Dumb Ways (for an Economy) to Die

[Doug French is coauthor of this piece]

A viral video from Australia, complete with a clever song and dance step, describes the many dumb things people do that threaten and extinguish their lives. “Dumb Ways to Die” includes warnings against selling both your kidneys on the Internet, getting toast out of the toaster with a fork, eating a two-week-old unrefrigerated pie, and so on.

In a similar way, there are many dumb ways to kill an economy. Over the last five years, the federal government seems to have set the record for attempting as many as possible in record time. Then we look at growth rates and wonder why they are so anemic, why our kids can’t get jobs, why sector after sector seems to be crumbling, and why so many people are looking abroad for opportunity.

Stimulate Failing Sectors. The crash of 2008 exposed gigantic investment errors goaded on by previous bad Fed policy. The market tried so hard to make things right. But the Fed, the Treasury, and every living government official fought the entire way, with TARP, QE, ZIRP, Operation Twist, bankruptcy protections, debt creation, and many trillions of dollars in squandered wealth. And for what? To save the housing, banking, and financial sectors from the consequences of their errors. But the errors haven’t gone away. The sectors haven’t been stimulated. The net effect has been to ratchet down wealth creation, and so it will be until the stimulators stop diverting wealth and start facing up to reality.

Protect Against Imports and Exports. “Economic patriotism” is one of the most dangerous phrases in the English language. It means using the taxes called tariffs and quotas to prop up economically inefficient industries in our borders and failing to allow consumers to get the best deal whenever they can find it. Obama brags: “We’ve brought twice as many cases against unfair trading practices than the previous administration and we’ve won every single one that’s been decided.” The archetype case concerns China. You are paying more for lower-quality tires due to this intervention, at an estimated cost to consumers of $1.1 billion. The goal of energy independence is a bad one because it diverts production from efficient to inefficient technologies. Protectionism (and we have it for thousands of goods such as sugar, cheese, and ball bearings) is for losers. The belligerence against China is harmful. The sanctions against Iran and a dozen other countries are stupid. The U.S. economy needs to embrace the global economy, or else it will die alone.

Regulate Everything. In the name of health, safety, the environment, and intellectual property enforcement, nothing that exists has been left outside regulatory management. Each day, an average of 68 new regulations appear, giving bureaucrats the opportunity for endless meddling and harassment, and shutting down entrepreneurial ideas. Every machine in your home has been forcibly degraded, from your toilets to your washing machines to your soap. We can’t kill bugs in or out of our homes. Lawn equipment is wonky now, thanks to the regulatory tsunami. IP enforcement through patents and copyrights has slowed the pace of development of media, software, and industrial machinery. Enterprise lives in a cage and still somehow manages to stay alive. But what are we missing as a result? That’s the great unknown.

Kill Cars and the Gas That Runs Them. American cars used to be cool, even amazing. Now the new cars all look alike, like in the old East Germany. The central plan has done this through “Corporate Average Fuel Economy” standards that have forced cars to take a certain shape unless they can be redefined as light trucks. Then there are the extremely weird regulations on pedestrian impact. As a result, the vehicles on the road look boxy and boring or seem big enough to transport the high school band. This is why the only good-looking cars in the new models are hybrids: Only the mix of electricity and gas gets around the regs. And speaking of gasoline, 40% of America’s corn crop is burned up in our tanks (thanks to ethanol regs since 2008), and then it leaves residue that degrades engine quality. And we wonder why the American car industry is being creamed.

Save the Banks. Few remember that then-Treasury Secretary Hank Paulson’s first plan as the financial system melted down was to have the Treasury buy $700 billion in bad assets from the banks. That would not have been enough. Banking is a leveraged business. What the system really needed was capital injections. Thus, the birth of TARP and so many other programs. It was all designed so that we could go to our ATM machines and have money come out. The problem is that the whole system is unsound. If the banks had been allowed to fail, a banking system would reemerge that is sounder and less likely to create the booms and busts that continuously rock the U.S. economy. Instead, the banks live on, getting bigger and more unstable all the time. The latest estimates guess that TARP will cost taxpayers $65 billion. That’s nothing compared with the coming costs of sustaining this dinosaur industry that is so easily replaceable in the digital age.

