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BREAKOUT 2.0
For Breakout 1.0, go to
http://jaygaskill.com/Breakout1.0.htm
The
THE FEAR FACTOR
Cutbacks are driven by the brutal economic reality. When the cupboard is empty, is really is empty. Street-level blowback is the equivalent of an infant’s scream. The situation actually requires adult supervision. Blowbacks follow cutbacks like the night follows the day.
The probabilities are that
...Except
That burgeoning economy increasingly resembles a bizarre
marriage of the
On this day,
And the fed has begun the process of political spin. {See
Do you detect the shadow of the coming storm here?
There are two alternatives: We get serious about fixing our overleveraged, over borrowed, over extended fragile prosperity, or the iron laws of economics will impose a solution from which we may not be able to recover for generations.
OUR SECRET WEAPON
Our secret weapon, our only means available for a self-bailout,
is to seriously attack the accumulated political load on commerce. This will generate opposition, but some
perspective here is needed. Nothing
generates bigger riots than sudden, involuntary poverty. As we approach the prospect of reducing the
political, regulatory and bureaucratic impediments in the
They fall into three categories:
In each of these areas,
By contrast, the
The moment is overripe for an intelligent attack on the
political load burdening
Not all of the burdens holding us back stem from health and
safety concerns. Much of the burden
represents the bureaucratic processes themselves, the “hearings” and “inputs’
and “reports” that are designed to substitute endless, unproductive discussions
for decisive progress. The
post-earthquake
Delay is a form of regulatory abuse, the direct byproduct of politics as participatory obstructionism.
FREEING UP COMMERCE
The celebrated Commerce Clause of the
Among the US constitution’s grant of powers to the federal government, “Congress shall have power to regulate commerce...among the several states...” from Article One, Section 8, clause 3, placing that power among the list of other specific government powers such as to provide for the common defense.
To those of us who read the constitution through the lens of original purpose and intent, the federal power to regulate commerce is read together with the supremacy clause[1] in service of freeing commerce from conflicting burdens imposed by the states.
James Madison (1731-1836) is widely recognized as the
principal author of the
“Yet it is very certain that it grew out of the abuse of the
power by the importing States in taxing the non-importing, and was intended as
a negative and preventive provision against injustice among the States
themselves, rather than as a power to be used for the positive purposes of the
General Government, in which alone, however, the remedial power could be
lodged.” - Letter to Cabell,
Put plainly, the commerce clause was originally designed to clear the path for free and unencumbered trade within the USA, overriding contrary state levies, tariffs and restrictions, because, after all, we were members of one union. By the early 1800’s, the commerce clause was used to prohibit state monopolies over travel on interstate navigable waters as in Gibbons vs. Ogden 22 US 1 (1824). “...when a State proceeds to regulate commerce with foreign nations, or among the several States, it is exercising the very power that is granted to Congress.” 22 US 200.
Just as individual states attempted to choke the flow of commerce within the US over navigable waters – only to be broken up by federal override, a suffocating web of regulations, tariffs and laws have grown up to smother the new commerce of the 20th and 21st centuries. At a time when we desperately need to promote an economic recovery without spending more federal tax (or borrowed) dollars, the Commerce clause is being used to smother a recovery.
I have described this suffocating web as the political load on commerce. Much of it has been imposed by individual municipalities and states, but even more, ironically, has been imposed by the federal government itself using (some would say perverting) the authority granted to it under the commerce clause.
That which as originally done to liberate commerce within
the
In Breakout 3.0, I will outline some concrete steps the president and congress could take to employ the commerce clause to do what it was originally tasked to do: Promote commerce. That which the government has the power to regulate it also has the power to free from regulations.
About two years ago, I wrote this:
“It is both legally and practically feasible for a specific, as yet unnamed federal agency to be created, empowered and charged with the mission to break clear paths through the ice floes of bureaucratic red tape and punitive taxation so that nascent, privately funded commercial enterprises can flourish more quickly and robustly than anyone though possible, especially in the pre-recovery economic environment.
‘In the same way that an Arctic ice breaker can break open a clear path for a fleet of fishing trawlers, a federal regulation and taxation ice breaker can do the same for a strong business recovery. This would be proactive, creative conservative-liberal policy at its very best. It would serve the same, practical function in the tangled web of business-killing regulations, licenses, permits, delays and kleptocratic taxes that bribes do in corrupt Third world economies. Except that its operations, in partnership with cooperating state governments would be above board, transparent, subsidy-free and legal.
“Business people are not fools. The protections afforded a start up would need to provide a clear path that could relied upon to remain clear for a reasonable time, say, a full decade or more. And the political leaders who back this plan should not be fools, either.
“The proposed protection is reserved for privately funded ventures only, the kind where the cost of failure is born by those who took the risks in the first place, the same investors who can reasonable expect to be allowed to retain the rewards of their success.
“...this model (or something very much like it) will work. But just stop for a moment to think about the implications. How far we have come.... Pandering politicians were compelled by circumstances, their own ideological inclinations and the electoral reward system to act as the public parasites of success. Now they have nearly brought down the whole beast. The fleas have almost killed the lion. We are now forced to see ourselves as a Third World Country.....
“The heavy lifting? That takes place in about two years, or just as soon as the Beltway crowd figures out that our crater is deeper than anyone had been willing to admit....
Two years later, we are much closer to the day of
reckoning. This discussion is continued
in Breakout 3.0
Stay tuned and...
Happy Thanksgiving to all!
JBG
[1] Article Six, Section 1, Clause 2, “This Constitution, and the Laws of the United States which shall be made in Pursuance thereof... under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing ...in the Laws of any State to the Contrary notwithstanding.”