Law for the GOP to pass: Get the government out of the economy

“If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself.”—James Madison Federalist No. 51

Read the above.  It makes clear that people are not perfect.  That the system needs to be made so as to encourage the best and keep the worst down, because if we could expect people to always be at their best we wouldn’t need government.  So when people do bad things, yes, they are to be blamed, but when they do bad things because the government set up a system that ENCOURAGED that bad behavior then first and foremost it is the government to be blamed for making the game one where bad behavior is rewarded.

Which is why these Occupy Wall Street people are such idiots.

Besides  apparently having a large portion of anti-semites in their midst  the Occupy Wall Street people and all their fellow whiners in other cities seem to be complaining about the wrong things.  They complain that the cost of college is too high…ignoring that it was government interference with college tuition that led to high prices.  They complain about bailouts…yeah, thanks for being a couple of years late, the Tea Party already has been bitching about that one for some time now.  Of course the Tea Party realizes that it is the fault of the government for giving out the money that is primarily to blame and not the banks for taking the money (not that the banks and corporations are without blame).  But the government is the one that is primarily to blame.  When you set up a system that can choose winners and losers (which any system with loopholes, regulations that serve one industry or company over their competitors, useless laws and tariffs that keep competitions from sprouting up, give loans to people) you’re going to have the companies this affects try and work the system to their advantage.  Businesses are in the business of making money.  If a government doesn’t get involved in picking winners and losers then the only way to make money is by making a superior product with superior customer service and a great marketing campaign.  That’s hard.  Bribing politicians through campaign cash to work the rules in your favor is so much easier.   It’s not the ethical choice, it’s not the long-term thinking choice, it’s not even a good choice…but it’s the choice that most people will make.  If you set up a system that makes it easier for people to give into their worst inclinations, don’t be surprised when they do. Thus government needs to set up a system where it makes more sense to worry about product, service and marketing than on which candidates to back.

If we had the right system, one where it wasn’t in the best short term economic interests of businessmen, then they would just have to focus on their business.  (Yes I would prefer it if they acted in a long term economic way directed by ethics…but you know I’m dealing with humans, humans don’t always do what’s right, thus we need a system that encourages the best in us and does not give opportunities for the worst in us).  So how do we get that system?

No loans.

Loans to banks and corporations.  Or bailouts…a government loan by any other name would smell just a rancid.  These need to stop.  All of them.  Without question, without exception.

While Bush and Obama weren’t the first to use them, they are the most recent and most egregious examples.  Let’s look at that waste of legislation called TARP.  That worthless half brain Bush would whine “but it would have destroyed the entire financial system.”  This is one of the two reasons Bush was a moron (the other being that he had no plan for the occupation of Afghanistan and Iraq).  No it wouldn’t have.  What would have happened was that one bank would have collapsed.  Immediately everything that Bank owned would have been up for sale at fire sale prices.  All of that bank’s competitors would have been buying up notes on loans for a tenth of the price of the loan from the bank that collapsed.  Let’s remember that all the banks were forced to take money not because they all needed it, but to hide which banks were unstable.  Most of the banks were stable and would have been able to buy those notes.

So what?  Well if a bank bought the note on a loan for a house that sold for $200,000, the house would probably have been worth only $120,000 after the crash, but as the new bank got the note for probably somewhere around $60,000 they can work with the homeowner and probably re-fi the cost of loan down to something more reflective of its current value and hey they still make a profit.  So suddenly the loam market is more stable and the remaining banks are probably on more solid ground.

Does this happen overnight?  Nope.  There would probably be a couple of down years, maybe even three, but by the end of the third year (about now) the recession would be clearly over.

But we didn’t do that.  We chose winners and losers and decided, like a bad elementary school teacher, everybody was going to be winner!  Everybody gets gold stars!  What does that invisible hand know anyway?  It’s not like bad businesses with bad business practices should go the way of the Dodo.  No let’s keep the bad businesses around, because despite all the time during their fall into instability they never had the good sense to change their policies and do something intelligent, well that doesn’t mean they won’t be good now that we just rewarded them for bad behavior.  No I’m sure they’ll be a much better business now.  Uh-huh.

But, sadly, next to Obama, Bush is a Rhodes Scholar.  No let’s give out even more money.  Let’s continue picking the winner we want to win, not the winners who can make things like a profit or things people want.  No.  Let’s give a shitload of money to a company that builds solar cells for $6 apiece and sells them for $3 apiece.  I’m sure that business model will work wonders.  Let’s face it, yes Bush was a moron for thinking the financial system couldn’t handle the collapse of a major bank…but Obama giving out money to his cronies thinking it will help the economy was both immoral and somewhere far beyond just stupid.

And let’s not forget that with loans comes the same problem as we saw with college loans.  It ruins the nature of prices.  Costs for the consumer go up, profits go down, quality gets screwed and everybody winds up getting the short end of the stick.

The market (the collective whole of billions of economic choices) knows far more than any government planning ever can.  All you need to do is look at how well the Soviet system worked for both Russia and the satellite nations or at China right now which has built massive city expansions that no one lives in, they provide no economic growth, and show that if we can just keep avoiding shooting ourselves in the foot China will go the way of the Soviets and we won’t have to worry about their economic superpower.  If you need more proof see Thomas Sowell’s Knowledge and Decisions.  Central planning never has and never can work.  It will always make the wrong choice; it will always screw up the system.

