Why the conservative obsession with finding the next Apple won't help the economy

The conservative obsession with finding the next Apple won't solve inequality

(Image credit: (REUTERS/Adrees Latif))

Is the key to economic growth keeping taxes low on savings and investment? That's what James Pethokoukis argued here at The Week, when he took issue with the capital gains tax hikes President Obama plans to use to pay for a new middle class tax relief package — tax hikes that will fall almost exclusively on the wealthiest Americans.

In recent decades, America's economic growth has slowed to 2 percent a year versus the more robust 3 percent it tended to see mid-century. According to Pethokoukis, Obama's tax hike will make business expansion, and especially entrepreneurial creation — the next Apple or Google or what have you — all the harder. Pethokoukis also took a swipe at "middle-out economics," the mantra that's gaining ground in progressive economic circles, which blames sluggish economic growth on rising inequality and the way it degrades Americans' ability to spend. "America doesn't need more ‘buying power' stimulus as much as it needs a higher growth potential," Pethokoukis concluded.

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Jeff Spross

Jeff Spross was the economics and business correspondent at TheWeek.com. He was previously a reporter at ThinkProgress.