Skip to comments.Year-Round Lessons from a Winter Day
Posted on 07/16/2012 10:23:10 AM PDT by jfd1776
Reflections on the Recovery that Wasn't...
Once upon a time, oh, lets say, six or seven months ago an agent of the federal government arrived at a private farmers large cornfield in Barron County, Wisconsin, surveyed the scene, then walked up to the farmer.
Hello, Im from the government, and Im here to help you, said the federal agent, lacking either the inclination or ability to be more creative in his introduction. The farmer nodded, but said nothing, as he hadnt actually asked for any help, and wondered why the guy had come.
As far as I can see said the agent from Washington, D.C., nothings growing on your land. Nothing at all.
Thats true, said the farmer, looking deep into the federal agents eyes, seeking some sign of intelligence. Theres nothing growing here at the moment.
Well, we cant have that! announced the agent, who promptly took out pen and clipboard and started to write.
Would you like some free government seed? Would that help?
No, said the farmer. I have plenty of seed. I use a hybrid I trust. It works fine.
Perhaps some field equipment? We can get you a combination of low interest loans and an energy-saving tax deduction that will make your new equipment feel just like its free! How about that?
No, said the farmer. I have great farm implements. Good American equipment. Bought it a few years ago; its paid for. Just right for my farm. Dont need anything else.
Some fertilizer, perhaps? We have lots of assistance programs that can provide all the top-quality high-nitrogen fertilizer you could possibly want, all straight from Washington!
Ill bet you do, said the farmer. But no, Im happy with my current vendor. Dont need anything from the government. My farms doing just fine.
But stammered the federal agent, looking around at nothing but barren, snow-covered farmland from one horizon to the other, but nothings growing! There MUST be something we can do. A new program, a check, a loan, a tax break, a permit? Isnt there anything youd like us to do?
Why, yes there is, answered the farmer. You can look at a calendar and learn something about the agriculture business. This is January; the ground is hard as a rock, and there are two feet of snow on my field, topped with a sheet of ice from yesterdays sleet storm. Come back in the summer when Ive tilled and sowed and fertilized and watered, and youll see nothing but beautiful cornstalks as far as the eye can see. But I cant plant in two feet of snow. For a guy who works for the Agriculture Department, you really ought to know that.
Dejected, the federal agent climbed back in his rental car and headed back to Chippewa Valley Regional Airport, ready to return home to Washington, where he understands everything and nobody questions his judgment or his expertise, and where he intended to report that the current federal programs appear to be insufficient to produce results, so we need to develop more and bigger federal programs to offer to the poor farmers. And, he also noted, he needed to buy some warmer clothes for his next trip, because this place sure gets cold in January.
FROM THE HEARTLAND TO THE NATION'S CAPITAL
On a hot summer's day, the idea of planting seed in January through two feet of ice-covered Wisconsin snow may be comical, but it is true, in a way. The federal government is full of bureaucrats who truly do want to do good, who honestly do hope to help the American economy thrive; they just have no idea whatever how to do it.
And so the Bureau of Labor Statistics sends out export price surveys every month for manufacturers to fill out and the Department of Commerce sends out transportation surveys every month to see how much private trucking activity might be needed and the Federal Maritime Commission proposes using confidentially filed private ocean container tariffs to create an index to tell people whose freight prices have just gone up or down, whether their freight prices have gone up or down.
Their surveys are a nuisance, and they produce wildly inaccurate reports of minimal benefit, but the bureaucrats roll them out anyway, to prove their value as federal employees so they dont get downsized, as if that could ever happen in the leviathan states natural habitat anyway.
They use these studies and others to build new and ambitious programs. The government offers subsidized loan rates to talk you into a college education you cant afford, or a new tractor you dont need, or a new house youre not ready for. They give you an energy tax credit for replacing your perfectly fine refrigerator with a new one, or for replacing your windows, or getting rid of your old American car in favor of a new high-mpg Korean model. They call the programs Cash for Clunkers or the Weatherization Assistance Program so that gullible people can convince themselves that the boondoggles fulfill some genuine public need.
When we complain that their surveys, studies, and other assorted red tape are all smothering and strangling our economy, they ask us to explain why, in a survey analyzing their surveys usefulness, either online or by mail, preferably in triplicate. And at the bottom, they always mention why its all so gosh-darned important, as required these past forty years by the Paperwork Reduction Act.
AN IMPERFECT METAPHOR
The one key flaw in the above story, of course, is that it presumes that the inactivity is not the governments fault. The government didnt cause the snowstorms of winter; thats just the natural cycle in the north.