Raise the Minimum Wage. It’s tough enough for young people and unskilled workers to find gainful employment. Legislators have had make it impossible for some by pricing this labor out of the market. Gas stations used to have attendants, typically young men. They would pump your gas, check your oil, and fill your tires. With labor price control, technology had to replace labor (except in attendant-mandatory states like New Jersey). Grocery stores are going the same way. The unemployment rate for workers under 25 years old is 16%, more than double the overall rate. It’s no wonder the minimum wage has been hiked three times since 2006 by a whopping 41%. On top of the federal requirements, some states like Nevada and California have higher rates. Indexed to inflation, the minimum wage is 50 cents higher in Nevada, and in San Francisco, the minimum jumps to $10.55 this New Year’s Day. Youth unemployment in California has grown 35% since 2000. Unemployment among young people in Nevada is 27%. The young should blame their rulers for this calamity.

Soak the Rich. The war on the rich is completely out of hand, so much so that no one dares state what everyone once knew: The rich are our benefactors. They give most of the donations to philanthropy. They start the new businesses. They provide the capital. They most often have the good ideas. Their consumption habits provide a testing ground for innovations before they reach the rest of us. Yes, there are some sectors of the rich who become that way at others’ expense, but that is still the exception, rather than the rule. But don’t the rich need to be looted to pay for the debt Congress has run up? Doing so would fund the government for about 10 seconds. No, the real driving motivation behind the campaign against the rich is plain old envy. Envy is a bad habit of heart, one that will kill prosperity dead if it is unleashed in public policy.

Start a War. It was bad enough that the Bush-era wars have been sustained, maintained, and even entrenched in the Obama era. The war hawks seem to be on the lookout for other countries that the U.S. military can muscle and invade, with Iran topping the list. The U.S. military is outrageous bloated. The U.S. spends 800% more than Russia, the next-highest spender on the planet. The military budget is 15 times that of Japan, 47 times that of Israel, and 73 times that of Iran, according to many reports. It has doubled over the last 10 years. To maintain that kind of bloat, you have to whip up the population in periodic frenzies about witches abroad that need to be burned. From an economic point of view, this is catastrophic, throwing good money after bad and killing people in the process. Yes there are winners: the military-industrial complex. But the profitability of DynCorp, ManTech, Textron, Honeywell, and Northrop Grumman is not authentically based on consumer demand; these companies are private in name only.

Confiscate Private Property. The war on drugs has turned into a war on private property and private citizens. In most states, if you are stopped by law enforcement, your car may be searched, and any item suspected to be involved in the drug trade may be confiscated. Cash is the primary item local law enforcement agencies are looking for. Carrying a large amount of cash in your car, instead of having it in the bank is thought to be suspicious. These asset seizures are all an attempt to pay for the prison industrial state that has nearly 2.5 million people behind bars. It’s impossible for taxes to foot the bill for all this policing. Now cops on the beat have turned into pirates seeking booty on the streets. Investigating murders and rapes doesn’t pay the bills anymore. And stopping the inflow of drugs is the last thing on their minds. They just want the money.

Socialize Health Care. There is nothing more dastardly than ruining the ability for people to get medical care. It is a life-and-death matter. To destroy the market mechanism of property and prices is to destroy economic rationality, with the result being poverty, chaos, sickness and death. Ludwig von Mises wrote in 1922 that to socialize health care was the equivalent of placing this vital service in the hands of the army or prisons, centers of disease and disaster, not health and well-being. Americans complain about health care in this country and agitate for socialized care, when, in fact, 29% of American adults get their health care from Uncle Sam. Three-quarters of those over 65 years old depend on the government for medical care. Medical care is a scarce good. It must either be allocated by force or voluntarily at a cost of either time, money, or both. The price system in health care has been destroyed by government force, making health care unobtainable for millions.

Kick Out the Immigrants. Immigrants have been demonized for decades. The Irish used to be lazy drunks. Now it’s Latinos. A strange brew of political bedfellows — the nativist right and environmental left — seek to shut the borders. But the facts prove that immigrants make us much better off. Immigrants are more likely to save and start businesses. They don’t steal jobs from Americans; they create new jobs and do work natives don’t want to do. The beauty of (especially) illegal immigrants is that they respond to the business cycle by arriving when work needs to be done and being flexible enough to go where the jobs are. In my own home state, the immigrants are sustaining much of the economy. By the way, the cost to keep immigrants out is billions of dollars and doesn’t begin to pay the “supposed” costs that immigrants impose.

