The schizophrenia of progressive economic thought was on full display last week in the wake of some bad economic news. On the one hand, progressives believe the U.S. economy is so fragile that even the mere threat of cuts in government spending would be disastrous. On the other hand, they believe this same economy is so resilient that billions upon billions of dollars in regulatory costs have no effect on growth at all.
Last Tuesday, The Conference Board — a private group that measures consumer confidence —announced that consumer confidence had plummeted in January. One day later, the Department of Commerce reported that the U.S. economy had actually contracted by 0.1 percent in the fourth quarter of 2012. Then on Friday, the Labor Department announced that the unemployment rate had ticked back up to 7.9 percent.
The establishment media and liberal politicians, including President Barack Obama, either downplayed the news or blamed phantom “spending cuts.” Hardly anyone brought up the dramatic increase in regulation over the last few years and the fear that President Obama’s re-election opens the door to a massive onslaught of red tape.
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