But we can get more out of this metaphor if we think of the farm as the American economy, and recognize the source of the frigid cold, and the hard ground, and the ice-covered two feet of snow all over everything in sight, despite it being summertime now. In this economy, the source of it all is the federal government.
Our private sector wants to expand. We want to hire, we want to produce; we want to thrive. It is the natural inclination of a business to grow and prosper. But government is holding it all back.
Obamacare, lurking around the corner, will add hundreds of billions of dollars in taxes to the cost of doing business. Money that might have been invested in new hires, new buildings, or new product launches, is instead left in investments and bank accounts, earmarked for the day when these costs escalate as expected or more likely, much more than expected.
The annual so-called Bush tax cuts, now a decade old but still bearing Dubyas name, are never made permanent; Congress and the President use them as a political football for six months a year as they debate, never whether to cut the burdensome taxes that make America the most severely taxed country in the industrialized world, but whether to allow those tax cuts to expire and thereby cause a huge tax increase on January 1, or just to leave them in place so our tax burden on American employers remains incredibly high, but at least doesnt go higher. Why cant that tax burden ever go down?
All these many assistance programs themselves are a damper on the economy. Government encouragements cause resources to be redirected away from where they would naturally have been spent. So the person who could use a new refrigerator but really needs a new oven more gets the refrigerator this year because he cant let that refrigerator tax rebate go to waste. The family that needs a new roof replaces its windows instead, because theres a tax benefit on the windows but not on the roof, even though as theyll discover to their horror in a year or two its the roof that really should have been prioritized.
And who gets all this misallocated business? The government plays a role in picking winners and losers. By directing people toward a perhaps unnecessary and overpriced college degree, for example, they both keep the colleges from cutting their prices, and they keep the students and their parents from spending their money more wisely on the other products produced by the American economy.
And all thats not to mention the cost of administering these programs. The federal employees to run them, the radio and television spots that advertise them, the tax dollars and longterm borrowing that funds them all these costs add up to a huge drag on the economy, layer after layer of weight, smothering the economic growth we so desperately need.
Add to these the explosion of other regulations on the business world over the past few years. America long since passed the point of useful regulations; our government is now completely in the business of creating destructive brakes for the American economy. The EPA makes it practically impossible to build a new power plant. The Department of Labor sides with unions in illegally telling a business it cant establish a new production line at its own factory. The SEC practically hands brochures to financial people, on how to move their corporate headquarters offshore, by making American regulations on our banking industry so onerous.
Returning to our analogy our farmer is the private sector economy, and its summertime. He SHOULD be planting and growing, preparing for a harvest, but his fields are still covered. When the snow melted and he should have been able to jump back into farming, the government replaced the snow by imposing two feet more of unexpected dead weight. With the costs and red tape, the current and future risk, our farmer just doesnt dare try to grow anything new. Better to play it safe; let it lie fallow for a season, and pray for safer, more promising conditions next year.
We need a change at the top. Mitt Romney in the White House, with a Republican majority in the Senate to join the Republican House that was won in 2010, will at last be able to remove the destructive manacles that the statist dominance of recent years has placed on the economy.
Obamacare and Dodd-Frank must be repealed. Sarbanes-Oxley, the Clean Air Act and Americans with Disabilities Act, and so many other well-intentioned programs like them, need to be studied and moderated, so that the worthy goals they sought to accomplish are no longer outranked by the destruction of employment that necessarily resulted from such overregulation.
We have inventors ready to get patents; we have entrepreneurs ready to file papers on their startups. We have existing manufacturers ready to grow bigger, to break ground, add machines and buy raw materials, and hire more people to work them.
All we need is to be welcoming to these heroes of the free market, to stop driving them away and to start encouraging them to stay instead. Its really not all that hard.
We just need an administration that - with the blessings of Divine Providence and a renewed American confidence in the invisible hand of the market will finally, in the words of Ayn Rands hero John Galt, Just get out of the way.
copyright 2012 John F. Di Leo
John F. Di Leo is a Chicago-based Customs broker and international trade lecturer. A former chairman of the Milwaukee County Republican Party, his columns can be found regularly in Illinois Review. The farmer and the federal agent are of course fictional; their experience of governmental interference, however, is repeated both literally and figuratively, all the time.
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So I got to daydreaming about cool winter, the crisp clean air of January in the midwest... and before you know it, it turned into a column.
So here are my thoughts on the economy, and why we still haven't broken out of the flatness of the end of a recession that technically ended two years ago. How is it that a recession can end, without a recovery following???
Excellent - thanks for posting.
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