satisfactory place but has received its most substantial overhaul in 75 years. For the first time, most schools and teachers are being evaluated on objective metrics of performance.Same-sex marriage has become widely accepted.

No comparable list can be put forth for Japan or countries in Western Europe. Yes, change comes rapidly to some authoritarian societies in Asia, but it may not endure, and it may not always be for the better.

Anyone prone to pessimism about the United States would do well to ponder the alarm with which it viewed the Soviet Union after the launch of the Sputnik satellite or Japan’seconomic rise in the 1980s and the early 1990s. One of America’s greatest strengths is its ability to defy its own prophecies of doom.

None of this is to say that the United States does not face huge challenges. But these are not because of structural obstacles. They are about finding solutions to problems such as rising income inequality and climate change — issues for which we do not quite know the way forward. These are not problems of gridlock but of vision.

About ozidar

I'm an Assistant Professor of Economics at the University of Chicago Booth School of Business and a Faculty Research Fellow at National Bureau of Economic Research. You can follow me on twitter @omzidar. http://faculty.chicagobooth.edu/owen.zidar/index.html
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