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The Greater Reset: An “Abuse-Of-Crisis Prevention Act” To Restore Limited Government

By News Creatives Authors , in Business , at October 13, 2021

Coming in the wake of 9/11 and its Patriot Act, and the 2008 financial meltdown, the pandemic marked the third major economic shock of the 21st Century met with a flash-policy stimulus response. This time, policymakers pursue and continue to pursue an even more aggressive and “transformational” agenda involving intergenerational debt and household dependency on government rather than fostering intergenerational wealth and self-determination.

Limited government cannot survive repeated experiments in debt finance and hyper-regulatory crisis interventions, but it is clear by now that the political class will not preserve limited government unless obliged in strict terms to do so.

Ready, Reset, Go. Books could be written over the reasons for shocking power grabs by the federal government, but at root is the presumed delegation by the public of boundless powers to coerce their own countrymen; powers which do not exist. The past two years have seen progressives worldwide regarding crisis as an “opportunity for a reset,” and in turn agitating for preexisting regime-change agendas and “new social contracts,” all of which translate into greatly enlarged government. The phenomenon is embodied domestically in Joe Biden’s “Build Back Better” agenda, and there is no shyness about any of it as a glance at headlines confirms. Just this week House Majority Leader Nancy Pelosi scolded reporters she thought “could do a better job of selling” the multi-trillion reconciliation package she’s trying to get to Biden’s desk.

If the moment demands that no crisis go to waste, classical liberals’ have a counter-obligation to reduce the contours of the state via an Abuse-of-Crisis Prevention Act (perhaps constitutional amendment) to restore the “silken bands of mild government”

The North Star of the “workforce, childcare and next generation” agenda embodied in Biden’s “human infrastructure” campaign appears to be the eventual attainment of able-bodied adult dependence on the state via a universal basic income (UBI). Philosophical precursors have included Obama-era medical care reforms, proposed free college and forgiveness of student loans, plus pandemic-era innovations like repetitive stimulus payments, rent moratoria and a drive to make refundable per-child tax credits permanent. Higher minimum wages, paid leave and additive federal unemployment entailed further federal support for individuals whose jobs such policies themselves tend to displace. Now that we have seemingly arrived on the tail end of the pandemic, it is today’s “meddle-class” interference in lives that needs quarantining.

Today’s Motto: Be Unprepared. Little was nor remains more inevitable than pandemic and unexpected economic shock; these are the lot of mankind. Even Republicans acquiesced early on to many questionable pandemic responses and stimuli, and this year compounded those moves by signing onto a debt-fueled “Endless Frontier Act” that will over-regulate the tech sector, plus lent their support to a similarly regulatory trillion-dollar infrastructure spending bill.

Glaringly absent in any of the 2020-21 legislative response to economic shock is a slate of reforms reflecting harsh lessons learned and reorienting the federal stance toward one of fostering household and private sector resilience, and forestalling overreaction to the next inevitable crisis. As it stands, there is a 100 percent chance of more bipartisan “spendulus” the moment the next crisis befalls us, and a repetition of population-softening policies and debt that undermine future generations’ ability to manage their own crises. Fact-checkers tend to defend the status-quo bailout-and-lockdown in narrative-affirmations that chastise critics of progressive policies rather than question conditions that foster reflexive flash policy in the first place. Transformative (that’s the politicians’ word) spending distorts, reshapes and advances interventionist ends well before downstream administrative careerists issuing thousands of annual rules and regulations to effectuate the “reset” or the “building back” appear on the scene.

An “AOC Prevention Act” to the Rescue. A new resilience, growth and preparedness agenda — an Abuse-of-Crisis Prevention Act — needs to recognize and accept the inevitability of future shocks, enable societal sectors to “pre-prepare” for them, and institute stabilizers to kneecap and punish political exploitation of misfortune and the erection of power centers to regulate and “fund” the ordinary ins and outs of adult and family lives. Non-exhaustive elements, each likely requiring dedicated congressional committees and extensive hearings and rigorous formulation of an entire suite of reforms, follow: 

One: Continual Regulatory Liberalization Instead of Stimulus. Early in the pandemic, the Food and Drug Administration blocked sale of “unauthorized” home testing kits; the Centers for Disease Control interfered with researchers tracking viral spread without “proper certification”; and the Occupational Safety and Health got in the way of the production of N95 masks.

