Apocalyptics; deregulate now View 20110818

View 688 Thursday, August 18, 2011

· Why new taxes are a bad idea

· How to restore prosperity

· Quality of Life: The Apocalyptics reconsidered

The Politics of Envy

Apparently I have not made myself clear: I have not been addressing Buffet’s contention that the rich aren’t paying their fair share. That is worth discussing, and perhaps he is right and perhaps not. There is considerable history on the politics of envy, and the gap between the very rich and the middle class, and the fairness of tax structures. Many authors have written on the subject and there is a rich store of discussion; but it is mostly irrelevant to the point I have been trying to make, which is that we should not raise taxes because we do not want the government to have the money.

If the government gets more tax money, it will spend it on keeping the exponential rate of government growth up where it is now – somewhere around 7% meaning that it doubles every 11.5 years. Not one of the Deficit Deals offered to cut government; at best there were offers to reduce the exponential from 7% to something less, perhaps 5%. Historically when there are tax increases coupled with “cuts” (inevitably cuts in growth, not actual cuts) the tax increases take effect immediately; the “cuts” take place later, and usually don’t happen at all, as it is discovered that the cut is too Draconian and would unduly burden someone.

The automatic exponential growth of government has to stop. If we allow it to grow at the present rate it will double in 12 years, and by then so many will depend on government that it will be nearly impossible to reverse the trend. Democracies fall when all men are paid for existing, and no man must pay for his sins – a trend we can see in every socialist state including the United States. We are already on that road.

What the United States needs is a reduction in the size of the Federal Government. An actual cut in the budget, that is, a budget that next year is actually smaller, say by 1%, than it was last year. If there are programs so important that they cannot be cut at all, let that be a separate legislative item to be justified on its merits, not as part of a general increase. We also need some actual cuts in the sense of dismantling programs that may or may not be desirable, but surely are not worth borrowing money to fund. Of course any such program will be portrayed as Draconian cuts to teachers, law enforcement, the poor, science, the environment, as if the nation were on the brink of Doom before the enormous expansion of government that began with Johnson’s Great Society; as if the Republic had not endured for 200 years before 1976; as if America were in desperate straits in1990 when the Cold War ended and we no longer needed to maintain an enormous Strategic Air Command, thousands of nuclear missiles on extreme ready alert, hundreds of young men and women in silos holding the keys of Armageddon. A return to the spending levels of the time when Clinton was President and Gingrich was Speaker would not mean ruin and destruction, starvation and floods of homeless.

Any such attempt will be portrayed as such, of course.

I outlined my proposal for what we ought to do now in a Republican Plan in a previous essay. This is a program for Republicans that could be trotted out now.

What else might we do?

We are in the Second Recession, or our Great Recession seems to be plunging toward a Second Depression. The situation is not yet desperate but it could get there.

Our big problem is restoring prosperity. The President will shortly propose his plan to create jobs. I don’t know what it will be but I can guess: it will be a massive stimulus program to pour billions of borrowed money into institutions like universities and schools that are already in bubble-funding land. There will also be grants and giveaways, direct presents to voters from the Obama Stash, and many appeals to raise taxes on the rich. All this will I give to you…

It hardly matters, since it will not be intended to be implemented. Its purpose will be to generate envy. See what you can have if you vote for us! And it will cost you nothing, for we will take it from those who are not paying their fair share. Never mind that what we take won’t come close to paying for what we are promising; never mind that the real purpose of any new taxes is to keep the exponential growth of government and government employees. All this would we have given to you had the Republicans not foiled us with their obstinacy. Turn them out.

The Obama Plan will be some variant on increased spending coupled with “fair share” taxes. If the stimulus strategy were going to work, one would have thought it would have worked by now: after all, the Democrats had supermajorities from January 2009 until January 2010, and in December 2010 they used that power to smash through ObamaCare. If they could pass that they could pass anything, including whatever stimulus they thought would bring about economic recovery in a year – say by August 2011.

In other words, that has been tried. You can’t lower interest rates much. If there are shovel ready jobs out there surely they have been commissioned. Nearly a trillion dollars was used to stimulate the economy, and the result has been long term unemployment and the rest. I don’t need to trot out the economic bad news.

