Framing An “Abuse-Of-Crisis Prevention Act” To Confine The Federal Government

I’ve been through a few of these. I was here at 9/11, I was here during the financial crisis in ‘08, I was here during the fiscal cliff. We occasionally have these great crises and when they occur we are able to rise above our normal partisanship, and many times our normal positions, because these are not ordinary times. This is not an ordinary situation and so it requires extraordinary measures.

—Senate Majority Leader Mitch McConnell

Covid is the third, not first, economic shock of the 21^st Century. The legislative response every single time has been stimulus, control, mega-programs, “new social contracts” and “New New Deals” unrelated to the health or economic emergency. That has to end now.

Framing an “Abuse-of-Crisis Prevention Act” to Confine Washington; Presentation for CEI Santa Fe … [+] Policy Summit, June 2022.

Competitive Enterprise Institute and Clyde Wayne Crews Jr.

The progressives’ Reset agenda, best defined as custodial care of able-bodied adults, rules out limited government, and unfortunately, the GOP goes along with it at almost every turn. Trillions have been spent needlessly; the nation now stands at over $30 trillion in debt, with trillion-dollar deficits as far as the Congressional Budget Office’s eye can see.

The public should be rattled enough to call for an Abuse-of-Crisis Prevention Act to discipline predatory crisis exploitation, to starve Washington and leave wealth with the individuals, households, businesses and localities that generated it; And this has to happen before the next shock, before what constituency remaining for a tattered Constitution deteriorates even further.

An obvious starting point for ending dependence on the federal government during crises is to first end that dependence in non-crisis times. That requires being hardnosed about what the status quo subsidizes and incentivizes—and fails to punish.

The debt-fueled binges of the CARES Act (Coronavirus Aid, Relief, and Economic Security Act), the Bipartisan Innovation Act, Biden’s now-underway “Whole-of-Government” domestic forever wars and much else from the past few years not only foster dependency, but also are transforming corporate America into the non-market, ESG/woke amalgam undermining the nation and normalcy even now.

These excesses call for far more than mere Administrative State regulatory reform. Congress does not possess a “general power of legislation” to inflict all this madness, but rather what James Madison called a defined and “limited one.” Americans that failed to stop the cosmic horrors of the Progressives’ income tax and Federal Reserve in 1913 now find themselves at an even more odious inflection. Even libertarians have got to pay drug-free attention here: This isn’t a case of, “We’ll get ‘em in 2022 or 2024.” Republicans enable this stuff.

Americans need to re-codify what one colonial called the “silken bands of mild government” before the next inevitable crisis and the attendant artificially induced economic and social shocks. So here’s some framing:

First, the basics: “Title I,” let’s call it, deepens the classical liberal or libertarian movement’s call for root-and-branch regulatory liberalization and phase-out of the Administrative State, including a regulatory reduction commission; ending the abuse of guidance documents, memoranda and other regulatory dark matter; and chartering an “Office of No” to systematically excise progressive governance in economic, social and environmental schemes. These and other maneuvers require not just hearings but standing new committees; Today, the Senate’s only regulatory oversight committee is named for the misbegotten Department of Homeland Security.

A couple cautions here: regulatory cuts are no match for lockdown and supply chain mutilation. These latter require only police power, not bureaucracy and public notice-and-comment procedures. Also, in crisis we get not actual deregulation even when some hopefuls call for it, but the easing of red tape for tapping and expanding government programs. That makes government even harder to unwind later.

Title II calls for fostering household intergenerational wealth rather than intergenerational government debt, and ending custodial Helicopter Government. One version of the social contract nurtures individual and business self-reliance and resilience. Another fosters dependency, rent-seeking, and an unlimited state.

The left’s North Star for its “Reset” scheme is the Universal Basic Income. The UBI wields massive gravitational force, seducing libertarians and Elon Musk types alike. I regard the UBI as the Plural of Apocalypse, the crowning fusion of social and economic regulation at the micro level, capable of shredding the social contract and ruling out limited government altogether. The shift from “flatten the curve” to staying closed entirely in 2020 exposed the social architects’ pursuit of these permanent payments: The supplemental unemployment package that left jobs unfilled; the closed schools; the prepaid child tax credits; and payments to all regardless of need—all reeked of UBI ambitions. So, too, do recent pressures for gas price stimulus and a central bank digital currency to make future stimulus instantaneous.

Alongside fostering doomsday prepping, hoarding and stockpiling, alternatives to reflexive UBI-oriented stimulus that much be incorporated into the Abuse-of-Crisis Prevention Act include innovations in private unemployment insurance; the separation of employee benefit packages from both state and workplace; and the retention of personal wealth untouchable by D.C. operatives.

