This is the Cato Daily Podcast for Monday, December 3rd, 2012.

I'm Caleb Brown. The fiscal cliff is coming in its very existence as a probable scenario creates uncertainty destructive to our

economy. So says Michael Munger, professor of economics and political science at

Duke University, we spoke last week.

What do you think is the most important element that is missing from the discussion

about this fiscal cliff, these rising tax rates and so-called spending cuts.

They're actually quite meager, but what is the most important element missing

from the debate? Well I think of the hypocrisy of both parties in Congress is what I find

astonishing. The reason that we're having economic problems is not that we're

not sure what spending is going to be or what taxes are. It's uncertainty.

So the problem that business people have is they're not sure what tax rates are going to be

operating under. They're not sure what government programs are going to

continue. They're not they don't know if if you're a defense contractor you're not

sure if that contract is going to extend into the future you're not going to hire

anybody. So we need to pick something and settle on it. The problem is that

politicians and I guess you can't blame them in a way you can't blame a dog

reading out of the garbage these are the incentives that we create. In order to get

reelected you need to be crucial. And so the simplest example I can think of is the

minimum wage. Why don't we just index the minimum wage? Apparently there's some

agreement. We need a minimum wage. We don't

index it. That way every three, four, five years one side can say we're going to

come to you and save the minimum wage. We're going to raise it. And the other side can say,

...