Abolish Interest Rates. Since 2008, the Fed has decided to go after natural law itself by using its power to impose a policy of zero interest rates. Problem: You can’t earn money by saving anymore. That’s seriously awful, since saving is the basis of investment and growth. Another problem: Banks can’t earn money by normal lending anymore. That’s just extremely strange. Banks, instead, are learning to live on the income stream that comes from keeping their deposits at the Fed, playing the derivatives market, and selling inflated debt securities. This is one step short of nationalization, but it is far from normal banking. Then there are the private-sector lending institutions that are completely ignoring the yield curve and getting normal market returns. But this private sector is seriously hindered by regulations and the money monopoly. The result: a broken banking system that has no conventional way to fix itself.

Look at this list of dumb ways to kill an economy. It is a stunning tribute to the private sector and the power of enterprise that we manage to grow and still somewhat prosperous, regardless of this relentless beating.

And we wonder what’s happened. We wonder why capital is fleeing, why people are leaving, why wealth is not being created, why growth is anemic. This is not a reality built into some kind of civilizational way or some inexplicable great stagnation. It is all a direct result of a conscious decision to wreck the machinery of freedom. It’s dumb.


Douglas French

Jeffrey Tucker

Written By Jeffrey Tucker

I'm executive editor of Laissez Faire Books and the Chief Liberty Officer of Liberty.me, an innovative private society for publishing, learning, and networking. I'm the author of four books in the field of economics and one on early music. My personal twitter account @jeffreyatucker FB is @jeffrey.albert.tucker Plain old email is tucker@liberty.me

  • shutterstock_258312164

    Your One-Stop Guide to the Global Currency Reset

    James Rickards

    by James Rickards
    On Oct 6, 2015

    Preparation Is Already Underway for the Next Financial Crisis

    In the six months between March and September 2016, a major event is going to take place in global currency markets.

    When it occurs, the International Monetary Fund (IMF) is going to create a new version of their special drawing right (SDR), which will function as the world’s reserve currency. Read on...


  • Go Local: "Pollinators" to Save Main Street

    Go Local: “Pollinators” to Save Main Street

    Chris Campbell

    by Chris Campbell
    On Sep 28, 2015

    An invasive species has infiltrated your hometown. The only way to fight it is to become a "pollinator." Learn how...

  • Hillbillies, Ancient Egypt, and the Great Depression

    Hillbillies, Ancient Egypt, and the Great Depression

    Chris Campbell

    by Chris Campbell
    On Apr 7, 2015

    Did the Beverly Hillbillies predict the monetary crisis? What does Ireland's potato famine have to do with the collapse of the dollar? How did Joseph really save the Egyptians before the "Seven Lean Years"? Read on...

  • PREDICTION: Asian Contagion and the Coming Market Meltdown

    PREDICTION: Asian Contagion and the Coming Market Meltdown

    Chris Campbell

    by Chris Campbell
    On Jan 14, 2015

    Yes, we have a lot of fun in our episodes of LFT. But sometimes we have to get back to our basics. And embrace a little… let’s call it ‘wariness’… in order to protect what’s ours. And, of course, help you do the same. Read on…

  • Open Windows of Opportunity With Jim Rickards

    Open Windows of Opportunity With Jim Rickards

    James Rickards

    by James Rickards
    On Nov 14, 2014

    Are you a deflationist? Or an inflationist? No matter which way you believe the wind will blow, the truth is this: it’s up in the air. But, as Jim Rickards explains, there are things you can do to cover your assets, no matter which one wins the tug-of-war. Read on…

  • shutterstock_258312164

    Lunch With a Skeptical Economist

    Doug Hill

    by Doug Hill
    On Oct 6, 2015

    A Note From The Club Director

    Your club director went to the ends of the Earth to bring you this month’s inane rambling. While we didn’t quite peer over the edge, we got pretty damn close.

    Where the Heck is Gorham, Maine?

    Late one recent Thursday afternoon, we found ourself sharing a bottle of wine with a dry-humored French fellow who just so happens to run Laissez Faire’s Book Club. Read on...


  • Vote for Nobody, and Don’t Buy Gold - You Have Better Things to Do

    Vote for Nobody, and Don’t Buy Gold – You Have Better Things to Do

    Chris Campbell

    by Chris Campbell
    On Nov 4, 2014

    There are two things you shouldn’t do this Election Day: one, vote; two, buy gold. Why? Chris Campbell explores this and more in today’s Laissez Faire Today. Read on…

  • Washington’s Secret Slave Labor Ring: Coming to a Neighborhood Near You

    Washington’s Secret Slave Labor Ring: Coming to a Neighborhood Near You

    Chris Campbell

    by Chris Campbell
    On Sep 26, 2014

    America has about 4% of the world’s population, yet houses 25% of the world’s incarcerated. What’s going on here? Chris Campbell digs deep into the industry to figure out the truth. While many blame the private prison industry, the real culprit, says Chris, begins right outside your door. Read on…

