t is not easy to ruin the American economy;
doing nothing usually means
it repairs itself and soon is healthier than before a recession.
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
Government
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.
The Law
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.
Cynicism
Don’t forget the value of cynicism in weakening an economy. It is a
critical tool in sowing distrust and fatalism, as in “Why try, when it
doesn’t matter anyway?” or “Why should I follow the rules,
when they don’t?”
Greece, for example, is a cynical country to the core and one can see
where such endemic distrust got them: a successfully ruined economy.
I would lecture about the evils of federal bailouts to Wall Street
fat cats who then take million-dollar bonuses for mediocre performance —
and then appoint a Treasury secretary
who did just that. I would trash offshore accounts as something amoral and unpatriotic — and then appoint a Treasury secretary
who did just that.
I would lecture about paying your fair share and hiking taxes — and
then appoint a Treasury secretary who avoided paying the income taxes he
owed. I would sermonize on the evils of the revolving door — and then
appoint as my top financial officials those who for a lifetime have gone
into the White House, out to Wall Street, and
back into the White House.
Again, if “they” do that, why then do “we” need to pay our taxes or
follow ethical behavior? The cynical mindset is a valuable tool in
recreating a Greece or Italy. Indeed, almost any cynicism is a good
thing: so why not praise federal financing of campaigns and then be the
first to refuse it, or campaign on the evils of the Bush anti-terrorism
protocol and then embrace or expand almost all of it?
Top Down, Not Bottom Up
Leveling must go in one direction, not two. To ensure equality, the
public schools should lower standards so that all are the same. The more
who need remediation upon entering college, the more likely the
curriculum will have to adjust to level the playing field, and the less
skilled will emerge the average graduate. The more that those with
“Cadillac” insurance plans can have procedures rationed, the more others
will see their own options expanded.
The world is a finite system, a pie with only so many slices. There
is no middle class, just rich and poor. For each F student, an A student
stole the former’s resources. I would invest not in honor students, but
in remedial ones. Grades and test scores should count little for
college admission; life “experiences” and community service far better
would ensure the presence of mediocre students. The aim again is not to
turn out graduates with expertise or knowledge who build a strong
economy, but to graduate students, brand them with degrees, and ensure
they are invested in a similar ideology of redistribution. If California
— of Caltech and Stanford repute — can dumb down its public schools to
rank 48
th or 49
th in the nation in math or English testing, then there is hope for the country at large.
The War of Words
Prosperity is always relative, never absolute. A car, a house, or a
job is not to be judged on its own merits, but in comparison to someone
else who has one better. If today’s Kias are better than a Mercedes of
20 years ago, it matters little: they are not as nice as someone else’s
Mercedes of today. Britain in the postwar 1940s discovered the power of
envy and what it can do
to slow down ill-won prosperity.
From Plato to Marx to Tocqueville, philosophical minds, for both good
and bad reasons, have always appreciated that human nature is attracted
to the idea of enforced equality, to such a degree that most would
rather be poor and the same, than better off with some far better off.
Let’s give them that chance!
I would try to redefine the entire capitalist notion of profit,
getting ahead, and being rich or successful as something arbitrary.
Better yet, it should be analogous to cheating, proof of unfairness, or
incurring general shame. The point is to make profit-making synonymous
with failure; and poverty something inherently noble. Compensation
should be seen as capricious, never based on logical requisites like
education, knowledge, experience, level of responsibility, hard work,
personal comportment, or even the less predictable such as health, luck,
fate, and chance. Redefine rich and poor to emphasize the fact that one
making $20,000 a year and another $200,000 is unfair, period — and to
be corrected by a fair, all-knowing, and compassionate government. I
would talk always of poverty and hunger, never of the epidemic of
obesity or the nation’s collective youth glued to iPhones.
Sometimes, sloppy language is critical: jumble together
“millionaires” with those worth 1,000 times more, and you earn the
force-multiplying evil “millionaires and billionaires.” The word “fair”
is critical: as in “pay your fair share.” But “patriotic” is even
better, as in
“unpatriotic” past presidents who run up debt, and “patriotic” present egalitarians who borrow in four years what used to take eight.
I would also redefine entire professions in negative terms: bankers
are “fat cats”; the rich “junket” to Las Vegas; CEOs are “corporate jet
owners”; doctors lop off limbs and yank out tonsils to pile up profits.
Material wealth alone defines us. Mitt Romney is a man with lots of
money, a big house with an elevator, a wife with horses. Who cares what
he did with the Olympics or as governor?
