The Riskiness of Putting Trust in the Best and the Brightest

by Don Boudreaux on March 3, 2010

in Financial Markets,Frenetic Fiddling,Hubris and humility,Intervention,Man of System,Nanny State,Regulation,Risk and Safety,The Crisis,Unprecedented intervention,What's wrong with the country

The Washington Times‘s Tony Blankley makes a strong case against Uncle Sam’s proposed “systemic-risk regulator.”  Here are his concluding, and I think key, paragraphs:

But the purpose of the proposed systemic-risk regulator is not only to spot the impending systemic risk – but to intervene to prevent it from happening. Consider the power such a regulator would have. Consider that the existence of such a regulator would increase moral hazard – as it would be assumed that if the systemic regulator isn’t warning of danger, market players would be more likely to assume risk is low. And consider the consequences of using such power mistakenly.

For example, let’s say the regulator spots what he believes is a dangerous national real estate bubble. He acts quickly to snuff it out by raising interest rates or requiring minimum 40 percent down payments or some other intervention. What was a booming economy with 3 percent unemployment turns into a hard recession with 8 percent to 10 percent unemployment.

But later it is determined that it was not a bubble, but rather the beginning of what would have been a steady, healthy increase in value. Imagine if such a regulator had existed in 1955 and snuffed out the great post-World War II expansion that made America a prosperous middle-class nation of homeowners in suburbia rather than poorer renters in the city.

It is not given to the smartest people in the world the capacity to see the future, to discern with sufficient precision the details of the moment that cause the critical consequences in the future.

But it certainly is the lamentable history of man that we have the power to screw things up all the time. Remember the vaunted Japanese industrial policy of the 1970s that was going to permit Japan to shrewdly dominate the economic world over us hapless free-market countries with no governmental power to identify the industries of tomorrow?

In the end, the call for a systemic-risk regulator is yet another futile expression of faith in the power of government to outthink the markets. It is another foolish bet on bureaucrats and politicians in a tightly regulated economy being more likely to bring prosperity than free businessmen, investors and consumers in a free market. It is the biggest sucker bet in history: a bet on tyranny over liberty.

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  • D. Kennedy
    The fundamental problem is the Left believes the universe is deterministic. The reality is it is not.
  • vikingvista
    I don't know. Somethings seem to move like clockwork. Take leftist power expansion and destruction of human lives, for instance. Very predictable that.
  • D. Kennedy
    Predictable - because the only way they can get the result they want is to eliminate anyone who acts or reacts (to them) unexpectedly.
  • Back in my engineering days, we tried to avoid single points of failure, for really good reasons.
  • Economiser
    Does anyone doubt that the Fed already had the de facto power to step in to prevent the housing bubble? They were the systemic regulator before the term became popular.

    Bernanke's intervened a lot over the past two years in ways that the Fed was never designed to do. They had that same ability in 2005. Not only did they miss the bubble, but there's no way they would've acted to squelch what everyone hoped was a strong economy. Congress clearly wouldn't stand for it.

    Why would a new "systemic regulator" be any better or different? It would just be vested with more de jure power, and hence more dangerous.
  • vikingvista
  • Methinks1776
    The big difference is that, unlike the Fed's, the "systemic reuglator's" power would be pretty much unlimited - except by political winds. This is little more than a ploy for congress to grab more power via central administration of the economy.

    A systemic regulator is pure, unadulterated fascism.
  • Methinks1776
    "In the end, the call for a systemic-risk regulator is yet another futile expression of faith in the power of government to outthink the markets."

    Yes, some of us are looking to the omniscient Lord to save us from our earthly terror. Isn't this why man made up religion?

    Oh, how the statists despise the religious right for supposedly imposing their morality on them while they fight mightily to force everyone else to submit to their religion of state at gunpoint.
  • muirgeo
    No one is forcing you. You came here willingly. This is a democracy. You can leave. We don't need bottom feeders. Democracy is not a gun at your head dumb shit.
  • Methinks1776
    Moron, you've been told a million times that this is a Republic.

    This is why I say you're not even a useful idiot. You'll be among the first wave of people being shot or imprisoned, if history repeats itself.

