Tom Friedman -- Economist

Thomas Friedman usually writes about foreign policy issues for the New York Times. His forays into domestic matters are few and far between. Friedman's Op-Ed piece this weekend ia Melange of economic theory and reality. Some parts are laughable, while others are insightful enough that Nicholas Kristof must be upset that his colleague is upstaging him.

First, the laughable: Friedman says that mortgage problems and other structural issues in the US economy have the American people undermining the government's stimulus measures. That's right, according to Friedman the stimulus did not fail. No, it was the fault of the American people who undermined a perfectly good plan to stimulate the economy. Really? Why can't Friedman recognize that shoveling money to state and local government so that public workers can keep all of the high priced benefits is not the way to grow the economy? Why can't Friedman recognize that pushing hundreds of billions towards shovel ready jobs will not work when there are no shovel ready jobs in the first place? Why can't Friedman recognize that funding research into important issues like the sex lives of coeds at Syracuse University or the like will not grow the economy? The Stimulus failed because it relied upon the faulty belief that no matter how the government spent money it would grow the economy. That is just not true. There are a few places where government spending can cause growth, but these were very minor parts of the Obama stimulus.

Now the good part: Friedman does recognize the uncertainty over the future of taxes and regulatory matters is freezing a lot of the growth decisions needed in the USA. Of course, since this is Friedman in the New York Times, he does not bother to mention that Republicans have been talking about this for over a year with no response from Obama. Indeed, Obama has done all that he could to increase uncertainty. Think about the extension of the Bush tax rates. First, Obama denounces the concept of keeping rates unchanged and promotes a vague message of where the new rates should go. Then, at the very last minute, Obama agrees to keep rates unchanged for two years. Obama, however, waits for less than four months before he starts agitating for tax increases again. That's correct. Obama finally agrees to keep tax rates unchanged but almost immediately injects uncertainty back into the economy by pushing for increased taxes. It was a suicidal move.

Friedman also writes about the difficulties that government regulations are causing. Apparently, it is easier to get a building permit in Saudi Arabia and most other countries than here in the USA. Friedman notes that this hurts construction activity. The amazing thing is that Friedman writes about this like it is a great discovery. Where has he been? The GOP has been talking about cutting regulations for years. They managed to cut some over Democrat objections, but many more remain in place. Friedman acts like that battle has not been taking place.

The truth is that Friedman's recognition of reality is a positive. If we could only get Obama to open his eyes, there might actually be some progress on the economy.