America’s economic future is increasingly uncertain. In my view, unpredictable economic policy—massive fiscal “stimulus” and ballooning debt, the US Federal Reserve’s quantitative easing with multiyear near-zero interest rates, and regulatory uncertainty due to ObamaCare and the Dodd-Frank financial reforms—is the main cause of persistent high unemployment and our feeble recovery.
A reform strategy built on more predictable, rules-based fiscal, monetary and regulatory policies will help restore economic prosperity. That will be a daunting task, of course, but as they undertake the necessary changes, reformers should pay close attention to what the great economist and philosopher Friedrich A. Hayek wrote in the middle years of the last century.
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The Wall Street Journal
Edited excerpts. John Taylor is professor of economics at Stanford and a senior fellow at the Hoover Institution. His book, “First Principles: Five Keys to Restoring America’s Prosperity” (Norton 2012), was awarded the 2012 Hayek prize by the Manhattan Institute. This op-ed is adapted from his Hayek Prize Lecture delivered on 31 May.
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