With respect to the latter, the federal tax code must allow Americans to amass several years of median income to tap in emergencies or charitably for others, convertible to retirement. Ideally, there should be no household income taxes during the interim. Surprisingly, elements of this were contained in the CARES Act’s “special distribution options” without tax penalty. The larger step is replacing Social Security for newborns with parental down payments or benefactor contributions that start compounding immediately. Progressives pursue the opposite—wealth taxes to fund Reset, which as University of Chicago economist Casey Mulligan has pointed out, creates non-self-sustaining households with kids by dispensing largesse so long as the head stays single.

A government relied upon for such basic needs is by definition not a limited one. My Dad grew up in a house with no toilet; I and probably many readers grew up without air conditioning. Yes, we can debate relative wealth inequality; but abuse-of-crisis prevention recognizes that the poorest have more than the well-off of 50 years ago, and that blurring luxury with 2000-calorie-necessity is yet another strategic avenue of crisis abuse and expanded state power.

Alongside dependency, submission to medical tyranny, lockdown and surveillance have been normalized globally. Yes, virus brings social costs and is a public health crisis: But treatments, personal responsibility and plain honesty and a tamping down of hysteria for a change allow some “privatization” to aid the most vulnerable without shutdowns or trillions. Passivity here has brought the term “climate lockdown” into the lexicon, with the World Economic Forum hailing an “independent carbon footprint tracker” and the journal Nature declaring all of us “prepared to accept … tracking and limitations.”

In this vein, the left wants to regulate digital currency precisely because it would enable institutions and people escape their helicopter-government abuse. Canada’s orders to freeze bank accounts of civil-liberties protesters and Dutch police firings upon farmer protestors serve fair warning regarding the authorities intolerance of dissent.

Title III entails fostering business and corporate prepping to prevent rent-seeking and to forestall flash-policy abuse. Does a few weeks of business disruption really destroy major corporations? Vulnerable restaurants and bars were one thing, but the richest entities on the planet ought to be flush with reserves. Instead, the earliest days of Covid saw bailout appeals from the Chamber of Commerce and corporate America awarded federal loan guarantees. It was known ahead of time that assets do not evaporate even upon bankruptcy, meaning bailouts help shareholders and creditors more than employees.

Washington seized vital market functions at bipartisan instigation, with the Federal Reserve allocating capital not just via its traditional loans to banks, but by picking winners with loans to individual businesses. When Washington embeds itself so deeply in economic affairs, its machinations stop being recognized as a form of regulation, their presence indistinct in the Federal Register. It would take obliterating mountains of legacy regulations, which never occurs, to offset the episodes of top-down replacement of free enterprise that emerge during crisis exploitation.

Well-connected persons and organizations in no distress tapped and depleted relief funds. Overpayments and fraud were rampant. Echoing the UBI, loan forgiveness was granted even to businesses able to repay.

Big tech and big box stores weathered arbitrary lockdown thanks to positioning or being deemed essential. Forty-five of the 50 biggest companies posted profits, while billionaire wealth set records. Every business deserves the best chance to thrive, which means not unfairly disadvantaging some. Today’s supply chain crises and permitting debacles show that everybody was and remains essential.

So, among the lessons: We now know that “reasonable needs” for income tax retained earnings policy emphatically include the ability to weather recurring crises. Cash reserve set-asides of at least two years of operating expenses could serve as a shock fund, with provisions for operations.

Amassing reserves will also improve companies’ bargaining positions with insurers over crisis disruptions; Such innovations are yet another necessity of emergency reforms. During Covid, the trial bar sought to sue hand-sanitizer makers and hospitals, such that lawmakers sought retroactive liability protections for reopening businesses and schools. Such protection can make sense, but broad indemnification (something also proposed back during 9/11) would destroy resilience and no nation possesses the restraint to do it properly. Quite the opposite; we saw Lloyd’s of London’s call for taxpayer-backed “black swan” business insurance. No thanks. Insurance is itself a form of wealth, requiring competitive processes and evolving relationships to expand availability, particularly in emergent sectors where expectation of bailouts will destroy capitalism before it starts.

The prospering of so many during Covid indicates that, barring an EMP, mega-risk is insurable. Note however that a radical proposal from the Securities Exchange Commission to spin wheels on regulatory compliance related to phantom climate risks shows how far we have to go in disciplining crisis exploitation and policymakers’ regulatory malfeasance.

Title IV would restrict emergency declarations, such as the Defense Production Act’s repeated bungled central planning of hand sanitizer, ventilators and baby formula. Another step here would include passage of Sen. Mike Lee’s ARTICLE ONE Act, which would amend the National Emergency Act to force Congress to vote to extend emergency declarations beyond 30 days.

