Time to pay down the uncertainty principal.

• Author: Hood, John
• Position: FREE&CLEAR - Column

As I write this, I don't know who is going to win the presidential or gubernatorial elections. But one thing is for sure--the winners better fix the political uncertainty plaguing government before it wrecks the economy again.

Not everyone thinks the issue is important. Some politicians and pundits have dismissed recent concerns about policy uncertainty as nothing more than Republican partisans attacking the Obama administration's tax, regulatory and health-care policies. They are mistaken. It's more than a talking point, and it didn't start with the election of Barack Obama.

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The movement away from the predictable began under George W. Bush. In response to the "dot-bomb" recession it inherited from the Clinton years, the Bush team proposed one-time tax rebates followed later by tax-rate reductions with expiration dates some thought would be enforced. Others weren't so sure. Neither enabled long-term planning by house-holds and businesses. The Federal Reserve System contributed by keeping interest rates artificially low from 2002 to 2005, which helped inflate the housing bubble. When it popped, the Bush administration and the Fed turned uncertainty into chaos by bailing out some financial institutions and letting others fail.

All this happened before Obama took office in 2009. Unfortunately, his agenda introduced more uncertainty. His stimulus package was hastily constructed and aimed entirely at manipulating consumption in the short run instead of incentivizing investment for the long run. The Dodd-Frank financial-regulatory bill he signed into law in 2010 created new rules and bureaucracies with unknown costs and unpredictable effects on finance, insurance and other industries. Obama's health-care legislation, rammed through Congress without popular support, set up a series of complicated decisions for families and businesses. Those decisions had to be made without knowing which parts of the legislation would survive judicial review, which parts would be implemented by states and which parts would prove impractical to enforce by the scheduled deadline of 2014.

My health insurer, Des Moines, Iowa-based Principal Financial Group Inc., gave up trying to figure this out and exited the business in late 2010. (So much for the promise that if I liked my health plan I'd get to keep it.) Many companies continue to run the numbers on the "pay or play" aspect of Obamacare--whether to purchase expensive, Washington-approved...