Long-term growth is like a garden. You have to weed a garden; you don't just pile on fertilizer — stimulus — when it's full of weeds

Chicago Econ stalwart John Cochrane makes a hugely important point about what's happened to our economy over the past 5 years.  Read the whole interview here, really good on money, QE, bank regs, TBTF:

Long-term growth is like a garden. You have to weed a garden; you don't just pile on fertilizer — stimulus — when it's full of weeds. So let's count up the weeds. A vast federal bureaucracy is going to be running health care and has cartelized the market. Dodd-Frank is another vast federal bureaucracy, directing the financial brains in the country to compliance or lobbying. The alphabet soup of regulatory agencies is out there gumming up the works. Then there are social programs. The marginal tax rates that low-income people face, along with other disincentives to move or work, mean that many of them are never going to work again. When the economy was steaming ahead, this didn’t really cause much trouble, but now many recovery mechanisms have been turned off. If a Martian economist parachuted down, would he not be struck by the vast number of disincentives and wedges the government places between willing employer and employee? Would he or she really say "the one big wedge between you hiring someone to make something and sell it is the zero bound on nominal Treasury rates"? Finally, uncertainty is surely a part of it. Investing and hiring has some fixed, irreversible costs, and the chance that policy could be even worse gives people an incentive to delay.

This is all really hard to quantify, and it's time somebody did. Unfortunately, it's much easier to focus on "demand," or the zero bound, or fiscal stimulus — one big magic bullet, and not the thousands of weeds.