John Roberts, Conservative Outcast--and Political and Moral Actor
Marco Arment: Empty Rewrite Bingo

If It Was Uncertainty About Health Care Financing That Was Holding Back the Economy…

…the stock market should have jumped last Thursday when ObamaCare was ruled constitutional. If it was fear of ObamaCare, then the stock market should have fallen.

It did neither. Austan Goolsbee:

Austan Goolsbee: The Markets Did Not React When ObamaCare Was Declared Constitutional: Of all the public reactions to last Thursday's surprise ruling from the Supreme Court on the Affordable Care Act, one of the most interesting came from the markets: Nothing happened. That probably disappointed those who spent the past two years saying that the costs from increased regulation and fear of the health plan explain why U.S. companies have not hired faster and have accumulated huge amounts of cash on their balance sheets. If that were so, the court ruling should have had a big impact on expected future profits. Stocks should have tumbled. They didn't, and the markets' collective yawn was the latest piece of evidence refuting the notion that the health plan and other regulations are the main problems facing the economy….

What about the companies that have hoarded so much cash? It turns out that the hoarding began years before the Obama administration even took office…. Cash hoarding also pervades the rest of the developed world—in countries that have not undergone regulatory changes or passed new health plans. As a share of the economy, the cash holdings of companies in the healthiest European countries are actually 15% to 30% higher than they are here. Clearly, U.S. policy has not driven that.

Perhaps we shouldn't really be surprised that regulatory trends can't explain macroeconomic performance. They haven't for decades. Surveys showed that business people were even more dissatisfied with President Clinton's perceived regulatory overreach than they are with President Obama's today. Yet our economy grew rapidly during the 1990s. President George W. Bush aggressively deregulated throughout the economy, yet growth in the 2000s was modest (and followed by financial crisis). Now, under Mr. Obama's policies, the private sector has added close to a million more jobs than during Mr. Bush's first term….

[D]ata do show fear and uncertainty and companies unwilling to make long-term investments. But that fear is not predominantly about U.S. regulation. It is rooted in the dangers of further financial crisis and of not having enough customers. It is a fear that hangs over most of the developed world….

[L]et's agree with the market's judgment: Health-care reform and regulations are not the reason for the economy's slow recovery.