  • The Other Epidemic (and How to Stop it)

    The Other Epidemic (and How to Stop it)

    Chris Campbell

    by Chris Campbell
    On Sep 16, 2014

    “While I heartily subscribe to your premise of pursuing one’s dream,” one reader, Donald J., wrote, “there are alternate perspectives worth considering.”[We’re listening… go on.]“Some wiseguy once said that life is what happens to you while you’re waiting for something better to come along. Milton put it a little more poetically in one of his […]

  • The Only Way to Get Rich: A Zen Proverb

    The Only Way to Get Rich: A Zen Proverb

    Chris Campbell

    by Chris Campbell
    On Sep 10, 2014

    Want to get rich? Don’t listen to financial “gurus,” says Chris Campbell. In today’s Laissez Faire Today, Chris shares a Zen proverb and shows how understanding it is the only real way to get rich (and live a rich life). Read on…

  • shutterstock_77653948

    Paging Patch Adams

    Jud Anglin

    by Jud Anglin
    On Oct 6, 2015

    Receive Faster, Superior Care at Hospitals and Emergency Rooms With These Online Services

    The experience of having to go to hospital or an emergency room (ER) is stressful enough.

    Unfortunately, due to an overburdened health care system, hospitals and ERs in the U. Read on...


  • HappyFamily

    One Free Website to Keep Your Family Safe

    Chris Campbell

    by Chris Campbell
    On Sep 9, 2014

    Ben Franklin once said, “An ounce of prevention is worth a pound of cure.” In today’s Laissez Faire Today, you’ll learn about one FREE website that has the potential to not only keep your family safe – but also open your eyes to what’s happening in your own neighborhood. Chris Campbell has all the details. Read on…

  • Youre_Incredible

    Use “Power Gaps” to Build Your Own Empire

    Chris Campbell

    by Chris Campbell
    On Sep 8, 2014

    All over the world, power is dying. The dictators and tyrants of the world are no longer able to wield it like they once used to. And they’re losing it to the “little guy.” Chris Campbell shows you how to be the king of your castle by taking advantage of this fact. Today, you’ll learn how to grab “power gaps” in the market and channel them into your product idea or project. Read on…

  • Free Markets and Malaysian Fireflies

    Free Markets and Malaysian Fireflies

    Chris Campbell

    by Chris Campbell
    On Sep 3, 2014

    The fireflies along the tidal rivers of Malaysia show "feats of synchrony that occur spontaneously, almost as if nature has an eerie yearning for order." Chris Campbell tells you where else this might occur in the world. Also, new technology may revolutionize the agriculture industry and what we think of as a farm.

  • Smoking Pot in the Governor’s Mansion

    Smoking Pot in the Governor’s Mansion

    Chris Campbell

    by Chris Campbell
    On Sep 2, 2014

    Jeff Davis is running for Governor in Hawaii and has an interesting campaign strategy. Also, what motivates hackers is revealed and the findings might surprise you. Finally, Ferguson is discussed in a new light. Chris Campbell has more...

  • The End of Money

    The End of Money

    Bill Bonner

    by Bill Bonner
    On Aug 22, 2014

    When the government pumps trillions of dollars into the economy, they’re not actually printing the money. It enters as digital entries in banks across the country. It’s made the system fast, responsive, and, unfortunately, vulnerable. Now our money is no longer something we hold in our hands, but something that exists on a very susceptible network.

    An article in , ,

  • 4 Ways the Government Is Set to Take Your Money

    4 Ways the Government Is Set to Take Your Money

    Byron King

    by Byron King
    On Aug 21, 2014

    The so-called recovery is only built on debt and printed cash declares our own Byron King. In the long term, the only option for the government to continue financing it's operations is to print too many dollars. Money printing has it's limits, however. It's Byron's opinion that at some point, perhaps very soon, the government will have to turn to more desperate measures. Namely, capital controls. In the following featured essay, Byron outlines 4 probably ways the government will take your cash and one play you can buy through your broker to prepare today. Read on...

  • America Needs More Tax Inversion

    America Needs More Tax Inversion

    Clem Chambers

    by Clem Chambers
    On Aug 20, 2014

    Americans expatriate because they want to get out of the country. Corporations expatriate for similar reasons. Clem Chambers explains...