Getting rid of disruptive and inconsistent regulations that were never needed like these is a no-brainer with pro-health as well as economically beneficial effects. The same goes for longstanding proposals to reform administrative state processes by which regulations are created and overseen (but rarely eliminated) in the first place. The chronic non-pursuit of these is emblematic of the crisis-exploitation mindset preoccupied with government expansion via spending and mandates which are themselves sometimes directly harmful, such as the dangerous over-fixation on ventilators and intubation, and the wasteland and wasted year of remote learning. Yes, local governments need to pay attention to liberalization as well.

Two: Circumscribe Emergency Declarations. There is a tradeoff between shock-readiness and the ease and temptation of defaulting to emergency flash policy. Pandemic interventions ranged from distortionary seizure of corporate productive capacity via the Korean War-era Defense Production Act to create ultimately unneeded supplies like ventilators, to lockdowns’ destruction of the very businesses whose operations were necessary to spawn recovery and preserve employment on the other. Such responses undermine the institution of private property that undergirds resilience. Addressing it all will require Congress to sign off on emergency declarations, rather than allow a president to run wild with them. Sen. Mike Lee’s ARTICLE ONE Act, for example, would roll back legislative powers given to the executive branch by the National Emergencies Act of 1976, upon which today’s declarations are anchored, amending it to require Congress to vote to extend month-old emergency declarations. This is distinct from the current requirement that Congress vote to cancel a declaration. The change is important, since we never needed (see section above) centralization and permanence of so much crisis-response activity at the federal level. Since the Emergencies Act, however, crises now dangerously put the character of the country in play by deepening that very centralization. As Republicans themselves demonstrated in 2020, prescriptions for bigger government now meet little resistance since prior big government knocked down obstacles. Policymakers need to protect future generations from this deterioration.

Along with addressing the scope of emergency declarations, moral hazard concerns created and aggravated by large central government must be reviewed and addressed. Confronting societal non-preparation caused by the anticipation of government rescue (foregoing the motorcycle helmet, so to speak) is important. The perverse incentives permeating society created by large central government, mirroring those of subsidized flood insurance and unsustainable rebuilding, rise almost to the level of forcing a revisit of the social contract (yes, the same one noted above that progressives want to rewrite unilaterally in favor of government power). As the Covid emergency transitions to the climate one the left is teeing up, leadership will see nothing amiss in, for example, using emergency powers to destroy affordable fossil fuels in the transition to “clean” energy. “Green” energy will need permanent stimulus until the climate emergency is over, which it won’t be on the progressive watch. While there is no climate emergency, we do face the emergency created by the lust on the part of some to politically control economic activity. If you doubt that, try to get a member of the White House press corps to ask press secretary Jen Psaki or Joe Biden himself if he doesn’t scamper offstage to itemize the parts of the World Economic Forum’s Reset agenda with which they disagree.

Three: Starve Government While Feeding Household Intergenerational Wealth. Today’s leaders’ view the social contract as a fluid one, and for reasons not entirely articulated pursue of a society of induced dependence and dependents (both words) via implementation of custodial programs aimed at funding the ordinary aspects of life faced by able-bodied adults, up to and including lifting the burden of those adults’ responsibilities to their own families. Social regulation that granular must influence the process of family decision-making itself. Securing the aforementioned UBI for more than 50 percent of the public will make the spoils more easily subject to escalation, despite the limited nature of some pilot programs. Why elites would even dream of interfering with middle-class self-sufficiency is beyond this discussion apart from the insistence that they be stopped. For households and families, this means policymakers must, with full awareness of the gravity of the task, turn from the intensifying UBI campaign and enable the extreme opposite agenda. Rainy-day, rainy-month, and rainy-year resilience funds (and supplies and staples) need to be allowed for and “prepped” for at all levels of society: individual and household, business, state and local government, all in ways aimed at vastly expanding wealth creation (regulatory reform has been mentioned), maximizing the prospects of mutual aid and respect as well as applying appropriate and humane social pressure “Ant and Grasshopper” or “Little Red Hen” style so that the truly disabled and unfortunate can receive undivided attention.

