The Corporate Law Group

Economic Morality

What is economically moral?  Let’s explore a few issues.  There’s much more, but here’s a start:

A stagnant economy is immoral.  It hurts the poor.  Growth allows for opportunity and economic mobility.  What is economic mobility?  The ability for all people to move up and down.  The downward movement is important.  When we bail out anyone we use public funds to reward mistakes and inefficiency.  And, of course, the politically connected; those at the top; are those that get bailed out.  No one is too big to fail.  Let them fail.  That makes room for everyone else.

Government deficits are immoral.  They hurt our kids.  If we are going to overspend, someone sometime in the future has to underspend.  Deficits are wrong and steal from our kids.  They are funded by taxation (see below) or inflation.  What is worth breaking open their piggy bank and spending their money?  NPR?  The military?  It’s flat out wrong.

Rent Control is immoral.  It hurts everyone; the poor mostly.  Rent control should be called, “building prevention,” because that is what it does.  It traps people in their housing because no one wants to lose something they think is worth something.  It causes moral hazard for renters as they seek to “keep” their rent controlled apartment while moving to Austin where costs of living are lower.  It cause builders to think twice before committing to an expensive project.

Minimum wage laws are immoral.  They cause unemployment and hurt poor people.  We’ve always thought that if you want to screw up the labor market do it right.  Why stop at a minimum wage of $15.  Why not $100.  “Too much,” you say?  Based on what?

Bailouts are immoral.  See above.  Those not politically connected never get bailed out.  It’s only the low-life cronies.  Using your hard earned tax dollars to help out my friends is immoral.

Government spending is immoral.  OK, we get it.  A bridge too far.  But even leaving aside the whole, “taxation is theft,” trope and even assuming that some level of ‘keeping the playing field level,’ and courts, and civil defense is necessary, government spending makes everyone poorer.  Best estimates are that every government job costs between 1 and 2.2 private sector jobs.  And good or not, regulation costs money for compliance.  Poorer.  Less opportunity.  More struggle.  Etcetera.

On top of this, every time government acts it has no idea what it is really doing.  The, “lesson,” in Henry Hazlitt’s Economics in One Lesson, is that every action taken by government, unleashes an avalanche of unintended consequences.  Hayek put it this way, “The curious task of economics is to illustrate to men how little they know about what they imagine they can plan.”  When governments spend, when they act, they cause all sorts of problems no one thought of.  This should cause some humility on Government’s part.  Good luck with that.

Freedom is never immoral.  Free markets have lifted over 1,000,000,000 people out of poverty in the last two decades.  Not ‘government programs to help the poor.’  Freedom.  People can take care of themselves.  Just let them.  ‘Nuff said.