So what might we do?

We might try economic freedom to bring about an American Economic Miracle.

Suspend most federal economic regulations: minimum wages; Americans with Disabilities Act; Various sex equality acts; environmental protection acts; all of them. If there are some that are absolutely necessary to the survival of the Republic – really long term irreparable damage to the Earth as opposed to temporary pollutions that are inconvenient or uncomfortable – they can be specifically addressed – not only the threatened damage but the actual threat that this will happen unless the Federal Government prevents it. Not just “reduce CO2” but “How much damage will suspending these carbon laws for five years cause? Be Specific.” And so forth.

The regulations are suspended until their importance is shown. By importance, it is with the understanding that we are broke. Should we borrow money to pay for this? It may be desirable, but can we afford it?

States may do as they choose here. If California wants to continue really stringent controls on motor vehicles, that’s California’s business, and if Texas wants to repeal some, that’s the business of Texans. The Federal Government suspends most regulations involving jobs and commerce, and those laws sunset if the need for them cannot be established.

My guess is that the consequent economic miracles will make it pretty clear which regulations were needed and which were not. As to the horrid economic damage we are doing, take account of what China and India and other places are doing. Look at what that costs us. Should we borrow money to cripple our economy while others are driving ahead? All that might have been fine when we were rich; but how much sense does it make when we are broke?

And Drill, Baby, Drill. Get the pipeline to Canada going. Encourage American refineries. Find oil and pump oil. Frack away.

On Quality of Life

One major argument for extensive federal regulations is that if we don’t prevent it, some action will release carcinogens into the environment; when we ask how much of what is to be released, we discover it is often trace amounts that were formerly undetectable before a recent development of new instrumentation. When we ask how much cancer is going to be caused, the numbers are generally vague, and often work out to a few hundred extra cases out of millions exposed over decades of time.

No one thinks cancer is a minor affair: but when it comes to misery, poverty for thousands now whose jobs were eliminated because their plant is to be closed because a new instrument has been invented is quite real and visible. Should such decisions automatically be made by Washington bureaucrats, or should the local people affected have a say in the matter? Who is better at determining effects on quality of life? At the moment the trend is toward trusting the experts and ignoring the locals actually affected. That may not be optimum.

If all this seems a bit vague, I suppose it is. Let it become specific; what I want is a renewal of the debate over principles.

For those interested in just what regulations do, and what relationship regulatory science has to real science, I recommend to you Edith Efrom The Apocalyptics, Cancer and the Big Lie (How environmental politics controls what we know about cancer). Published in 1984, it is still quite relevant (and of course denounced by the regulatory establishment as the work of a crazy woman.) You may be astounded by the effects of our “zero tolerance” laws on carcinogens even in 1984; most of that remains in 2011, but few notice.

Regulatory science is to science as rabbit hunters are to rabbits… And of course we continue to federally regulate the use of bunny rabbits in stage magic acts. We borrow a couple of million a year to pay for that. Are we getting our money’s worth? But in fact the stakes are a great deal higher, as toy makers and publishers of children’s books have recently found to their sorrow. Efrom’s book made a considerable stir in its day, but it was dealt with by being ignored, not refuted. It’s easier to tell the story of some victim than to look at what happened and examine probability of causal links.

Suspend regulations. Reconsider the whole principle of federal vs. state regulation, and re-justify the re-imposition of each regulation before it can become effective again. Look to cost of enforcement and the effect of the regulation on the economy. If we can’t afford it now, put it back in the hopper for reconsideration later.

And find ways to bring energy prices down.

The alternative is our continued decline: as of now there is more money owed for student loans than on credit cards; the entire middle class is now in bondage. The government has a monopoly on student loans, and you cannot be relieved of them by bankruptcy. They can garnish wages and seize pensions. That is the end of the independence of the middle class. And we continue toward exponential growth in spending. That means more money for universities. They use this to expand and grow – and charge more. They’ll help you get a loan.  A nation of bondsmen.

Salve sclave.