Looks like a Power Point presentation, of all things, has lured the mighty Atrios out of his cave. Evidently you can take the boy out of the economics dept., but etc. etc. I haven't read Reed Hundt's book, which should probably disqualify me from posting this, so go ahead and sue me. But on the strength of the slides and the posts, I have to say that he sounds excited but confused.

What's off-putting straight-away is all this breathlessness about entrepreneurship. It's great politics and perhaps necessary protective coloration for Democrats, but less convincing on the merits.

The truth is, economists don't much agree on what explains economic growth. Beyond the inputs of labor and capital (the latter measured on a flaky basis) is the great unexplained "residual," what Nobel economist Robert Solow famously described as "the measure of our ignorance."

The culture theory does not explain the fabulous nineties. It's a pretty weak culture that only emerges for such a relatively brief period. Most economists ascribe the tight labor markets that generated superior wage growth to some weighted combination of the following factors:

Greenspan's willingness to let the stock market bubble inflate, which was associated with an investment boom, overbuilding in some sectors, followed by a bust and a recession;

Clinton's tax increases combined with Federal spending restraint (due to political gridlock), leading to low interest rates and budget surpluses, both of which encourage investment and consumption of consumer durables.

Under all this I smell a renewed sales pitch for Clintonomics. Free trade, budget surpluses, privatization, welfare "reform," leave the Fed be, era of big Gov is over, yadda yadda yadda. Clinton people put a lot of weight on the second factor above, which logically clashes with the entrepreneur fable for those few paying close attention.

The progressive, economically incorrect explanation for the fabulous 90s, such as they were, can be found in Bob Pollin's book, among other places. (The current recovery can be ascribed to a housing bubble, itself starting to noticeably deflate, with more fun to follow.)

A safer method than the 90s policy mix of monetary ease and blowing bubbles would be monetary ease and Federal deficits of about three percent of GDP, with the latter financing infrastructure, urban renewal, and public employment. Free broadband would be cool too. Do those things, and entrepreneurs will emerge and find interesting things to offer.

I stand with Duncan in my reaction to the China fixation. It's weird. And it clashes with the free trade/market liberalization theme, since it is precisely free trade dogma that facilitates export of good U.S. jobs to China and elsewhere. To be sure, China is growing like crazy, but it also has some serious internal problems, and its growth carries the seeds of additional problems in the future.