Mandate mania also must be confined. It’s not just that a 50-year-old law was too tenuous for OSHA to tie a vaccine mandate; it’s that Congress didn’t have such power either.

Conversely, emergency capabilities to de-regulate and confine Washington and state and local despots into little boxes should expand. An Arizona Senate bill would lock government down instead of the public by prohibiting mayors from closing businesses during an emergency. We might allow an exception for the Captain Trips contagion Stephen King wrote about in The Stand; but by that point no structured society remains. Related teachable moves include state barring of vaccine and mask mandates.

Unfortunately, the potential virtue of normal reliance on emergency powers by a civilized society has been rendered impossible by Reset and “build back better” zeal and corruption. Even Trump unleashed pen-and-phone executive actions with a payroll tax holiday, extended unemployment benefits, deferred student loan payments, and the infamous eviction moratorium.

Instead, we must end radioactive emergency powers in the first place. Perhaps a future, less unhinged and less immature polity can restore them

Title V would, at long last, fulfill state sovereignty, making sharp distinctions between federal and state duties in funding and disaster preparedness. What prevailed during COVID was a federal and state intertwining that left ample room for blame and confusion. Regardless, the federal government wound up footing the bill for lockdowns that states themselves imposed; and those funds went not solely to COVID relief but to rescue state budgets.

The solution, mirroring household and business resilience, is to leave trillions in the states to facilitate their own Rainy-Year Funds. Even before Covid, Washington picked up a third of total state spending. What had been 100 grants-in-Aid programs under Lyndon Johnson exploded to over 1200, costing $750 billion, even pre-pandemic. Whether funding education, emergency management, infrastructure, transportation, income payments, job training, or social services, there is no call for a make-work orbit of local taxpayers’ funds around the Beltway.

Spendthrift states’ self-inflicted financial problems should be disqualifications for aid, not justifications. Like Washington, states need to axe redundant services, eliminate prevailing wage requirements in contracting, end defined benefit pensions, and so forth.

Here too it’s important to limit expectations regarding federal and state stockpiles. The Food and Drug Administration’s National Strategic Stockpile, for example, was never intended to support every state at once and optimal inventories remain muddled. Stockpiles of masks, ventilators and mobile beds seem obvious; Some might add baby formula, popcorn, tampons and peanut butter.

Other extensive restorations of sovereignty are vital too, such as returning federal lands and decisions over resources therein to the states. That would forestall, for example, Biden’s manipulation of energy markets now.

Title VI entails discipline and punishment of policymakers. The exploitation of misfortune to escalate federal power beyond constitutional reason must have consequences, or policy makers will do exactly the same thing again when the next crisis erupts. If limited government is to survive, there are crazes we simply cannot legitimately elect representatives to inflict upon our countrymen (more recently, think Disinformation Governance Board).

Resilience is essential. What we have instead are the “Whole-of-Government” regulatory transformations we see before us backed by a militant progressive surveillance, censorship and homeland security state.

So, discipline. The penalties for violating vax mandates and lockdowns could instead have been penalties for imposing them. The libertarian and classical liberal movement has to get their act together on the legitimacy of organized retaliatory self-defense, and confront usurpation and tyranny with zeal exceeding those inflicting them even now.

Otherwise, the corrupt interventions undertaken to allegedly relieve crisis will be root causes of the next one. We must make it uncomfortable to engage in political predation and exploit crisis. The left, after all, cannot wait to censure and punish the right, such as those it now pretends consider climate criminals or health mis-informers.

Dissertations could be written regarding the six legislative “titles” covered above; I’d add more, such as a constitutional amendment banning the federal corporate subsidies that date back to Henry Clay’s “American Plan,” now re-energized by the Bipartisan Infrastructure Plan and the so-called “Bipartisan Innovation Act” now in conference. These unfortunate new measures will be to blame for short- and long-term distortion of free enterprise and economic damage.

Betsy Ross flag painted by Claudia Crews; Cody, Virginia.

Photo by Clyde Wayne Crews Jr.

In the same way that the left has creatively built upon prior legislative successes to realize its vision of an unbounded state that the GOP helps them sustain, a long game is required to undo it. Competitive Enterprise Institute founder Fred L. Smith Jr. always says that pruned weed is a healthy weed.

Perhaps an Abuse-of-Crisis Prevention Act can help pull roots and plant a Tree of Liberty. Future generations will have their own crises to confront, without being saddled the burdens of oppresors’ artificially inflicted ones.

The author’s new report is “The Case for Letting Crises Go to Waste: How an ‘Abuse-of-Crisis Prevention Act’ Can Help Rein in Runaway Government Growth.”

Source: https://www.forbes.com/sites/waynecrews/2022/07/07/framing-an-abuse-of-crisis-prevention-act-to-confine-the-federal-government/