    Now, go back to ripping tonsils out of little kids' throats and chopping off perfectly good limbs just to make a buck. Kenya's village idiot is coming for you next.
  • Gil
    No shit! The U.S.A. never had a monarchy, a hereditary ruling power, no kidding!
  • vikingvista
    Since the UK has a hereditary monarch, and is a republic, I'm not sure what you're driving at.
  • Gil
    The U.K. is a constitutional monarchy not a republic. Methinks & co. use the term 'republic' as though it has some magical meaning when it does not.
  • vikingvista
    It is because of the constitutional monarchy, and the consistent tradition of the monarch's restraint, that there is a separation of powers in the British government. The UK therefore has all the necessary trappings of a republic. Were republican activists to get their way and constitutionally remove all of the monarch's state authority and replace her by an independent head of state, the effect on the system would be little more than nominal.

    Do the written laws of the UK describe a republic? It is my understanding that they do not, as the monarch retains nominal powers in every aspect of the state. But in practice, it would be shocking and likely not popularly tolerated if she were to wield them.

    But more to your original point--a hereditary ruling power does not mean that the government isn't republican.
  • vikingvista
    "Democracy is not a gun at your head"

    Unless maybe you find yourself in a minority.
  • muirgeo
    Your not in the minority. Your just too stupid to know which way to turn... a victim of Stockholm syndrome... but don't worry we got your stupid back. You're on our side even if your too big of a duffess to know it.
  • vikingvista
    There is no moral principle behind majority rule. There are countless ways in which you are in a majority, and countless ways in which you are in a minority. And the point of reference is not just which of countless issues you want to consider, but who counts in the population. Inevitably the vast vast majority of people who must live with "majority rule" decisions, have no choice, not having been born yet. The power is then in accidental or transient circumstances, and usually in that small minority who defines the debate, and can carve out defined minorities for oppressive exploitation as it suits them.

    If you want to protect yourself from oppression by a minority, you must stand for the principle that NO ONE PERSON NOW OR EVER should be oppressed. Since human wants and beliefs are so widely varied and contradictory, all possible variations of disagreement must be accounted for. This immense subjectivity about the meaning of oppression and everything else means that only a minimal objective standard will be able to consistently apply to everyone. Since a man alone is not oppressed by anyone, that is the minimal standard. And therefore the ONLY rights that are always devoid of any oppression, are negative rights.

    If you want to couch the issue in terms of majority, then the only principled majority is unanimity. And since nobody wants to be oppressed, unanimity can only be achieved outside the consideration of any kind of oppression of one person over another. The only principled position then, is voluntarism.

    Once you shrink from unanimity, you have created an opening for the demagogues to move around the population like a target, ultimately targeting anyone and everyone, in successive small minority packets.

    Majority rule is no more a principled stance than is accounting. But like accounting, it can be a very useful tool for nefarious ends. As such, it is a frequent rallying cry for all manner of would-be thieves and oppressors.
  • brotio
    The guy who isn't sure which end of a thermometer to stick up his ass calling someone else dumb. That's too funny!

    You believe that only politicians can know how much liberty a man needs in order to be free. That necessarily entails a gun to the head of those who disagree with the politician.
  • muirgeo
    Nope... not if the politicians are truly accountable to the people. Our problem is they are accountable to monied interest because your libertarian stupid shit philosophy gets too much play in policy issues. Sadly they in power know it's a lie but find it useful to direct tools and fools such as yourself to do their bidding in the name of liberty. Do you realize how little they think of you? Thus we end up subjects of the great banks with dipshits like you playing the court jester defending these guys.
  • JohnK
    Their religion of state has a clearly defined morality: political correctness.
    They, like the socialists in Bastiat's day, do not understand the distinction between government and society. They think that they are government. So when they empower government that they think they empower themselves. That is why there is no power that they are unwilling to give to the State.
    Combine their belief that they are government with their worship of government, and you get a form of self worship.
    These people are quick to decry religion, when they themselves are very devout Humanists.
    They think they are gods.
  • muirgeo
    No we believe in diffusing power and government democratically because we know what you want ultimately leads to concentrated power. We are the true enlightened seekers of liberty while you are the brainwashed befuddled fools pushing the agenda of the powerful minority over the needs of the majority. Your tools and cult members of Market Fundamentalism with an Invisible Hand for your God. F'in stupid!
  • JohnK
    No we believe in diffusing power and government democratically because we know what you want ultimately leads to concentrated power.

