The 2020s began horribly. Thanks to the exaggerated coronavirus pandemic, government blockages have led the economy into the most severe recession since the Great Depression. From February to April 2020, industrial production fell by 15.2 percent, while official unemployment rates soared from 3.5 to 14.7 percent. To present these figures in perspective, during the Great Recession, industrial production fell by a similar amount (17.3 percent) from December 2007 to June 2009, and the “only” unemployment rate reached 10 percent in October 2009. In other words, the current recession is breaking all the wrong records.
To prevent the complete destruction of the economy, the US government pursued a large-scale expansionist monetary and fiscal policy. From February to April, the Federal Reserve exploded its assets by $ 2.5 trillion and increased its money supply (M2) by 14.6 percent. From a financial point of view, in late March, Congress passed a $ 2 trillion stimulus law, and in mid-May, the chamber passed another $ 3 trillion stimulus law. Then, in early June, Fed Chairman Jerome Powell said that low interest rates would remain here indefinitely.
If current political and economic trends continue, the 2020s will usher in a new period of sharply increased government activity and economic regulation. Despite justification by the public interest and advanced modern “science”, these interventions promise to be thorough bosom friendThey will enrich privileged enterprises, politicians, bureaucrats, intellectuals and working groups at the expense of the general public. In short, the 2020 recession will usher in a new “progressive era” in the early 1900s, or rather another “regressive era.”
Murray Rothbard brilliantly showed that during the Progressive Era, which scholars and other interventionists praise as the nation’s first step towards modernity, big business, big government, big intelligentsia and big work managed to consolidate nepotism, thanks to which it was easier for corporations and trade associations to organize cartelizationfor politicians to increase their power, for technocrats to influence economic planning, and for unions to exclude cheaper immigrant workers. These groups failed to achieve their goals until the 1893 Panic allowed populist Democrats William Jennings Brian to oust Grover Cleveland. non-intervention Democrats who led to the political dominance of a moderate corporatist republican party. Unfortunately, it seems too likely that the federal government will now pass similar laws in the 2020s, such as corporate and safety regulations, environmental laws, social security, and other rights, as well as tax increases.
In the name of weakening trusts, eliminating “unsafe” products and cleaning up “poor-quality” working conditions, the progressives adopted a number of business rules that limited entry, reduced production and raised prices. Notable examples are the rejuvenation of the Sherman Antitrust Act of 1890, the creation of the Ministry of Trade and Labor in 1903 (divided into two departments in 1913), the Meat and Clean Food and Drug Administration Acts of 1906, and the creation of the Federal Trade Commission. Commission in 1914. These new clan laws and agencies blocked hostile socialist legislation, and also suppressed pressure on the free market, increasing the cost of compliance with new, usually smaller enterprises, and lowering the price and competition of products.
In the 2020s, similar rules for doing business are likely to appear. Even before the crisis, major technologies welcomed the new federal red tape via the Internet in order to strengthen their market position and prevent hostile antitrust lawsuits from radical socialists and competing enterprises. The current recession has already sparked calls for formal safety rules for the coronavirus in the workplace — the new “modern” age of federal, state, and local intervention between the employer and employee and how enterprises satisfy consumer desires. All these laws not only do not encourage competition and protect consumers, but simply divide sectors by sectors and increase the relative costs of compliance for small enterprises that cannot afford to re-equip their facilities in accordance with new technologies and security restrictions.
The progressive era has also witnessed the adoption of laws and environmental agencies. These measures, such as the Law on Land Reclamation of 1902 and the Commission on Public Lands and Inland Waterways (established in 1903 and 1907, respectively), sent taxpayer funds to research and develop certain methods of extraction of resources, in particular irrigation, while limiting the use of various raw materials such as wood. Although environmentalists advocated enacting these laws to preserve nature and promote “environmentally friendly” production processes, legislation raised the price of limited timber (in favor of land speculators and railways that owned competing supplies) and encouraged the uneconomical development of irrigation in the West.
The representative of Alexandria, Ocacio-Cortez, led the modern environmental movement for the Green New Deal, which will completely transform American society and significantly reduce welfare. This economic program, according to some estimates, can cost a truly staggering $ 93. trillion over the next decade, it will “save the planet” by radically limiting the use of fossil fuels (which most of the world relies on maintaining a modern standard of living), and will stimulate the production of environmentally friendly energy sources that supposedly make up for the deficit. After the recent crisis, proponents argue that the population is already numb to abrupt changes in living standards and, accordingly, will be more susceptible to the Green New Deal. If such a program is adopted, the government will select winners and losers in the energy market, as never before, and open a Pandora’s box with the widespread spread of nepotism and special interest subsidies.
In the early 1900s, the wise governing governments did not stop at corporate and environmental nepotism — they also cared for labor interests. In the 1910s, progressives adopted laws on mandatory compensation to employees at the state level, which forced enterprises and taxpayers to pump out funds for the welfare of workers. Following this, the federal government passed the Federal Employee Compensation Act of 1916 (also known as the Kern-McGillicuddy Act), which provided for compensation to federal employees. Taxpayer funds summarized the costs of disability insurance, and regulations increased the costs of complying with business requirements. The adoption of laws on workers’ compensation served as the starting point for the infamous Social Security Act of 1935.
Andrew Yang gained fame during the presidential democratic election by advocating for a “universal basic income” (UBI) of $ 1,000 per month. Luckily for Young the crisis has already led to the emergence of UBI through inspections of the incentives and generous unemployment benefits provided to displaced workersLawyers are now arguing about $ 2,000 a month until the government decides that the crisis with coronavirus is over. The results of this policy are already disastrous for the restoration of the labor market: a significant part of the workforce depends on the US government (that is, the taxpayer), and many small enterprises cannot hire workers because they will actually lower their salaries. A new era of wealth and artificially high labor costs has dawned on the nation.
To pay for the cronyism of the Progressive Era — legislation diligently enforced by bureaucrats, scientists, and technocrats seeking work — the progressives “reformed” government revenues by the Sixteenth Amendment of 1913, which legalized income tax. The federal government can now receive much more from taxpayers than was possible with tariffs and excise taxes. Initially, income tax applied only to the modern “1 percent,” but World War I extended government attacks on the rest of the population. This ensured that the cost of government was shifted to start-up entrepreneurs and the middle class.
A similar situation may arise during the current recession or at the end of the decade. The cost of current incentive programs and projected future legislation simply cannot be funded under the existing revenue system. One of the “solutions” is deficit monetization, a catastrophic option that can lead to rampant inflation. Another option is to impose taxes on wealth – a siren song for proponents of redistribution – on the richest members of society. Although lawyers argue that they will only apply to the most “privileged” strata, the state network will inevitably extend to the rest of the population. This is due to the fact that large enterprises will use their political influence to distribute the burden to the less well-off (after all, social security remains a regressive tax), and governments will use the new-found source of income to spend more than their original evaluation, and subsequently will require additional costs. for more money. Widespread wealth taxes will result in a sharp barrier to work, savings, and innovation to the detriment of society.
The results of the Progressive Era were not very pleasant, and this leads to ominous forecasts for the 2020s. Corrupt politicians will always use recessions, crises, and changing political landscapes to justify policies of special interest that provide benefits to their benefactors and voters at the expense of society at large. 2020 has already provided all three excuses, which means that we can go to another regressive era – a disaster to restore the economy and freedom of Americans.