By JOHN B. TAYLOR

As this election year begins, a lot of people are wondering what we can do to restore America’s prosperity and create more jobs. Republican presidential candidates are offering their ideas, and at his State of the Union message on Tuesday President Obama presented his. I believe the fundamental answer is simple: Government policies must adhere more closely to the principles of economic freedom upon which the country was founded.

At their most basic level, these principles are that families, individuals and entrepreneurs must be free to decide what to produce, what to consume, what to buy and sell, and how to help others. Their decisions are to be made within a predictable government policy framework based on the rule of law, with strong incentives derived from the market system, and with a clearly limited role for government.

The bad news is that “policy error” are the saddest words in the language. These words, starting in the 1960s, came to dominate serious post mortems on the Great Depression of the 1930s, which blighted so many lives.

Which brings us to President Obama. Has a president ever arrived freer to choose his own course, to devise his own response to the economic crisis that greeted him in office? Candidate Obama landed with no explicit ideological commitments (at least that he cared to share). He was an icon of something else altogether, and his followers were ready to follow wherever he led.

Alas, a few days before his all-but-certain election, he glibly telegraphed what would prove the seminal mistake of his administration, telling Time magazine’s Joe Klein that, right after fixing the financial crisis, “a new energy economy . . . That’s going to be my No. 1 priority when I get into office.”

The financial crisis would not be fixed, but Mr. Obama decided our sagging economy would just have to endure fights over the big ideas he was so determined to implement anyway, including health care, re-empowering labor, redressing income inequality, etc.

Bill Clinton ascended to the White House as a New Democrat, wisely repudiating what had been a quarter-century of big-government liberalism and embracing instead welfare reform, deficit reduction, spending restraint, a strong and noninflationary dollar, and free trade. One might thus expect “Back to Work” to be a sharp condemnation of Nancy Pelosi, Harry Reid and, of course, Barack Obama for their abandonment of his centrist policies. After all, today’s Democratic Party—in the wake of the 2006 elections (which elevated Ms. Pelosi to speaker of the House and Mr. Reid to Senate majority leader) and Mr. Obama’s victory in 2008—has run up the national debt to once-unthinkable levels: $4 trillion now, with $10 trillion to come over the next decade. The federal budget has swollen by nearly $1 trillion in five years, or twice as much as spending rose during Mr. Clinton’s eight years in office.

But instead of offering Democrats a road map for a return to the center, “Back to Work” is an ode to big government. It is also a screed against Republican “antigovernment ideologues”—e.g., Ronald Reagan, George W. Bush, John Boehner and Mitch McConnell—who are of course responsible for every problem in the country. It was, Mr. Clinton says, the Republicans’ “thirty-year-old antigovernment philosophy that got us into this crisis.”

Such a broad claim requires—how to put it?—an imaginative approach to history. “After World War II,” Mr. Clinton writes, “until 1981, government policies helped us build the world’s greatest middle class.” Right, everything in America was going great until the voters foolishly elected Ronald Reagan president. In truth, the 1970s were a calamity for American families. One of the biggest three-year declines in real middle-class incomes in the second half of the 20th century came during the stagflation of Jimmy Carter’s presidency. The middle class made healthy income gains in the 1980s under Reagan, which helps explain why he was re-elected in a landslide. (more…)

Had the U.S. economy recovered from the current recession the way it bounced back from the other 10 recessions since World War II, our per-capita gross domestic product (GDP) would be $3,553 higher than it is today, and 11.9 million more Americans would be employed.

Those startling figures are based on the average recovery rate of real GDP and jobs three years after the beginning of each postwar recession. Some apologists suggest that the current recovery is so weak because the recession was so deep. But the totality of our experience in the postwar period is exactly the opposite—the bigger the bust, the bigger the boom that follows.

On average, three years after the four deepest previous recessions started, real GDP was 7.6% higher than the pre-recession level. During the Obama recovery, real GDP is up only 0.1%. Forty months after the start of the 1953, 1957, 1973 and 1981 recessions, total employment was on average 4.7% higher than the pre-recession peaks, while total employment today is still down 4.7%—that’s a total employment gap of 13.9 million jobs.

The problem is not just the weak recovery but increasing evidence that the economy is now on a growth path far different from the previous quarter century. Despite the largest monetary and fiscal stimuli in American history, in 2009 the capital stock of the nation actually shrank for the first time in the postwar period. Our current economic underperformance seems so likely to continue that many economists and pundits have difficulty visualizing an America of tomorrow that looks like the America of the past half-century.

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For more than three and a half decades the world’s most famous peanut farmer has toiled to get the island’s repressive military dictatorship more respect from the U.S. This trip was no different. Agence France Press reported that it was undertaken at “Havana’s invitation” and “aimed at improving U.S.-Cuba relations.” Fidel praised Mr. Carter as “brave and serious.”

It is obvious why the dictatorship sought out Mr. Carter. The list of individuals—no fair counting Mahmoud Ahmadinejad, Kim Jong Il or Chris Dodd—who are willing to lend legitimacy to one of the 20th century’s most disastrous revolutionary experiments is shrinking fast. The former president is, as they say, useful.

We may never know why Mr. Carter agreed to be used. But we do know how he was used: On Wednesday, before he left Havana he went on Cuban television to argue for the release of the five Cuban spies known as “the wasp network,” who are now serving time in U.S. prisons.

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