to the editor from this week's Chronicle:
It’s Up to Idahoans to Ameliorate Government’s Heavy Hand
Guest Editorial by Lt. Gov. Janice McGeachin
As Lieutenant Governor, I am one heartbeat away from the governor’s chair. I am also a small business owner. My family and I own four small businesses in the restaurant and automotive industries, employing hundreds of Idahoans. As a former member of the Idaho House of Representatives, I represented a district in eastern Idaho for many years and was viewed as a champion of small businesses and entrepreneurs.
My reputation and current position has many constituents asking me why small businesses and entrepreneurs — who make up the backbone of Idaho’s economy — are largely underrepresented in the Governor’s coronavirus advisory committees, task forces, and economic reopening committees.
I lose sleep at night because the heavy hand of our government is hurting so many Idahoans. Idahoans were sidelined and left to watch silently as the government closed Main Street by unilaterally deciding which businesses were “essential” and which ones were not. By deciding that certain goods can only be purchased at certain places, or not at all, our government has been selecting economic winners and losers throughout this pandemic.
The effects of the executive branch’s unilateral decisions will impact us for years. Now we are being told that if we attempt to salvage our livelihood, if we attempt to open our businesses to put food on the table for our families, if we have the courage to “defy” the reopening plan our government imposed upon us, our business licenses will be at stake.
Now more than ever before, we are in a moment where political courage is mandated. We must not be afraid to stand up for all businesses large and small — including all of those thousands of businesses without a voice or a paid lobbyist. You can find those businesses on Main Street in every town in Idaho. We must stand up for the livelihoods of hardworking Idahoans. We must have the courage to tell it straight: Realistically, there is a segment of our population that will remain at risk during this pandemic and there may be a spike in COVID-19 cases as we reopen. I agree that we should do all that we can to protect our vulnerable citizens, as well as our frontline workers. But there are other facts to consider: This shutdown is taking a financial toll on Idahoans. Thousands of Idahoans still haven’t received unemployment or were denied SBA and PPP loans and grants. For some businesses which did receive a PPP loan, the government policy places the forgivable portion of those loans at risk. When these businesses are not permitted to open until mid-June at the earliest, it will be beyond the time limit required to tap into some of those funds, according to the US Treasury. With bills quickly mounting, and no income coming in, there has been a spike in bankruptcies, suicides, depression, and businesses that will never open again. We must begin to examine those facts — as well as the health care-related data the Governor is focused on — to properly evaluate how to move forward. I hope the Governor’s business task force will take all of these facts into consideration, not just the medical facts provided by cabinet members.
While most Idahoans supported the public safety aspect of the Governor’s Stay-At-Home Order, the one thing that is missing in all of this is the confidence that Idahoans are smart enough to put in place public health protocols so they can reopen their business, welcome customers, and take care of their employees. The Governor campaigned on a promise of imposing the “lightest hand of government” on Idahoans. To me, this means getting out of the way and letting Idahoans get back to work.
No. 264 - 5/18/2020
It's "Wrap up time!" Or so it is the intention of this review to close out the Corona topic which has been dominant here and definitely in the news the last couple of months. So following is a clarification, and a final comment concerning this topic before new ones in days to come!
First, a clarification! In last week's review, reference was made to John Maynard Keynes, his economic theories known as "Keynesian Economics," and the formula, MV=PO. A more detailed discussion would have noted that Keynes argument focuses primarily on FISCAL POLICY, which has to do with the ability of GOVERNMENT like our Federal one, to regulate economies by using available tools like bond sales and debt changes to avoid the highs and lows of recessions and inflation threatening booms. The reference to the equation MV=PO is more accurately traced to Milton Friedman who argued much the same as Keynes, though uses central banks like our Federal Reserve (FED) to adjust interest rates and other tools to also stimulate slowing economies and cool down inflationary ones. MONETARY POLICY is the name given to Friedman's theories and his use of MV=PO. But the important thing to note is that virtually all modern economies including ours use these two theories, convinced that the joint use of these GOVERNMENT and FED tools can regulate every economy to avoid the pain associated with downturns and the threats of inflationary highs.
The claim was made in Review 263, that this system was doomed from the start because of a "fatal flaw!" The flaw claimed, is that voters are willing to allow officials to do all they can to stop recessions, but human nature being what it is, elected officials are rarely going to take steps needed to slow down record breaking good times. We witnessed this tactic recently when the additional $9 trillion new dollars were injected into our economy to battle the Coronavirus. And Friedman's claim that added money "M" on the left side of his equation to stimulate production, the "O" on the right side, can also fail, because conditions like ours today cause people to stop or slow down spending, the velocity "V" decreases, or a production system like ours has been damaged enough to prevent increased "O" or output! Then inflation, prices, the "P," increases, a result of the increased "M."
The "final comment" mentioned above is simply this, that logic and common sense should tell anyone that flooding new money into any area is going to put pressure on prices, inflation is the normal result! Sure, recipients of that new money can hide it and refuse to spend it, but this is seldom the case. In earlier reviews, it has been asked what would happen to our local economy if a plane flying overhead would drop several million $100 bills, free to keep and spend by any fortunate enough to gather in several handfuls. What happens to the inventory of cars or other scarce goods in the area? Even Friedman admitted an increase in inflationary pressure by the "Helicopter Money" example of his proposed increase in "M" to spur lagging economies!
And long time readers of these reviews might remember the lessons history has to tell us! How Davy Crockett for example was embarrassed by voter Horatio Bunce who proved to him that government has no right to give away tax dollars because it was "Not Theirs to Give," and how it inevitably results in a "Reverse Robin Hood Effect!" - Some recipients of handouts are better off than many who paid the taxes given away! This has already happened with Carona grants! And what about Frederik Bastiat's " Legal Plunder" prediction 200+ years ago that government transfer from those who earned it to those who did not would grow until it threatened the very existence of the giving government? Or Professor Tyler's study of governments which give away generous gifts from the public treasury? Their average life expectancy? About 250 years! All examples studied above lead to debt, inflation and bankruptcy! Is that our American destiny?