Californiomics

I was listening to the news on the radio this morning when my brain got into first gear. The announcer on the radio was discussing how some judge had given his approval to Gov. Schwarzenegger's decision to give state workers two days unpaid leave each month to ease the California's financial problems. Eureka! I exclaimed to the man in the car next to me. I think he did not hear me for he drove away heading south on the Pacific Coast Highway. You see, the economy of California will benefit from less money being spent on state workers. The state will save money and everyone except the state workers who get furloughed will be better off economically. I know that you already know this. The poignancy of this is illuminated by asking the comparative question: How is the reduction in hours for government workers different from the reduction in hours for private sector workers? Private workers, insofar as they are productive, add to the wealth of everyone. Government workers create very little wealth overall. Many actually do not create any wealth at all, but only consume the wealth of others.

This leads us to an analysis of wealth. What do I mean by the production and consumption of wealth? The production of wealth is the creation of goods and services which continue or enhance our standard of living. Bread, meat, houses, cars, shoes, movies, novels, medicine, needed professional services from doctors, lawyers, police and courts, et cetera. These are wealth and things that preserve and protect persons and wealth. Production and services must be useful and wanted to be wealth. This is why the more people we have working efficiently producing things that people really need the wealthier we all are. This is why the more government workers we have shuffling papers and telling people how they should live the poorer we all are. Productive private workers as a rule create more than they consume. Government workers, on the other hand, consume more than they create. Ergo, if the government workers produced more than they consumed then California would be poorer for employing them less as would a private enterprise would make less profit for laying off its most productive employees. When a private enterprise trims the fat it lays off its least productive employees, at least in theory. If California will be better off for having some state workers take two days each month off without pay, imagine how much better off we will be if they take four days off each month instead. In fact, we should move to trim the fat even more and encourage the government workers to move from non-productive government jobs to productive private sector jobs providing goods and services that are useful, desired, and actually needed. Ditto for Washington. Now you can take away Paul Krugman's Nobel prize and give it to me instead. Yes, Mr. Krugman the Earth is in fact round; and no, governments cannot spend us into prosperity.

Various Proposals for Fixing the Economy

Number 1

This is the proposal that we hear most often proffered by almost everybody. It goes something like this: First we have the government hire 600,000 new federal employees. Then we print a whole bunch of new money. Then we pass it around so companies and private citizens alike can go on a spending binge and "grow the economy." Washington will pass out lots of new contracts to private companies to engage in public work projects thereby putting hundreds of thousands, if not millions of people back to work. We will bridges. We will drain swamps. Scratch that, swamps are now called wetlands; we will hire environmental guardians. A solar panel on every roof! We will build hundreds of billions worth of collective transportation (light rail) and staff it with new union employees. We can conscript the youth into "national service" driving unemployment even lower. And don't forget the bailout for the UAW- I mean the big three auto companies. We have to maintain all those good union jobs and union political power- I mean we have the patriotic duty to protect the greatest automobile industry in the world. We will spend so much that instead of being poorer we will be wealthier.

And, if for some unforeseeable reason this does not work- the dollar completely collapses and we face social turmoil and economic upheaval- we can always rebuild the economic infrastructure by cooperating with Canada and Mexico to create a single North American currency. We can then force the average American to jettison his unbridled individualism in favor of a more cooperative spirit. Can't we all just get along.

Number 2

This proposal is a bit more draconian. Let us call it the "trimming the fat" proposal. The goal is to eliminate all non-productive behavior and to stimulate productive behavior thereby raising ourselves to perpetual prosperity. The first thing we are going to do is to end slothful behavior by outlawing unemployment. If you are chronically unemployed you will be subject to military conscription. That will get the lazy bums back to work. Next we take everybody sentenced to more than five years in prison and summarily execute them. No more free ride. And speaking of the indolent, we then criminalize homelessness. The government will gather up all those bipedal eyesores who beg for change and are olfactorily offensive and grind them into hamburger and feed them to the working poor thereby eliminating the need for food-stamps and welfare payments. Of course, we have yet to deal with those who don't work not because they are shiftless, but because they cannot work. The state will have to euthanize persons when it is discovered that they are handicapped or retarded to the point that they burden our emerging great society. Imagine no more special ed, no more handicapped parking, and no more compliance with the Americans with Disabilities Act. We should probably extend the opportunity of a good death to all youths who cannot meet their public school benchmarks. (Mommy, can I do more homework instead of playing Nintendo?) We will eliminate all people who are a net drag on the economy. Imagine all the money we will save. Imagine all the money we will save when we end social security and medicare. Let the elderly work until they cannot, and then stop using up resources and taking up room. When your car has broken down, is beyond repair and will never drive again you do not wax it and park it in the garage. If you have not saved for the future, and no one else is willing to take you in, then you're in for a measure of tough love. Soylent Green is people!

Number 3

You can call this proposal what you will. It works something like this: Instead of aiming to eliminate all non-productive behavior like proposal number 2 we stop subsidizing non-productive behavior. The government stops paying people not to work. If you want to be paid you will have to do something productive for someone else. In fact, we stop subsidizing any kind of behavior. We let each and every person decide for himself if to work, where to work, how much to work for, what to buy, how much to save, etc. But what about the current state of the economy? What about it? Everyone was happy during the party. Now we have a hangover. It will pass. It is not pleasant, but it will pass. The Fed was the main culprit with its cheap and easy money. Therefore, the solution to our economic hangover is not more cheap and easy fiat dollars, but spending restraint, tax reform and a return to sound money. Washington needs to immediately start spending less than it takes in. This is not the time to take the scalpel and trim a little fat. (Actually, most of the govermentarians don't want to trim any fat at all but to suck the marrow right out of the bones of every tax-payer and productive American.) This is the time for the meat-cleaver. What Would Murray Rothbard Do? Only a return to to the dynamic responsiveness and unmatched prosperity of free-market entrepreneurial capitalism can save this country now.

With the outright plundering of the American taxpayer to prop up the businesses of the politically connected, Washington seeks to chain our children to this behemoth debt and turn us all into indentured servants to the masters of our money. Great change is coming to America. It is uncertain, however, whether this change will be a return to a viable economic system which enhances our personal liberty, or will be a further decent into socialism, the elimination of prosperity, the spread of want, and the emergence of a new dark age insofar as individual liberty is concerned. All things of this Earth must come to an end, and if the United States abandons its heritage of respect for the individual in favor of collectivism, then it is more than likely that this great experiment of self-rule through democratically elected government will, for now, come to an inglorious end as the one-time champions of liberty and human freedom will content themselves with a few scraps from their masters' tables and huddle together in the dark bereft of courage and dignity.