    That has to be among the most idiotic statements I've ever read.
  • muirgeo
    Let me come back to this. Because the fact that you think its so stupid could only be because you know of a better way to set up society and you will duly be able to point to that way as represented in the modern world or some where through history. So..... I'll be waiting to be so directed.

    But since I already know you'll have no reply (well maybe you'll point me to communist Hong Kong or such) ... isn't it a bit MORE stupid to believe in something that doesn't exist or has shown no chance of success ... that being a libertarian based society. I mean isn't THAT belief really stupid. By the way would such a society ... if it did exist... come with pink unicorns too?

    So please don't call me stupid when I have reality on my side and you have nothing but an unworkable fantasy that a self centered greed driven society will be so nice because some invisible hand god will keep things in perfect order.
  • JohnK
    ..you know of a better way to set up society...

    Nobody does. That's the whole point.

    Or do you mean a better way to set up government?

    You do understand that society and government are not the same thing, right?
  • JohnK
    I didn't call you stupid. I said your statement was idiotic. The word 'idiotic' was describing your statement, not you.
  • vikingvista
    "I didn't call you stupid."

    Stupid is forgivable. This man is simply foul.
  • muirgeo
    And here you live one of the most privileged beneficiaries of such a system and like a spoiled little brat of a child you feel oppressed because you can't always have your way.

    You'd certainly be one of the indentured in the system you desire.
  • JohnK
    Seriously, what are you talking about?

    You are one of the first to advocate for a strong centralized government controlling everything, then you say "No we believe in diffusing power and government democratically because we know what you want ultimately leads to concentrated power."

    Talk about a contradiction.

    Power requires force. Force may only be used by the government, or by the consent of the government.

    What I want is less government, less force, and more freedom.

    How does that lead to concentrated power?
  • muirgeo
    WTH? Are you paying any attention to what companies like Goldman Sachs are doing to the global economy, our countries economy, your wallet???
  • JohnK
    Goldman Sachs cannot use force against anyone unless the government backs them up or turns a blind eye.
    Goldman Sachs is still in business only because the government did not allow the free market to let the company fail.
    Can you tell me one thing that Goldman Sachs has done to the global economy, to our country's economy, or to my or your wallet, that has not required implicit or explicit help from the government?
  • Methinks1776
    He tops himself every time, doesn't he?
  • JohnK
    I hope vid adds that one to his list.
  • vikingvista
    "needs of the majority"

    The majority should just take what they need.
  • muirgeo
    Absolutely, with in the bounds of the constitution (loosely interpreted) because ALL of frickin history has been suppression of the majority by an elite minority which YOUR philosophy would return us to.

    Most people are good so f yes I'll go with the majority rule via democracy. And people who don't like it or who are ok with minority corporate rule should get the f out.
  • Methinks1776
    Exactly. It's worse than religion because in religion there is an incomprehensible higher power to which we are all subject. The statist believes he IS that higher power.

    This is not new. I moved here from a country that believed this long before the 1917 revolution. The Czar was God's representative on earth and was supposed to protect and provide for the unwashed masses. To a large extent, this is still the mentality in the modern-day Soviet Union - and we see how well this is working out for them.
  • vikingvista
    Supernatural gods don't have guns and concentration camps.
  • Methinks1776
    Good point. These guys are way worse.
  • muirgeo
    Yes we have guns and concentration camps... the round up will start soon. You figured us out too late... but maybe Glen Beck will still be able to save you.
  • brotio
    Your hero, the righteous admirer of Uncle Joe Stalin had his concentration camps, and ordered that American citizens be starved to prop up hog prices. Don't act like these things are foreign to your kind.
  • colinkeesee
    For me personally, the most important essay on economics was Hayek's knowledge and information in society (upon which Thomas Sowell expanded so wel land made the essay into an entire book). It shows why a centrally planned economy cannot work or even why a team of experts, using the latest and best methods, with excellent research staffs, all working deligently and without any taint of special inetrest simply cannot aggregate and act on and allocate in accordance with the massive amount of actuall data that exists, as wel las the market can.

    The market is not perfect and can be helped and modified by government action but central planning or even forceful steering is bound to, over the long run (and to the Keynsians, I would add, in the short run as well), produce results that are, relative to market outcomes, sub optimal.

