The Preconditions of Life

An op-ed submitted to a local paper (don't look for it to be published):

The preconditions of any growing, healthy and stable economy are simple:

1. Capital, invested to create profitable systems of production which endure.

2. Certainty about the future.

3. Freedom to act

To become capital, money must be invested in creating self-sustaining machinery that will go on to make goods year in and year out. The machinery can be human (an organization) and the goods can be intellectual (software, for instance), but the requirement is the same: capital creates means of production.

Profit is the essential feedback guiding capital towards the production of goods people need and want. "Full employment" is only created with sustained jobs in a system of production.

An economy that only consumes and doesn't produce is in a death spiral. Money that only buys goods -- whether a road or a twinkie -- is not capital. It is consumption, not production. TARP funding and public works projects are not production.

Certainty about the future is essential. It is impossible if the reward of any investment can be snatched from the investor at any moment, either by regulatory dictate (non-objective environmental and securities laws), judicial whim, bureaucratic fiat (presidential order), outright theft ("trust"-busting or eminent domain), or debasement of one's savings by inflation caused by government "monetizing" debt (a fancy term for running the printing presses night and day and giving the money away to every Tom, Dick and Friend of Barack or Nancy).

Freedom to act is just as essential to any healthy, growing economy: investment grinds to a halt when people can only act by permission, when every action requires approval from bureaucrats or neighbors.

In this equation, the only proper role of government is the protection of individual rights -- especially, property rights.

Individual rights and objective law -- free of the whims of bureaucrats -- are the essential implementation of freedom, and property rights are the essential pillar: the right to life is meaningless unless you can retain the product of your life's work. Without property there is no purpose to capital, no certainty for the future, nothing to act towards.

President Obama has said he wants to hear new ideas to get the economy going again and create jobs. Let me tell him how to start:

1. Suspend all personal and business income taxes for 1 year. This will at least put money in the hands of those best able to invest it: the ones who earned it.

2. Return to a gold standard and create confidence in the future: stop debasing the currency.

3. Eliminate all non-productive departments of government-- this will save about a half trillion dollars to offset lost tax revenues.

4. Eliminate all regulations and revert to the principles of objective law: create a government of laws, not men or friends of Barack or Nancy or Barney or Chris, laws based only on the protection of individual rights.

Implicit in this: pursue no health care or "saving-the-planet" mandates.

Much more could be done. This is only a start, but I think the briefest reflection by any honest person would show that that the economy would take off like a rocket if these 4 simple points were implemented.

In short, my advice to President Obama and Congress is this: stop interfering with the profit motive and the right of every American to to pursue their dreams and happiness. Stop stealing their wealth. Stop creating uncertainty by terrifying people with the arbitrary decrees of government. Start protecting our rights.