The Post-Coronavirus Marshall Plan
Republicans shouldn’t miss this opportunity to repair the economy and the free market.
In the South they say you focus on killing the closest snake first, and right now our country’s politicians and policy-makers are consumed with efforts to stem the spread of the Covid-19 coronavirus and deal with the public health problems it has already caused. Our state, federal, and local governments have fully committed their resources and time to keeping people safe and assuring they get what they need. (Read: keeping toilet paper on the shelves.)
More importantly, and impressively, the federal government and its newly-recruited corporate partners have brought their full weight to bear on finding a solution to this problem in a way this country has not seen since the Apollo program and the moon shot.
Rest assured, they will find a solution. It is just a matter of time.
But that’s only half the problem.
The President has described this crisis as a war, and if it is a war, then the coronavirus is the equivalent of an economic neutron bomb. All the buildings and economic infrastructure is still standing but most of the people needed to run it are gone.
So when the scientists find a solution and the panic subsides, the same leaders who are currently intently focused on public testing, school closures, and quarantines will be forced to take account of the residual economic damage the virus caused.
For Democrats, Democratic Socialists, and all the other Big Government-types, the aftermath will present yet another opportunity to create more government regulation and oversight. I predict the same day scientists solve the virological problem that members of Congress will propose the creation of a new bureaucracy or federal agency to “insure this never happens again.”
Of course, this will do absolutely nothing to help the small businesses that have been decimated during the crisis, or the individuals who will have consumed their savings supporting their families while in quarantine, or for the people who will be forced to find new work now that their previous jobs were a casualty of the virus and consequent panic.
Before any of this happens, Republicans should put into place measures that will immediately help revive both businesses and individuals from this economic calamity in the same way Democrats were ready with the infamous 2008 bail-out legislation after the toxic mortgage crisis. To borrow from former Chicago Mayor Rahm “Dead Fish” Emmanuel, those of us who believe in the free markets and small government should not allow this crisis to go to waste.
A few initial suggestions for the “Marshall Plan 2020,” with the understanding that this is the time for bold proposals and decisive action:
Repeal the minimum wage laws. Here in Los Angeles (both City and County) the minimum wage is set to rise to $15-hour on July 1, 2020. There is no quicker way to jump-start small businesses and allow them to re-hire employees than to repeal that increase for the indefinite future. It is one thing for politicians to mandate business owners pay employees $15-hour, it is quite another thing to generate the revenue to pay it. Give small businesses a break and let them get back on their feet by removing this artificial and government-imposed constraint on hiring.
Declare a federal tax holiday for the first six months of 2020. This is the time of year when small businesses are faced with the double-whammy of paying their taxes for 2019 as well as paying their first projected tax payment for 2020. The IRS recently made the historic move of extending the payment deadline for 2019 taxes until July, but this is a loan and not actual relief. Be bolder! Suspend individual and small business taxes for that same period and watch the economy roar when people emerge after this crisis is over. Let businesses and individuals keep their money and put it to whatever use they think best, whether that’s paying-off debt, buying new equipment, or hiring more workers. This will be infinitely more effective than dropping $2,000 government checks from a helicopter.
Remove the income limits for Roth IRAs for 2020. The stock market has taken a historic and unprecedented walloping this past week, and it may be a while before people are comfortable putting their money back into productive investments. Incentivize them by removing the constraints on contributing to these savings tools.
Dissolve bureaucratic impediments on productivity by Executive Order. If this crisis has reaffirmed anything, it’s that when the chips are down the private sector moves more quickly and more effectively than government does. By way of example, a recent article pointed out that the lack of testing kits was largely due to “Federal regulations [that] barred any labs outside the federal government from developing a test to diagnose coronavirus.” When it was discovered that the kits were flawed, there was no back-up. Thankfully, the federal government removed the red tape and the private sector moved quickly to fill the gap. It also improved the product. The government-produced tests took two to seven days to process, a new one developed by the non-government run Cleveland Clinic “delivered results within eight hours.”
This is just one example, but it is emblematic of the bureaucratic obstacle courses the federal and state (and local!) governments impose on the private sector. The President should use this example and spearhead a “Red Tape Reduction Initiative” aimed solely at identifying and eliminating these hurdles from public life. In California especially, we view the innumerable inspections, approvals, and permits as being simply expensive and time-consuming cost of doing business, and normally that’s all they are. But it is now clear to everyone that in certain circumstances the red tape may actually cost people their lives. Seize on this example and eliminate these burdens from our economy. It’s something everyone understands.
One last point our leaders and politicians should hammer whenever they find themselves on the business-end of a reporter’s microphone — capitalism and the private economy work. Those of us who believe in the power and flexibility of the free markets must proclaim at every opportunity that the American system and the vigor, innovation, and flexibility of the free market will ultimately pull us through this crisis. Mr. Sanders, his followers, and those who howl for “single payer”and government-run health care are simply wrong. Socialism, democratic or otherwise, and the stagnation and indifference it inevitably produces cannot do what America’s private, free-market health care system has done and will continue do.
What fools we would be to kill the system that saved us.