    Also, who will this "bubble cazr" be exactly? No one is qualified for this job. If someone is out there with the perfect clairvoyance to see the exact future path of asset markets, that super human individual would very soon be able to take in all of the rents in every asset market on the planet.
  • The market is not perfect and can be helped and modified by government action but central planning or even forceful steering is bound to, over the long run (and to the Keynsians, I would add, in the short run as well), produce results that are, relative to market outcomes, sub optimal.

    That to is problematic as government must be authorized to "help" and any successes tend to inspire calls for more and more help until you eventually end up with central planning.
  • vikingvista
    "If someone is out there with the perfect clairvoyance to see the exact future path of asset markets, that super human individual would very soon be able to take in all of the rents in every asset market on the planet."

    The idea is to create a police force of clairvoyants to use GUNS to take in all the rents in every asset market.
  • iamse7en
    Brilliant article. Thank you.
  • muiurgeo
    "The Riskiness of Putting Trust in the Best and the Brightest"


    The best and the brightest were diverted from productive endeavors and went on to Wall Street to create the new unregulated nuclear financial products that have destroyed the world economy and concentrated power more then it has been in a century.
  • brotio
    Steve_O asked you a couple of questions on the 'A Second Letter...' thread. As usual, you ignore inconvenient questions.
  • muirgeo
    1880-1930 Boom bust boom bust boom bust boom bust boom..GREAT Depression...CRASH>>>>

    1935- 1980 New Deal Regulation.... no boom no bust... steady growth and prosperity... basically the strongest economy the world has EVER seen...

    1985 to present.... Dismantling of New Deal regulation.... return market fundamentalism ... boom bust boom bust boom bust boom... CRASH.....


    "... expression of faith...???" yeah the faith of market fundamentalism over historical fact.
  • Dismantling of New Deal regulation

    Dismantling? I don't think that word means what you think it means.
  • Randy
    Again with the vision... And I ask again, how will you achieve it without the use of totalitarian methods?
  • vikingvista
    I hear North Korea was able to shield itself from the housing crash.
  • dsylexic
    great depression was caused by the fed -not the market. get your fantasy facts correct.
    anyway, do you want appoint bernanke -who didnt see the bubble -as the regulator overlord or krugman -one who bayed for the housing bubble?
  • lukas
    Care to provide an example of a now repealed New Deal regulation that would have prevented this crisis?
  • vikingvista
    It's an easier task to come up with New Deal regulation whose repeal ended the Great Depression.
  • muirgeo
    The Glass-Steagal Act prevented the merging of commercial and investment banks. It was overturned ( after 9 major lobbying efforts by Wall Street interest) and THAT allowed mortgages to be repackaged as securities and passed from commercial banker to investment banker as MBS (mortgage backed securities) and ultimately unregulated CDO's (via Gramm Leach Bliley act of 1999). There were plenty of more deregulations that occurred specifically at the wish of Wall Street and Wall Streets regulatory capture just added to the problems.

    Don thinks you can't make rules to prevent these problems. That's clearly not true. That's just spouting dogma from a fundamentalist point of view.


    Here's some simply rules that would help.
  • Methinks1776
    Same moron, same meme, different day.

    Glass-Steagal was not repealed. The main point of G-S was to (stupidly) separate investment banks and commercial banks.

    Mortgages have been been packaged into ABS known as CMO (collateralized Mortgage Obligations) since Soloman Brothers invented that product in the early 1980's. A CDO (Collateralized Debt Obligation) is just another ABS of other debt.

    Investment banks were not the ultimate customers for any ABS. They did what investment banks do - underwrite the securities for which there was a market.

    No regulation partially repealed or wholly repealed would have stopped any of this since ABS has been around for decades - before any phantom "deregulation", so vivid in the imaginations of ignorant putzes.

    Muirdiot has been vomiting the same crap on Cafe Hayek for two years without understanding a single word of his own mental drooling.
  • muirgeo
    "Glass-Steagal was not repealed." ScumSucker


    Wow that's interesting!!! So commercial banks ARE banned from underwriting securities. I didn't know that. Good thing we have an honest scum-sucker from Wall Street to set the record straight.

    Anyway here's the real history of the issue;

    http://www.pbs.org/wgbh/pages/frontline/shows/w...

