How to Weaken an Economy
But don’t despair: there are plenty of ways to slow down even an inherently strong economy. History offers plenty of examples. But as more contemporary models, take your pick of successfully ruined economies -- the Venezuelan, the Cuban, the North Korean, the Greek, the Italian, the Portuguese, or pretty much any from Mediterranean Africa to the Cape of Good Hope. There are certain commonalities about why and how they fail. Let’s review some of them.
The state can never be too big. Ensure that it is unaccountable and intrusive, in constant need of more money and more targets to regulate. The more government, the more people are shielded from the capital-creating, free-market system. Think the DMV or TSA, not Apple. The point is for an employee to spend each labor hour with less oversight, while regulating or hampering profit-making, rather than competing with like kind to create material wealth. Regulatory bodies are a two-fer: the more federal, union employees, the more regulations to hamper the private sector. The more federal mandates, like new health-care requirements and financial reporting, the less employers profit and the fewer employees they can hire. Washington should be a growth city, absolutely immune from the downturn elsewhere, a sort of huge and growing octopus head with decaying tentacles. State jobs should be redefined as something partisan -- whose expansion is noble and helps the helpless, and whose contraction is evil and the design of a bitter and aging white private-sector class.
On the other end of the equation, ensuring 50 million on food stamps, putting over 80,000 a month on Social Security disability insurance, and extending unemployment insurance to tens of millions all remind the jobless that life is not too bad (thanks to the government), and certainly a lot better than working at a “low-paid” job that equates to giving up federal support. To paraphrase Paul Krugman, the more and the longer the jobless receive, the less likely they are to take chances looking for a job. That too might be again a good thing if you wish to slow down the economy. In general, even Arnold Toynbee, a man of the Left, acknowledged that the greedy drive of the scrambling private sector was not as pernicious to civilizations as the collective ennui produced by vast cadres of lethargic and unaccountable public “servants” doing supposedly noble work.
To ensure capriciousness and unpredictability for both suspect employers and investors, make the law malleable, even unpredictable from day to day, in the style of an Argentina or Venezuela. Redefine the law as what is deemed socially useful. For federally subsidized bankrupt auto companies, creditors should be paid back on the basis not of contractual law, but of nobility -- why borrow to give a rich man a return on his superfluous investment, when a retired auto worker might have to pay a higher health care premium? Boeing wants to open a non-union plant in South Carolina? Have the NLRB try to stop it (and illegally staff the NLRB with recess appointments). Illegal aliens? They are neither illegal nor aliens, as federal immigration law is itself a capricious construct. Does the Senate really have to present a budget? Do presidents need to meet budget deadlines? Who said there is a Defense of Marriage Act?
What law says that gays cannot serve overtly in the military or women cannot fight at the front -- some reactionary construct? The point is to restore a simulacrum of popular sovereignty: the law is what 51% of the people are perceived by technocrats to want on any given day. I would hammer away at legal fictions like the very idea of borrowing and paying back loans and debts. Soon the popular culture would respond in kind, and run ads constantly on radio, TV, and the Internet in a way rare just a generation ago: how to renegotiate IRS debt, how to renegotiate mortgages, how to renegotiate credit card debt, and how to renegotiate student loan debt.
The man who owes $50,000 has been taken advantage of; the man who is owed $50,000 already has enough without being paid back. The aim is to create a general climate where when one borrows, one does not necessarily have to the pay back the full sum for a variety of legitimate considerations. The more bubbles -- housing, student loan, credit card -- the more avenues for government intervention and relief. Do all that and perhaps lending itself might slow down, again not a bad thing for our purposes. The debtor, not the lender, is the true American success, as our collective debt underscores.
Article printed from Works and Days: https://pjmedia.com/victordavishanson
URL to article: https://pjmedia.com/victordavishanson/how-to-weaken-an-economy