When these economic fundamentals are weaker, bad policies have larger adverse effects. For Lindsey, this is a reason for optimism. As long-term growth falters, he argues, public opinion will be more likely to scrutinize anti-growth policies and demand change. After all, the reforms of the Thatcher and Reagan years – and the wave of deregulation started during the Carter administration – were to a large extent results of the underwhelming economic performance of the 1970s.
Yet, five years since the global financial crisis, there seems to be little popular demand for pro-market reforms on either side of the Atlantic. So little, in fact, that it almost seems that Western populations have become accustomed to stagnation in incomes and high unemployment rates. We can only hope that "muddling through" has not yet become accepted as the highest virtue of economic policy.
Dalibor Rohac is a policy analyst at the Center for Global Liberty and Prosperity at the Cato Institute. He tweets at @daliborrohac.