Stimulus checks, inflation, debt, and heavy regulations on employment and housing is not the kind of policy that will help with economic recovery.
March 15, 2021
By: Bobby Casey, Managing Director GWP
Both of these sentiments used to be found in libertarian circles but not so much among the general public. Yet here we are, John and Jane Q. Public are halfheartedly joking about inflation and alternative currencies.
The economy is under attack from every direction. For as much as wealthy people get castigated for avoiding taxes, not nearly as much ire is directed toward politicians who avoid respecting individual rights.
I saw a post the other day talking about how older generations disapprove of how overly sensitive the younger generations are. Someone commented saying that’s typical because older generations tend to hate change.
I found that very lazy and dismissive because it really depends on what they are getting upset about. I’d like to find the Barry Goldwaters of the time who warned against all the social programs coming out of the FDR era.
Do we just blow off such warnings and assume everyone over the age of 40 has an aversion to change? Here I am in my mid 40’s and while I don’t get too much into the culture stuff, I am locked into the political and economic stuff.
I wrote two separate blogs in the past year. The topics of which have since resurfaced.
First, is the PRO Act, or the Protecting the Right to Organize Act.
Before Biden took office, I warned of the fact that he was a proponent of nationalizing California’s legislation called AB5. That’s the one that basically screwed every gig worker out of their gigs in some contrived effort to make them full-time or part-time employees, rather than contractors.
There was so much outrage over AB5, nearly everyone affected became exempt… except for ride-share and food delivery services. That then was put to a vote, and a clear majority of Californians agreed that ride-share and delivery services should be allowed to stay contract work.
It failed in one of the bluest states in the union, but has since resurfaced as a “pro union” or “anti right to work” piece of legislation on the federal level. It was positioned as a “pro worker” bill, but really it was a revenue grab from the unions and the state.
The PRO Act is no different. It will demand a reclassification of workers and could theoretically lead to higher taxes overall. Had all the contractors been converted to formal employees, California stood to gain nearly $7 billion in tax revenue from that reclassification. Granted people were just losing their gigs rather than being hired on, so that number is overstated.
The PRO Act passed the House on March 9th, 2021, albeit not by a very strong margin, and is heading to the Senate. This will override state level right-to-work laws, that allow workers to opt out of unionization and the dues associated with it.
What’s worse, it will kill small businesses and side hustles in the same way it nearly did in California. There’s no excuse for taking a failed experiment and nationalizing it. It not only failed, it was rejected by the people when put to a vote.
This only further demonstrates how out-of-touch politicians are to the everyday plight of the people they purportedly represent. When gig workers protested and complained about the legislation, Democratic author of the bill, Lorena Gonzalez from San Diego, clapped back saying those jobs “were never good jobs” anyway.
There is a chance that Lorena gets her way on a national scale thanks to the PRO Act, and gig workers should be looking for a work-around sooner rather than later.
Second is the CDC imposing a moratorium on evictions.
Congress imposed a moratorium through July 2020. The CDC extended the moratorium to December 2020 and again through March 31, 2021.
Congress tried to pawn their responsibilities off onto the CDC and extended this power to impose moratoriums on evictions due to inability to pay rents, but did so in a weak and diluted way. It ultimately didn’t stick.
Since then, a lawsuit (Skyworks Ltd. v. Centers for Disease Control and Prevention) came to bear, which ruled in favor of the landlords. Federal District Court Judge J. Philip Calabrese writes:
The CDC’s orders “exceed the agency’s statutory authority…and are, therefore, invalid.”
This is a tepid win for landlords, as the judge also said, “This case turns on whether Congress has authorized the CDC to adopt a nationwide eviction moratorium.”
The issue isn’t whether it was acceptable to impose moratoriums on rents as a matter of private contracts and property rights. It was expressly ruled the CDC wasn’t properly authorized. That means, moratoriums are still very much in play.
Remember, the moratorium initially placed by congress last July went unchallenged, so it is possible it returns as a direct edict from congress.
In both these cases, the uncertainty and distrust these kinds of controls foment is unhealthy for any civilized society. Ignoring economic realities and trying to displace the consequences of political policies leaves someone holding the bag. Rarely is it the same people who created the mess who end up being held accountable.
Waiting on lawsuits and protests and voting to fix the impending and inevitable damage that will come from these policies is not a plan. If you are interested in discussing strategies that can help protect you, your family, your business, and your assets, let’s set up a time to discuss.
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