I could continue, but you get the picture: the point is to slow down the capitalists by making them
look over their shoulders,
to hamper the grasping small businesses by prepping a psychological
battlefield in which the rich deserve higher taxes and regulations to
atone for their sins. If lots of those who once made $400,000 a year no
longer do, is that not progress? Did they not at last realize that they
had made enough money and that it was no longer the time to profit? My
goal would be to convince the pizza-parlor owner that after 12 hours on
the job, he was taking away money from his noble customers and had a
duty to pay more in taxes and cut his profits for those more noble who
could not afford his crust. But there would be one exception: fat cats
can buy exemption by loudly supporting the president, serving on his
jobs council, or investing in green energy. In other words, send the
message that getting rich building a Solyndra is noble in a way Exxon is
not. A Warren Buffett or George Soros is not a “billionaire” but a
“philanthropist,” whose profits are channeled in the right direction.
That’s an important message to send if one wants to warp an economy —
suggesting that the rich can pay proper homage and thereby win exemption
from being culpably rich.
Everywhere a War
The rich/poor dichotomy is valuable, but perhaps not enough in itself
to harm the economy. Political stasis is also critical. Think the blues
and greens in the hippodrome, fighting over everything from religion
and civil service to class, ethnicity, and sports. And what better way
to seed acrimony and to ensure constant bickering than unleashing a
series of domestic wars? The camouflaged assault-weapon killers who hide
behind the 2
nd Amendment are at war with millions of
innocent children. Even female celebrities and lawyers are under attack
by misogynists and chauvinists, who won’t pay for their birth control.
Latinos are targeted by nativists. The latter even hunt them down at
ice-cream parlors. Blacks are back to near slavery as racist
conservatives want to put them back in chains. Greens battle nobly
against the polluters, gays against the homophobes. Muslims are
demonized as terrorists by racists and bigots.
The point would be to introduce so many divisive fault lines that no
one can much agree on anything — other than a common enemy. Worry over
unemployment, slow or nonexistent growth, and massive debt gives way to
more pressing issues like gay marriage and banning semi-automatic
assault weapons. Distraction is valuable: who cares that the real
unemployment rate is way over 10% if the Keystone pipeline will destroy
the Nebraska aquifer or Jim Crow is back on election day? A “jobless
recovery” and the “misery index” can become artifacts of a distant era.
Deficits
I would borrow as much money as possible, to the point of making the
word “trillion” synonymous with the old “billion,” and “billion” now not
more than a mere “million.” On its coins, a fading Rome pressed bronze
over a thin silver core; we have done better with the Fed. Think of all
the ways in which deficits are good: they spread the wealth through
greater entitlements; they eventually require higher taxes from the
wealthy; they usually lead to inflation that erodes wrongly accumulated
wealth. For every trillion borrowed, there is a greater likelihood that
the deserving will receive more federal largess and the undeserving will
have to pay for it — and the country itself will slow down and smell
the roses. Is it not far preferable for the government to print money
than the cumbersome private sector to create it?
Interest
Zero interest is as important as sky-high interest. Thus, 1% on
passbook accounts can be as valuable in stalling the economy as 15%. If
there is no gain in stored wealth, why seek to store it? If owing is
better than being owed, why work to create capital? A good way to ensure
inflation is to ensure zero interest. The many who have no money
deserve the use of free money and the few who have it have no need to
profit from it. Again, if the state employee’s pension pays out more in
annual revenue than the multi-millionaire’s passbook account, is not
that a distortion worth institutionalizing? The point would be to guide
the retiree into real estate, precious metals, or the stock market,
anywhere with real risk to beat his .5% passbook return. Or better yet,
do away with the idea of the retiree altogether, as the poor fool keeps
working to earn what his savings won’t — thereby providing an added
benefit of keeping his would-be younger replacements jobless.
Energy
I would try to find a way to discourage private gas and oil
production through more regulation and cancellation of projects like the
Keystone pipeline: keep the country paying steep import fees and keep
it vulnerable to Persian Gulf oil. New technologies like fracking and
horizontal drilling are to be declared
de facto synonymous with pollution and destroying the environment. How can
energy “skyrocket” or gas reach “European levels”
— that alone will ensure a cooler planet or government- and union-run
mass transit — if freelancers can find hoards of natural gas on land the
government can’t touch? I would also borrow billions to subsidize wind
and solar power. The more costly the kilowatt, the more expensive energy
might slow
down human activity and finally stop the rat race.
Success is Failure
Finally, I would double down. The more higher taxes, class warfare,
bigger government, borrowing, zero interest, and political stasis began
to slow down the economy, the more I would demand more of them all, and
declare that the economy is expanding and growing. Again, the key to
fine tuning a properly moribund economy is to stay the course — and
learn to redefine failure as success.
http://pjmedia.com/victordavishanson/how-to-weaken-an-economy/?singlepage=true
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