    Scumsucker... what's it like being a scavenger for a living on the one hand and on the other claiming to be a proponent of competitive markets? No wonder you're such a nasty person. You have no moral grounding... just an mindless pursuit of the dollar and a devotion to market fundamentalism. A view of life as scary as fundamentalist Christians who preach hate. Making a living on abstractions and never actually producing or creating or making something of use and value probably eventually messes with ones mind assuming your not an outright sociopath.
  • Methinks1776
    LOL!!
  • muirgeo
    Hey ScumSucker... how you doing?

    Anyone that wants to see through the bull crap of a insider like methinks who profits off and defends the destruction that is modern day Wall Street should go to Christopher Whalen sites and read through all of his articles. He reveals people like methinks for the scourge on society that they are.

    Christopher is the co-founder of Institutional Risk Analytics, and consulting services for auditors, regulators and financial professionals.

    http://www.rcwhalen.com/articles.asp

    Here are two incredible transcripts and audio's talking about his testimony to congress on the danger of these financial products.

    http://demandside.podbean.com/index.php?s=whale...


    "..the views of the existing financial regulatory agencies and particularly the Federal Reserve Board and Treasury, should get no consideration from the [Congress], since the view of these agencies are largely duplicative of the views of JPM and the large OTC dealers ."

    "In my view, CDS contracts and complex structured assets are deceptive by design and beg the question as to whether a certain level of complexity is so speculative and reckless as to violate US securities and anti-fraud laws. That is, if an OTC derivative contract lacks a clear cash basis and cannot be valued by both parties to the transaction with the same degree of facility and transparency as cash market instruments, then the OTC contact should be treated as fraudulent and banned as a matter of law and regulation. Most CDS contracts and complex structured financial instruments fall into this category of deliberately fraudulent instruments for which no cash basis exists.

    What should offend the Congress about the CDS market is not just that it is deceptive by design, which it is; not just that it is a deliberate evasion of established norms of transparency and safety and soundness, norms proven in practice by the great bilateral cash and futures exchanges over decades; not that CDS is a retrograde development in terms of the public supervision and regulation of financial markets, something that gets too little notice; and not that CDS is a manifestation of the sickly business models inside the largest zombie money center banks, business values which consume investor value in multi-billion dollar chunks. No, what should bother the Congress and all Americans about the CDS market is that is violates the basic American principle of fairness and fair dealing."
  • Methinks1776
    Why am I not surprised that a moron like you doesn't know the difference between a CDO and a CDS - even after I spell it out for you?

    The saddest thing about you is that you reproduced.
  • muirgeo
    The best thing about you is that you didn't!!!
  • vikingvista
    You are more than capable of defending yourself, but if this were not just a *virtual* cafe, I know of one ugly little man who would be attempting to complete his vitriolic rant from the floor.
  • Methinks1776
    Ya, Viking!

    Somehow, I don't feel compelled to defend myself against the moronic outbursts of imbeciles. If nothing else, it's good for a laugh.
  • MightyPutty
    A 1999 study in The Journal of Economic Perspectives by Christina Romer (now head of the Council of Economic Advisers) found that "real macroeconomic indicators have not become dramatically more stable between the pre-World War I and post-World War II eras, and recessions have become only slightly less severe." Ms. Romer also noted that "recessions have not become noticeably shorter" in the era of Big Government. In fact, she found the average length of recessions from 1887 to 1929 was 10.3 months. If the current recession ended in August, then the average postwar recession lasted one month longer—11.3 months. The longest recession from 1887 to 1929 lasted 16 months. But there have been three recessions since 1973 that lasted at least that long.

    http://online.wsj.com/article/SB100014240529702...

    Given the speed at which modern economy moves, information, goods, people, money etc. Wouldn't you expect a little better that?
  • muirgeo
    That's not supported by the data I know;

    http://wwwdev.nber.org/cycles/cyclesmain.html

    And again clearly the two biggest recessions / depressions occurred in the deregulatory era's of the 20's and the 00's.
  • danielkuehn
    1920-21 was a manufactured depression caused by deliberate Federal Reserve policy - I'm not sure it's comparable. Also note MightyPutty's point about Romer's work. She's demonstrated fairly conclusively that pre-war recessions were not as volatile as people have thought. Even that analysis can only go back so far, though. I tentatively agree with your point - I just wouldn't overstate it.

    And the existence of some stablizing regulations from the 40s to the 80s doesn't justify regulation in general.
  • MightyPutty
    Your president is advised by such stupid, lying nincompoops like Christina Romer.

