Proper Domestic Policy

Mathew Yglesias provides guidance on how the Democrats should approach economic issues.
"The real lesson of the Clinton era isn't that Democratic policies made the economy boom, but that these policies -- higher taxes on the wealthy, higher spending on the poor, more regulation to protect labor and the environment, a higher minimum wage, and a budget aimed at sustaining Social Security for the long-term -- were perfectly compatible with the longest economic expansion of American history. Conversely, nothing Bush has done or is proposing -- tax cuts for the wealthy piled upon tax cuts for the wealthy, and giveaway after giveaway to corporate lobbyists -- is either necessary or sufficient to bring about economic growth. Taken to extremes, interventions could do real harm: A $70 per hour minimum wage or a total ban on burning coal would shut the economy down, but this isn't what we're talking about. The minimum wage has been much higher in real terms in the past and the economy grew steadily, while we were enforcing clean air standards properly just a few years ago with no visible ill-effects."

The economy has and always will do its own thing. However a rational administration should fit its policies into the economic reality rather than ignore it completely.