David M. Primo is a senior scholar at the Mercatus Center at George Mason University and an associate professor of political science and business administration at the University of Rochester.
President Obama plans to use Tuesday night's State of the Union address to lay out a "blueprint for an economy that's built to last," and he'll no doubt spend some of his time maligning the so-called gridlock in Washington. There are two faulty premises at work here, yet I predict that these assumptions will go relatively unchallenged in coverage of the speech.
Premise one is that the federal government can improve the economy by waving a magic policy wand—create a jobs program here, an infrastructure program there, and abracadabra, recovery! A common misconception is that all presidents, not just President Obama, have the ability to direct the economy as if it is a ship. The reality is far different. The economy is enormously complex, and government intervention may do more harm than good. The most important role for the federal government is to maintain an effective rule of law and policy stability so that businesses can plan for the future. Instead of trying to micromanage the direction of the economy, the president should instead focus on what he (and Congress) can control: burdensome and ever-changing regulations, and the coming crisis in entitlements.
Premise two is that gridlock is necessarily a bad thing. A natural implication of this premise is that more activity out of Washington must be a good thing. But is this really true? Policy change is only positive—and gridlock is only negative—if the reform improves on current policy. Judging from the new government programs and complicated new regulations coming out of Washington in the past decade, perhaps what we need is more gridlock in some areas (new government programs and regulations) and less in others (long-term, sustainable entitlement reform).