    Can you explain why NBRs data is better than Christina's based on how they came up with the data?
  • danielkuehn
    I'd be careful not to overstate the disagreement between Romer and the NBER. She used to work for the business cycle group at NBER, after all and the data she used to make that determination (a comparison of the Kuznets and the Kendrick series) is on the NBER website for all to see and use! I find it odd that the Great Depression is excluded from the WSJ's commentary. How does that make sense? Shouldn't that be counted in the pre-regulatory set? Also - length isn't everything. Depth is arguably more important, as is frequency. If you look at pre-1945 and post-1945, pre-1945 experieneced 0.24 recessions per year and post-1945 experienced 0.17 recessions per year. None of this is conclusive - but there is enough to muirgeo's point that it shouldn't just be dismissed.

    You can also look Reinhart and Rogoff's new book. In practically every chart printed in their book (and there's a lot of them) one thing repeatedly jumps off the page at you: the dearth of financial crises (the source of the worst recessions) between roughly 1940 and the 1970s. Like I said - not conclusive, but not to be dismissed out of hand either.
  • MightyPutty
    Muirgeo has a few "points" that he repeats ad nauseum on this blog. That comment had one of them. I'm not dismissing anything. Romer's point is that the depth of the recession has shown a mild improvement, if any.

    What do you think of my question: Given the speed at which modern economy moves information, goods, people, money etc. Wouldn't you expect a improvement in depth and breadth of the recession, regardless of the tinkering by central planners?
  • danielkuehn
    In some cases I think that makes sense, in some cases it doesn't. Inventory cycles played a major role in earlier recessions, and technological improvements have certainly cut down on the volatility of inventory cycles. At the same time, the increased intricacy and interdependence of the economy could also leave open more possibilities for bottlenecks that stall growth. The business cycle is really a modern phenomenon for precisely this reason - the adjustment problems inherent in a monetary, market economy. Say's law is incontrovertible in a barter economy, but in a modern monetary economy it's much less dependable. And of course one of the improvements you mention address fundamental aggregate demand issues, or bubble psychology (indeed - the advances can have the tendancy of enhancing bubble psychology).

    So my answer is yes - I can definitely imagine ways where the "speed of the modern economy" has helped, but I think the net effect is fairly ambiguous - I'm not sure what direction the net effect is in. You say "central planners". I wouldn't give central planning any credit for the stabilization we've achieved - but I would credit central bankers and a better understanding of macro-stabilization with some of the successes we've experienced in the 20th century. I think the 20th century has demonstrated the abysmal failure of central planning, though, which should have been clear to everyone from the start anyway.
  • MightyPutty
    Business cycles unrelated to weather, disease, or wars are a relatively new phenomenon; new in the sense that it is, arguably, less than 300 years old. I would think that the history of business cycles is closely tied to the history of modern credit markets, and rapid expansion of output with the beginning of industrial age.

    Bubble psychology is fine, but it can't be supported without a monetary policy that accomodates that psychology. Mass psychology is egged on by people who supposed to know better, like economists, policy makers etc. But that's besides the point.

    The real point is, we have been told why the business cycles happen. We have had policy pitchmen with cure for business cycles. even the levers of the market itself have become more effiecient. Yet, depth and length of business cycle hasn't gotten a whole lot better. Wouldn't you expect better?

    If you compare the unemployment trends over the last few recessions ( purportedly mild ones), all we have done is replace the depth of the unemployment cycle with its length.

    http://1.bp.blogspot.com/_pMscxxELHEg/S5EJ-B5NW...
  • danielkuehn
    1. Yes - I think credit markets explain a lot of the business cycle, but I think they were best at explaining the business cycle before the depression. They've been less useful for understanding the business cycle since then.

    2. Why do you need a monetary policy to accomodate bubble psychology to have bubble psychology? Even without any monetary policy you would still have bubble psychology - private banks do the job as well as any policymakers. Indeed, the whole point of having an explicit monetary policy has been to counter-act previous credit cycles. I think they've done a reasonably decent job at that, which brings me to:

    3. As far as I can tell we HAVE ameliorated the business cycle. I disagree with the premise of your third paragraph, and

    4. The jobless recoveries you allude to in your conclusion has little to do with macroeconomic policy. Most people have attributed this trend to productivity growth, makes robust job creation during a recovery difficult.
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