And as long as the government is giving out money, it will inevitably go to those who buy influence.  Is that wrong?  Of course!  But the government is the one who set up the game.  It may be unethical, but you can’t seriously expect human beings to act against their own interests when there is a way they can make money.  Human beings at both the top and bottom, and every slice in between, have people who are unethical.  That’s why we have government because we’re not all saints.  If you have a system that gives out money it will always go to those who pay for it.

So let’s stop giving money!

No tariffs

I hate taxes in general, but I hate few as much as I do tariffs.  Tariffs are put in to help American businesses when they don’t want to compete with foreign goods that are made better and cheaper.  You know, those things as a consumer you want.  So do businesses make better products themselves?  Nope.  They contribute to campaigns and get politicians to tax their competitors so they don’t have to make a better product.  If we didn’t have tariffs, Government Motors would have collapsed decades ago as it should.  (There is probably nothing more un-American than GM, a company that has used tariffs to avoid competition, given into the bully tactics of unions and taken government money rather than gracefully die.  With the exception of GE there is probably no company I can think of so opposed to capitalism).

Again this is a power of government being used to help those who can afford to buy it to the detriment of the public.  Yes, it’s done by rich people and they can all go to hell for their unethical behavior…but if government didn’t play this game, then businessmen would have no choice but to make better, cheaper products.

No subsidies and a flat tax with no loopholes.

Again, I think it was conservatives who have been beating the drum for years about how we need to do a flat tax without loopholes.  Why do we want flat taxes and to lower the tax rate…well because taxes are too high but the only people not paying them are the ones who can to pay off politicians.

I’d prefer to go to a completely sales tax model, but short of that I would take a completely flat tax, and short of that I’ll take Paul Ryan’s lower taxes (because high taxes are killing everyone) with no loopholes (so the people who aren’t paying taxes, like Obama’s cronies Warren Buffet and GE will finally actually pay something).  Any of those three systems would be better than the current system where you can buy your loophole and screw the small and medium sized businesses.

No control of anything that doesn’t cross state lines.

The federal government has better things to worry about right now than whether or not the Amish are selling unpasteurized milk.  While I would prefer a constitutional Amendment clarifying that the commerce clause only covers commerce that actually does cross state lines, for right now I will settle for that as a simple law.  States can run their own business without the interference of the Feds.  Federal oversight of commerce only helps to over-regulate, over tax, over burden and destroy business of all sizes (except you know if you can buy the right legislation in your favor).  If the federal government would get out of ALL intrastate commerce you find a sudden and massive jump in economies of 49 out of 50 states (California is beyond saving, mainly due to over taxation, over regulation and too much control of the economy).

The 17th Amendment…

…is perhaps one of the dumbest ideas in history.  Yes, let’s take Senators who are appointed by state legislators and make them publically elected.  So now they’re beholden to the whims of the mob and wants of campaign contributors.  I’m sure that will always make for better government when we stop choosing who is best and go for who is popular.  Repeal this joke of an Amendment and replace it with a hard and fast states can only appoint Senators via the collaboration of legislators and governors (no public election whatsoever).  And to keep them in check give the people the right to recall.

Sunset dates on all regulations with Congressional Oversight.

Here’s a radical idea.  Make every regulation that comes out of the executive branch, be it executive orders or just policy by the different departments open to Senate Veto.  And in addition to that make every single one of those regulations come with a 5 year sunset date.  It would not be in most corporations’ best interests to keep pushing for regulations every few years, it would just be too expensive—making better products would finally be cheaper by comparison.  Further this would get a lot of useless regulations off the books.

In short—GET THE GOVERNMENT OUT OF THE ECONOMY.  As long as it is in the economy, people will want to buy government power to exploit it to their own ends, and they will succeed.  If you want honest government and honest business then you need to eliminate the power of the one to so heavily influence the other.  If government can’t interfere with the economy and provide free cash, err, I mean corporate welfare, err, I mean bailouts and loans and can’t regulate your competitors out of business then there is no point in getting involved.  If you get the government out to the economy business will for the most part have no choice but to worry about business and the products and services they sell.  Businesses behave badly because the government provides an incentive to do so, take away the incentive and most of the behavior will follow.

Yes government has certain responsibilities and duties in a free market.  We crossed that line almost a hundred years ago and it’s not even visible anymore.  When you have no loan, no tariffs, a book or regulations that doesn’t take up an entire stadium and the government not looking into every legal act of commerce as if it’s a crime against humanity we can talk about where the line should be, but right now we’re so far off that it’s not even a pertinent discussion.

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Filed under Atlas Shrugged, Budget, Capitalism, China, Civil Liberties, Congress, Conservative, Constitution, Corporate Welfare, Debt, Economics, Evils of Liberalism, Government is corrupt, Government is useless, Individualism, Laws the GOP should pass, Long Term Thinking, Natural Rights, Obama, Occupy Wall Street, politics, Taxes, Tea Party, Tyranny, Unions, Unjust legislation, Welfare

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