A mutually beneficial social contract does not repeatedly exploit misfortune and bloat government by treating human beings as pets on the one hand; nor as livestock on the other via a global minimum tax, the monitoring of low-dollar transactions and the taxation of unrealized gains. These should be replaced with resilience-expanding policies enabling the accumulation of intergenerational household wealth and self-reliance. While the super-rich may now hold as much wealth as the entire middle-class, 120 years ago neither had cars, LEDs, air conditioning, smartphones, seedless watermelon, scented trash bags and blue toilet water. The left’s class warfare agitation notwithstanding, this means the capability exists to wield modernized, rational “pioneer” capabilities to enable stockpiling more months and years of necessities, staples and dense calories with a few weeks of income than our vulnerable, non-electrified and un-plumbed ancestors could have dreamed. The very tax code that progressives are now eyeing to scoop up more income can be altered in favor of private wealth accumulation to allow that and much more. Rather than shuttle trillions to Washington yearly, the accumulation of months and years of median income accessible for future crises can be fostered instead, with balances convertible at retirement. In the ideal, there should be zero tax liability for American households, or “taxpayer units” as they are now called, until they amass several years of liquid-but-invested savings that they can certify on tax returns each year (if you insist) and use for emergency, then retire on. One example in the inventory of policy changes could be replacement of Social Security for newborns with a parental down payment that starts compounding immediately, forever out of the reach of government. Furthermore, the AOC Prevention Act pursuit should explore the separation of benefit packages from employment (and federal administration) altogether.

An explicit starving of governments and fattening of the citizen is not merely necessary but eminently achievable since the Federal Reserve and former Treasury Secretaries have spent the pandemic era arguing that that the national debt poses no risks. That’s not what many of the rest of us believe, but the nation behaving as if it can afford UBI transfers has in that act demonstrated that it can afford leaving resources at the home front while the central government front sheds weight.

Four: Strengthen Business Resilience by Shrinking the State and Leaving Funds Where They Were Earned. Businesses and corporations are composed of the same individuals inhabiting households, and likewise worthy of allowances enabling rainy-day-event trauma readiness as an alternative to flash-policy approaches like the CARES Act’s Paycheck Protection Program. Resources come from the productive-class prime-movers in the first place, and so dispensation of funds gets called “rescue” misleadingly. Expanding readiness via aforementioned regulatory liberalization to maximize the availability of market crisis-insurance instruments to replace the expectation of government bailout of businesses is a major part of the equation. Some of the businesses able to weather Covid (like some well-run airlines) had ample cash reserves, so a related need is adoption of policies enabling accumulation of shock-absorbing wealth reserves that support self-help, mutual aid and giving-back paralleling the appeal made above with respect to individuals and households.

To that end, one option is for Congress to revisit Internal Revenue Service retained earnings policy to expand the permitted accumulation of operating expenses and retained earnings beyond current IRS caps and limitations on “reasonable needs,” as a fund to tap during an emergency or shock. Any such approach is superior to the spectacle of businesses, having sent funds to Washington for it to waste, reduced to writing coalition letters to Congress the moment crisis descends asking the federal government to assume debt to get some bailout consideration. Granted, pandemic can be unique compared to other economic shocks in that sweeping lockdowns would likely lead to some financial appeals regardless. But that is not a reason to ignore retained earnings policy; instead it presents all the more reason to revisit emergency declarations as noted above — as well as to reestablish the primacy of federalism rather than central government, noted next.

