#47 – Capitalize on the Crisis?

The U.S. economy is plunging toward a recession/depression. Unemployment has soared and businesses are struggling to pay their bills. State authorities are coercing Americans to stay at home as business profits are lost, the economy is tanking.

When the authorities initiate a “shelter in place” directive do they even care about the ramification? The hardest hit by these directives are services. The service industry accounts for about 70% of this country’s economy. Shutting down “non-essential services” is shutting down a huge sector of the economy. In other words, for many, no work means no money.  No money translates to default on loans, mortgages, rent and car payments not to mention food and utilities.

I am bewildered by both the moves of the State and the response of the public. In a time of crisis, authority is allowed and encouraged to expand. Authority, when served up to the public as “protecting our citizens”, is dangerous and is often the greatest usurper of freedom because what is enforced today becomes palatable in the future.

Our welfare-warfare state has created a Nanny society where we look for our next directive from the central planners. Anson Dorrance, the legendary women’s soccer coach at UNC says, “athletics do not build character, it exposes character.” Well, crisis exposes character too. This would explain the narrative shift going from impeachment, for the abuse of authority, to not using enough authority (combating COVID-19) in just a few short months.

My bewilderment has been tweaked by Washington’s moves to help the economy. Congress released an economic stimulus bill that includes $50 billion in “loans and loan guarantees” for passenger airlines; $8 billion for “cargo air carriers”; and $150 billion for other “eligible businesses.” The legislation will give the Treasury Department the authority in determining which businesses qualify for this $150 billion fund.

The media and Washington can call it a stimulus package but call it what it is, a bailout with helicopter money attached to ensure inflation. A program that targets specific chosen industries is a stimulus for those specific industries only. In reality, they have picked the winners and the losers will fend for themselves. In 2009 they choose the banks as the winners and determined that the homeowners would be the losers. Bank executives got cash bonuses while the homeowners lost their homes.

Congress tells us that legislation stimulus is based on four “pillars”

1) direct cash payments to individuals

2) funding to the health-care industry

3) loans to target industries (bailouts)

4) payments to small businesses

Number 1 – Direct Cash Payments to Individuals

Direct cash payments to Americans is like giving $100 to an addict and saying “go get straight.” The legislation would provide checks of $1,200 per adult, as well as $500 for every child in those families. It’s more complicated than that and will probably take a whole new department of bureaucrats to figure out and administration and eligibility of payments. But what will $1,200 dollars provide: one month’s rent, one payment of a mortgage, a couple months utility bills, one car payment or maybe a week’s supply of heroin.

If Washington really had concern for the lower and middle class and wanted to help them get through this recession/depression they would immediately cut spending and cut taxes. Especially defense spending, bring all the troops home and return to the workers all the taxes they took in 2019 and stop collecting (withholding tax) the 2020 taxes immediately.

Number 2 – Funding to the Health-care Industry

It was America’s health care central planning system that delayed many of the proactive responses to the virus due to the rigid top-down rules and procedures imposed by the Pure Food and Drug Administration (FDA) and the Centers for Disease Control (CDC) in hamstringing local and decentralized development and use of Coronavirus testing tools since nothing could be done without approval and permission of the American government’s health and drug planners.

The easing of these pains starts with letting the market prosper, not more authoritative directives. Did anyone take note that in order to get more research on the testing for COVID-19 and vaccination research the government had to remove regulations? Amazon and other goods delivery companies are prospering because the open market will adjust to meet the market demands of consumers.

Number 3 – Loans to Target Industries (bailouts)

Turn the money spigot off. No more bailouts! These target companies will not learn anything from a bailout. History shows that it will make even riskier business decisions when the government establishes a precedent of bailing out. A “too big to fail” becomes a huge chip on their shoulder because they know that no matter how reckless their finical endeavor is big brother will be there to bail them out. Enough is enough.

Bailouts will just accelerate our false capitalism. I call it false because it is saturated with an excessive level of corporation-government predator relationships. This is called corporatism also known as fascism.  And socialism is not the answer. The government should not be collecting authority they need to distribute it back to the community as the US Constitution instructed. Authoritative governance does not work. Central planners can not pick winners and losers. The market with its supply and demand is too much of a fickle environment.   

Number 4 – Payments to Small Businesses

Local supply chains must be allowed to recover and new start-up companies must be encouraged. Enterpenures will grow their businesses if left unmolested by imposed licenses, certification, quotas and yes minimum wage requirements. The stimulus package should be focused, at the grass-roots and local community. Community banks need to make loans available for the local service vendors and entrepreneur that have an invested interest in community development.

The market is saturated with too much cheap money. The Federal Reserve’s strategy of keeping the interest rates low has failed and negative rates will make it worse. The rates must be release to seek a level that promotes savings. Adding more cheap money into the market will spike inflation thus lowering purchase power. Life after this crisis will change, people should have an incentive to save and spend prudently. 

Socialism and fascism have no heart they work contrary to community, family, spirituality and religion because their first loyalty is to the state, not the individual or local community. Please Mister bureaucrat let us Capitalize on this crisis and let the marketplace lead.

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