Jack, sure I can point to some data. It's a few years old, but the IRS migration data shows that over 5,500 more taxpayer businesses left maryland than moved to the state. A few local papers did surveys and a commonly cited reason was the compliance cost and regulation atmosphere. All of these costs discourge growth activities, such as capital investments, hiring more employees, or raising wages to attract better talent.
But where's the evidence that any of that is having a negative impact on employment or wages? Again, Maryland is doing spectacularly well by those measures. Maybe other states should adopt Maryland's approach.
Additionally, you can look at other sources like the doing business index by the world bank, the business freedom index, and that author I previously mentioned. A decreasing regulation score correlates with greater GDP.
Is the claim that we should try to improve our business freedom index, and that will lead to higher GDP and raise wages? I can't comment specifically on the method, but I'm skeptical--the reason being that advanced economies have vastly different sets of policies, but similar long-term growth rates. If it were true that you could add even, say, half a percent of annual GDP growth by drastically reducing regs, what we'd see is the countries that do that would lap the field. The problem is that you need both supply and demand. You can't drive ever-faster growth by making it easier to supply goods and services because you need people to want to pay money for those goods and services (and, conversely, you can't drive ever-faster growth by maximizing demand because eventually the economy won't be able to produce everything that people are willing to spend money on).
I'm still thinking about your comment about inflation and unemployment. I thought it was a theory that they are inversely related, and that theory doesn't explain situations with both rising inflation and unemployment, like the 1970s. Less unemployment does not always push up wages and thus inflation, right?
They can both rise if supply is constrained.
Let's say we live on an island and fruit picking is the only economic activity. You can have high unemployment because it only takes so many people to produce all the fruit that people want to/are able to buy or you can have high unemployment because there are only so many fruits to pick, and they're all being picked. If it's the first one, there is no upward pressure on prices (and, in fact, there would be downward pressure on prices). If it's the second one--a supply shortage--since the fruit companies can't produce enough fruit to meet demand, the price of fruits would start rising.
What I'm saying is that what it looks like is that our situation is like the first one. Fruits are rotting uneaten. What we want to do is encourage more fruit buying (especially focusing on people who might want more fruit but can't afford it) or just have the gov't directly buy fruit. Your solution is basically making it easier to plant the trees. That's great for the second situation, but there are no signs that that's what our current one is. Like you said, in the '70s, with the energy crisis, that was the case. We needed more fruit trees. Today, things are actually going pretty well, but we could still use some more people being able and willing to buy more fruit.
