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The Small Wealth Initiative
This primary season may be the most tumultuous and unpredictable in at least half a century. Instability opens doors to new ideas or re-opens the door to ideas that have been discussed but never tried.
A substantial portion of the electorate is seriously considering hard socialism on the left and protectionist corporatism on the right. Each is a recipe for economic stagnation and potentially depression. Worse still, each side views government as a solution rather than an impediment.
Let’s try to convey a radical free-market approach that brings benefits to the general populace first rather than in some abstract, delayed, “trickle-down” manner. I would like to brand something I call the small wealth initiative. It is a simple economic plan intended to put average people to work, give them hope, give them a stake in the economic system, and open their minds to the realities and benefits of a market economy.
The small wealth initiative proposes simple unleashing of the capitalistic urges of people of any income by getting the government out of the way of the average citizen. Here are three proposals to start:
1) Zero minimum wage: Give municipalities the option to remove any minimum wage restrictions set at the state or federal level. Zero minimum wage should be pitched as the opportunity for a low-skilled person to compete on wage. Essentially, a minimum wage tells a low-skilled worker that he is not allowed to work. The elimination of any minimum is something any unemployed person should want. Furthermore, anyone growing a business benefits by having a much larger pool of applicants. Everyone wins. There is only economic gain since a current minimum wage is only earned by people who are worth it. The global effect of business formation and skill attainment would provide an immediate economic boon to even the poorest neighborhood.
2) Zero taxation of interest and dividend income up to at least $5000: Give everyone a stake in the system by allowing people to grow their wealth. The hard truth is that the after-tax interest earned on the average savings account is generally less than inflation — making regular savings a drain on wealth instead of an accumulator of it. Those drawn to leftism look first to handouts. They have no stake in the system. They also see wealth as something other people have that the government should confiscate. Zero-interest taxation can rapidly change minds as people learn that money can grow and saving is rewarded. This initiative will substantially increase the savings rate of lower income people and give them a positive view of private wealth accumulation. In turn, these savers can pass along the concept of thrift to their children.
3) Minimal licensing: As long as someone offering a service does not mislead consumers about credentials, there is a huge range of services and products that can be sold with absolutely no regulation whatsoever. A few services that come to mind are hair and nail salons, cleaning clothes, shoe shining, maid and nanny services, garbage removal, taxis, physical fitness training, and many more. As long as there is no false claim of a degree or other credential the simple rule is buyer beware. Municipalities should allow free competition in a large variety of services.
The objective of these policies is to reward work and savings immediately. Such a policy approach also has a dramatic cultural impact by reducing idleness and hopelessness – the primary motivators of crime and mischief and leftism.
Published in Domestic Policy, Economics, Education, General
This is not novel, although it is well-presented in a pared-down selection of fiscal conservative options.
The problem is not in the idea, but in the accomplishment. Who shall bell this cat, then? Your argument is not with the conservatives who already view these as good things, but with the apathetic and statism masses who will not be convinced that somebody other than “society”, by which they mean government, is supposed to take care of them.
As far as the Good Fight goes, in trying to convince a razor-thin kingmaking segment of the population, that fight is well underway. You are right that much of the GOP sees it the wrong way, and is unwilling to engage in that good fight.
Hence the secondary battle raging now within the GOP to make it change or die.
This one also calls for a strongman national government to run roughshod over states and localities. It is part of the program of protectionist corporatism. I prefer a crazy patchwork of state and local regulation to save us from the increasing power of the national government.
Most of us here agree with all this. But let’s be clear, trickle down is a liberal criticism not some notion those of us who support markets embrace. Trickle down comes to us from Feudalism, in it’s modern form we might call Keynesian which is accounting at best and a symbiotic fraud when promoted by connected old business and the political class.
I think there are organizations, like the Institute for Justice, that in their own small way are belling various cats. While I’m hopeful about the work they do, it’ll take more than a few brave mice with tiny bells to make an impact the average person is likely to notice. For now, IJ and groups like it remain rather on the fringe.
I like number 2 the most. It might help “feel the bern” youth turn from socialism. People, in a modern economy, simply do not understand money, it’s value, how it is earned, and what savings is. At least if they start seeing a return on investment they can have a tangible product that helps counteract socialist propaganda.
Good proposals, but I am also with The Reticulator. If we could just return to our original Federalism much of this would sort itself out. Power attracts and so governments tend to centralize over time, I don’t know of any way short of calamity or violence for power to decentralize.
What about giving recent college graduate a set limit of a year or two of no income taxes to help pay back student loans instead of forgiveness that the left is preaching (or free).
Impressive and astute observation. I do believe Trump has the answer to dilemma #2 by insisting on fair trade i.e. no currency manipulation!
It might not be a bad idea, but the market could quickly reequilibrate to a higher cost, knowing that students could more easily pay back their loans. It would look good and fall in line with Republicans offering low/no taxation. It might grant a few voters, but it won’t work to reduce costs. I’m not sure how we should value the trade-off.
Currency manipulation is a famously nebulous concept. Is China’s currency currently over or under valued? I think you’d get a different answer from Kudlow and Pethokoukis, both contributors to this sight. And, if your go to action is to levy a 45% tariff I wouldn’t call you either free or fair trade. I’d call you suicidal.
Students are in college to get an education, aren’t they? Some are also there to get training that will serve them in life. Well, to train for life in obedience to the majesty of the state, they should pay double taxes. It will make it easier for them to pay regular taxes when practice is over and the real game starts.