Five: At Long Last, Clarify Distinctions Between Federal and State Purview and Roles. The obvious starting point to ending the states’ and localities’ dependence on the federal government during crisis times is to end dependence in non-crisis times. Federalism dictates making decisions — like those regarding the aforementioned emergencies and stockpile maintenance — as close to the people as possible, leaving the rarer genuine “public good” concerns with the federal enterprise. An example of the opposite approach to this principle was a controversial American Rescue Plan element to shower $350 billion in fungible dollars on states, where it could be diverted to non-pandemic priorities, rewarding some states not in need or ones that arguably crippled their own economies and schools. In a reference I often cite, 2014’s Saving Congress from Itself: Emancipating the States and Empowering Their People, former U.S. Senator and federal judge James L. Buckley described the erosion of federal limits on spending for the “general welfare.” This has contributed to the erasure of distinctions between federal and state/local roles thanks to the latter’s receipt of hundreds of billions of dollars of strings-attached, federal grants-in-aid for health, transportation, income payments, education, job training, social services and environmental protection—the very kinds of support sought in coronavirus legislation. The dozens of programs that existed in the Lyndon Johnson era expanded to over 1,100 by 2019, and now cost over $750 billion according to the Congressional Research Service, thereby consuming a large chunk of the federal discretionary budget. Keeping those resources at home and avoiding the Beltway and bureaucratic make-work orbit would restore part of the eroded edifice of federalism, and better protect and enforce respective state vs. federal duties with respect to localized emergency declarations and tradeoffs affecting household and business. It is a massive task; but so are all elements of an AOC Prevention Act’s restorative agenda.

Six: Discipline. Policymakers seem disinclined to reliably safeguard even the Constitution’s explicit limitations on federal power, let alone its implied ones. They need to be persuaded to do a 180 on crisis management, adapting something like the above sketch — and more — to re-establish a normalcy consistent with preservation of liberty, limited government and a recognizable U.S.A. The abandonment of these principles is the overarching crisis, not the ongoing Covid recovery nor the climate-alarmist agenda. The current national-government “spendulus” and flash-policy approach invites political predation and worsens the consequences of shocks that arise, further embedding a non-resilience that, if not calculated, may as well be in the erosion of households’ self-reliance and the demise of compartmentalized governmental powers (federalism) it leaves in its wake. A national conversation and reforms regarding appropriate discipline of politicians who violate the oath of office and exploit crisis is a priority. The past turbulent years have seen their share of calls for censure of politicians for this or that transgression, and for limitations on immunity of public safety officers for other reasons. The abuses that lead to the suggestion that an AOC Prevention Act is necessary are inexcusable, and are likewise a priority for remediation.

Conclusion: Take this Plan and Shove It. Reset-based expansion of centralized bureaucracies and national planning is a global “meddle-class” phenomenon, but we need to fix things here. No aspect of an Abuse-of-Crisis Prevention Act pursuit and restoration of limited government is more vital than rejecting the presumption that boundless delegation to Congress of power to coerce one’s own countrymen is acceptable. For present purposes that needs translating into explicit, deliberate anti-”progressive” restrictions on recovery and emergency responses from now on.

The foregoing presents some basic elements for launching a discussion aimed at shifting the stance of the federal government from regarding adult citizens as people things are done to toward one of threating them with dignity and as responsible and capable contributors to society. The “transformation” needed is away from a manipulative paternalism to the pursuit of a resilience and growth mindset for weathering subsequent crises by diminishing Washington and empowering state and local governments and most particularly the public. Each element requires more time and commitment than available not merely on the flash-policy horizon of a conspiratorial progressive, but also that of a conventional political career. It may be that a constitutional amendment (re)fencing politicians and reaffirming boundaries is necessary. Whatever happens, or does not happen, in Washington, it is conceivable that state policymakers retain a vested interest in reaffirming their and their citizens’ rights, and they have the Article V ability to do so.

Expansion of government is, alas, nothing new, and therefore no “reset” at all; it is more—lots more—of the same. An Abuse-of-Crisis Prevention Act would embody genuine reset, in the proper meaning of restoration of constitutional principles, in particular the vesting of power in the individual rather than the state and repudiating the imposition of modern social engineering on one’s fellow citizens. Normal infrastructure serves humans; the “human infrastructure” talked of today serves those in power who set themselves above others.

Want to know more about an AOC Prevention Act? Well, so do I; we’ll just have to read the bill to see what’s in it. There’s a lot of work to do as the left likes to say, so here’s hoping some liberty-minded legislators take up the challenge.

This essay is based in part on the author’s forthcoming report, “The Case for an ‘Abuse-of-Crisis Prevention Act’.”

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