    An article in ,

  • Central Planning by Central Bankers

    Central Planning by Central Bankers

    Gary North

    by Gary North
    On Aug 15, 2014

    In a 2009 article, the Huffington Post went into considerable detail about the number of people with PhD degrees in economics employed by the Board of Governors of the Federal Reserve System. This is the government’s branch of the Federal Reserve. It is not one of the 12 regional Federal Reserve banks, all of which […]

  • 6 Major Flaws in the Fed’s Economic Mode

    6 Major Flaws in the Fed’s Economic Mode

    James Rickards

    by James Rickards
    On Aug 12, 2014

    The U.S. dollar is the dominant global reserve currency. All markets, including stocks, bonds, commodities, and foreign exchange are affected by the value of the dollar.The value of the dollar, in effect, its “price” is determined by interest rates. When the Federal Reserve manipulates interest rates, it is manipulating, and therefore distorting, every market in […]

  • How to Die Poor

    How to Die Poor

    Bill Bonner

    by Bill Bonner
    On Aug 8, 2014

    The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance or the get-rich-quick adventurer. They will die poor.– Jesse Livermore, How to Trade in StocksThe trouble with capitalism’s guardians is that they have no […]

    An article in , ,

  • Will Mandates for Doctors Come Next?

    Will Mandates for Doctors Come Next?

    Barton Hinkle

    by A. Barton Hinkle
    On Aug 6, 2014

    John Foust, a Democrat running for the 10th congressional seat in Northern Virginia, is — like Gov. Terry McAuliffe and other state Democrats — gung-ho to expand Medicaid. His wife’s position is, shall we say, a bit more nuanced.Foust has slammed his opponent, Republican Del. Barbara Comstock, for her opposition to expansion. He has spoken […]

    An article in , ,

  • No Matter Who Wins, a Sociopath Is Elected

    No Matter Who Wins, a Sociopath Is Elected

    Doug French

    by Doug French
    On Aug 5, 2014

    The midterm election season is upon us, and it’s a tossup whether the Republicans will win the Senate, or if President Obama, seemingly oblivious as conflict flares up around the world, will, through his continuous campaigning, keep Harry Reid in his majority leader seat.The only thing we know for sure is that sociopaths will be […]

    An article in ,

  • Linking The Dollar To Gold: The Recipe for an American Economic Boom: Part 1

    Linking The Dollar To Gold: The Recipe for an American Economic Boom

    Peter Ferrara

    by Peter Ferrara
    On Aug 4, 2014

    Alexander Hamilton was America’s first Secretary of Treasury under President George Washington. When he first entered office in 1789, America was an agricultural nation of just 4 million still broke from its financially costly victory over the British Empire in the Revolutionary War.The states had accumulated relatively massive debts to finance that war, which mostly […]

  • The Bitcoin Dinner Solution

    The Bitcoin Dinner Solution

    Jeffrey Tucker

    by Jeffrey Tucker
    On Jul 29, 2014

    A great technology solves a problem that we didn’t know we had. It makes us aware of deprivations we didn’t know existed until we discover the new thing. Once discovered, we can’t go back.People in the 1950s, for example, never missed the smart phone. They were pleased to have a phone at all. But today, […]

  • Advance Notice of the Next Market Crash

    Advance Notice of the Next Market Crash

    Chris Mayer

    by Chris Mayer
    On Jul 28, 2014

    Fifty years after the 1929 crash, a group of money managers and investment thinkers put together a collection of essays looking back at that experience. The result was a distillation of some pretty fine investment wisdom. Timely, I think, to review now.One of the contributors was Arthur Zeikel, then with Merrill Lynch. The title of […]

    An article in ,

  • Obamacare… A Caring Solution for Opting Out

    Obamacare… A Caring Solution for Opting Out

    Jud Anglin

    by Jud Anglin
    On Jul 25, 2014

    Although the mainstream media have turned its attention away from the wreckage of Obamacare, don’t think for a second that all is well.As the politicos in D.C. focus their attention on the midterm elections in November, now is a great time to study, prepare, and seek out the most affordable, accessible, and highest quality options […]

  • The Battle Against Economic Stupidity

    The Battle Against Economic Stupidity

    Doug French

    by Doug French
    On Jul 24, 2014

    Turn on the tube and economic ignorance seems to be everywhere. There is constant shilling for more government. Business is demonized. Man is said to be trashing the environment. “Workers and women are oppressed” is the constant mantra.And members of the clueless media nod their heads in unison.Only John Stossel has provided the fresh air […]