The Cure has been Worse

On March 23, 2020, President Trump tweeted: “WE CANNOT LET THE CURE BE WORSE THAN THE PROBLEM ITSELF,"

Based on what I'm seeing, that is exactly what has happened.

In my home state of Maryland, significant sectors of business remain closed ... barred from serving customers by the state. 

The media has turned into a giant propaganda machine: extolling "social distancing" at every opportunity. Showing how wonderful it is. 

It is exactly what happened in the novel 1984. The televisions, the radio stations, the commercials, the social media. Everyone talks about their gatherings, and seems compelled to remind everyone that they are "social distancing". As if to say, Don't scold me! Look, I'm social distancing! 

It is nauseating.

The virtue signaling

The attempt at shaming.

Choosing to make life harder for young workers

Karl Smith is the Assistant Professor of Public Economics at UNC-Charlotte, and he has studied retail employment over the past 20+ years. Given that retail sales have, in real dollars, risen nearly 40% since 1990, he posits that retail employment of teenagers (age 16-19) should be higher than it is.

In his article, What the 'End of Retail' Means for Young Workers, Dr. Smith ignores the fac that the minimum wage has gone up over that same period. Young people first entering the workforce are the least productive and least valuable workers in the world. Yet, the government has made it more and more expensive to hire them. Hiring less of them is a perfectly rational and predictable response by retailers.

The fastest way to get young people int the workforce and contributing to society is to eliminate the minimum wage. But the unions won't allow that to happen.

Temporary tax policies never work

I'd like to focus on one small part of the President's big address from Thursday... this notion of a Payroll Tax Holiday. On Friday, Sen. Paul Ryan had this to say on CNBC :

"The payroll tax cut that, to me, is not a bad idea. It's always good to let people keep more of their own money," Ryan said. "But it's no substitute for fundamental tax reform--for certainty. It's temporary stuff.

"See, what we've learned already from the Keynesian playbook is demand side spending stimulus, temporary tax rebates, which were tried in the Bush administration and didn't work, and this administration--all this stimulus hasn't worked."

This has nothing to do with which party has the majority in Congress, or whether it's a conservative or a liberal in the White House. The bottom line is that temporary fiscal measures never work. The Bush administration tried them. And the Obama administration has tried them. They don't work. Stop doing it!

They might have worked when information moved slowly. But not any more. Decision makers in business look at all of the available information before making a choice. And if that choice involves hiring another employee, their planning horizon is at least three years. An ethical business owner ... and most are highly ethical ... will not make the implied promise of a livelihood to a new employee unless he is confident that he will still be part of the company three years from now. Otherwise, it's better to simply hire a contractor.

Giving money away is not spending

It is no mystery why the stimulus has failed to reverse the course of unemployment. Much of those 'expenditures' were actually transfer payments ... money taken from one group of citizens and given to other groups of citizens. In so doing, our government has intentionally taken resources away from those are productive and transferred them to those who are unproductive.

It has been over a full year since the stimulus became law, and it is, in fact, highly logical that our economy is worse than before the stimulus. Unemployment is higher - as is the unemployment rate - because business owners have less money to hire new workers, expand their business or to purchase additional goods and services. They would have more money, except that it's been taken from them and given to folks that are not in a position to ... hire new workers, expand a business or purchase additional goods and services.

Vanishing credibility

Our economy is sputtering. The signs of recovery are being overwhelmed by persistently high unemployment and real inflationary pressures. The two are linked. And this administration seems determined to steer clear of any action that would actually help. Instead, they seek to distract the voters by blaming someone.

It is not credible for the administration to endorse Ben Bernanke's decision to flood the world with dollars — and then denounce China for manipulating its currency.
Bret Stephens, WSJ (link requires subscription)

This is exactly what the thugs in the middle East have been doing for 50 years. They demonize Israel so as to distract their populations from their economic failure and absolute oppression.

We must not allow this to continue. We must elect new leadership.

No ability and no right

One of the tenets of the modern American liberal belief system is that the broad sociological and economic improvements can be achieved through scientific means. Therefore, a highly advanced thinker can, by the power of their superior intellectual capabilities, devise a strategy that will change society for the better. You can see this in action when tax credits are implemented for certain types of activity, like using solar energy. You can also see it when government agencies decide the content of school curricula.

Government agencies are made up (for now at least) of a minority of our population. Yet they make decisions that affect people of every walk of life. Modern American liberalism is content with this, since those agencies are made up of specialists, who presumably know more about their field than the rest of us. For a liberal, that superior knowledge gives them the authority to make those decisions.

The reality is, though, that the men and women who make up those agencies cannot possibly possess enough knowledge to surpass the population at large. The citizenry has, collectively, the benefit of its full experience and knowledge. Therefore, citizens make far more productive decisions and make far better choices than government agents.

Government agencies have no right to favor certain industries with subsidies, and penalize others with additional taxes. They do it anyway ... and we can see the entirely predictable results: anemic growth across broad swaths of our economy.

Except for the government agencies.

The right to work

I don't know the history of labor law, so I really don't understand how a person can be required to join a union in order to work at certain companies. But that is the essence of the dispute between Big Labor - and its allies in the administration - and Boeing.

We must wake up to the damage that unions are doing to our economy. They drive up costs. They make it harder for businesses to justify hiring more workers. And public unions are the most insidious of all. They spend their members dues on political activities in order to elect legislators that will divert ever more money from the private sector into the union.

New Hampshire's legislature passed a right-to-work bill, but the democratic governor vetoed the bill. Would it be a surprise to learn that unions supported Gov. Lynch in his campaign? You get what you pay for, I guess. Here's hoping the state senate can override that veto, and that right-to-work spreads across the Northeast as other states recognize their competitive disadvantage.