Government Priorities to Solve Economic Problems Are Failing… Again

The solution to crime and poverty are not more government interventions, as government priorities miss the mark again.

April 15, 2024

By: Bobby Casey, Managing Director GWP

priorities Crimes used to be frowned upon. I can remember when shoplifting and trespassing were crimes with little to no tolerance… not by the state, but by society itself. Now, not so much.

The legal priorities of the state are clearly not aligned with protecting the basic rights of productive individuals, when they are more concerned with a drug war than property rights. This isn’t just the US anymore either. The UK is seeing this, and what made it headline news was the fact that it happened to none other than famous chef, Gordon Ramsay.

His London hotel and pub has been overrun by squatters, who oddly enough, have a legal right to be there. They say it is a non-residential property (i.e. it is a business), and therefore to have them removed would require legal court action:

A notice taped to a door said the group had a right to occupy the venue, which they said was not a “residential building” and was therefore not subject to 2012 legislation which bans squatting in a residential building.

Signed by “The Occupiers”, the notice said there was always “at least one person in occupation” and claimed any attempt to enter the premises without their permission was a criminal offense and could result in a prison sentence or fine.

“If you want to get us out you will have to issue a claim for possession in the county court or in the High Court,” the note added.

Much like the United States, squatters are a civil matter, not a criminal one.

Occupation of a person’s non-residential property without their permission is not itself a crime in the UK, though police can take action if crimes are subsequently committed, including damaging the property.

In a statement, the Metropolitan Police said it was made aware of squatters on 10 April.

“This is a civil matter and so police did not attend the property,” the force added.

The same thing is true for crime. Already underserved areas are seeing store closures because it’s no longer profitable to be there:

Major chains including Walmart, Walgreens, and Target have blamed rising crime for their decisions to close retail locations, with Target most recently shuttering nine stores across five cities.

Also true for the UK:

The total cost of crime to British retailers doubled last year to £3.3 billion ($4.2 billion), according to a report by the British Retail Consortium released Wednesday. Violence and abuse against UK shop workers rose by 50% to 1,300 incidents a day while instances of theft grew to more than 45,000 daily. – BNN Bloomberg

Retailers have warned Britain’s shoplifting epidemic will lead to businesses closing and livelihoods being lost. – DailyExpress

Adjacent to the UK, is the Republic of Ireland, and they’ve decided to dabble in UBI, or Universal Basic Income.

2019 was a big year for UBI, especially in the US when then Presidential Candidate, Andrew Yang, ran on that very platform.

It’s a whole redistribution scheme.

I’m fine to accept the noble intentions of those who support it; that is to say, I don’t think the supporters are malicious, per se. But that’s about as far as I go on this.

The institutions and individuals who think UBI is a net win, often point to “lower crime” and “better mental health” as both indeed are true findings of UBI experiments. Business Insider writes about some case studies out of Florida:

According to [Anna] Jefferson [a principal investigator at Abt Associates who studies data from basic-income programs across the country], guaranteed income — which she calls “unrestricted cash transfers” — impacts recipients’ lives almost immediately. Early results from her firm’s analysis, she said, “really show that cash can improve people’s financial stress and mental health remarkably and quickly.”

With more data at hand than theoretical projection, the evidence is overwhelming: Universal basic income is working nearly universally.

Was mental health really the goal of UBI though? Was that meant to treat the psychology of a geography? Because there are no economic benefits to be found. It says it’s “pulling people out of poverty”, but a few sentences later talks about the rise of the cost of living and rents. The article goes on:

A 2022 Washington Post story about UBI noted that “providing $1,000 a month to every American regardless of income” would cost more than $3 trillion a year, “nearly half the federal government’s entire budget.

Nearly HALF the US federal budget. But that $6 trillion budget is in a $2 trillion DEFICIT already. The math isn’t mathing!

It’s giving extortion vibes.

First off, it naturally costs something, which is another way of saying higher taxes. Andrew Yang suggested a VAT to pay for it. Whatever tax you impose, you ultimately land where Bernie Sanders did on Universal Healthcare: tax the middle class more.

Second, why are we PAYING people not to commit crimes? When did that become a thing? I thought people don’t commit crimes because they either had a decent moral compass or at the very least feared the consequences. But apparently we are now bribing them out of a life of crime?

Finally, while mental health is certainly nice, what about the mental health of those footing the bill… if in fact mental health is a real factor here and not some ruse?

You cannot inflate or spend your way out of poverty. That is literally how you put everyone who’s NOT in poverty INTO poverty.

It’s failing locally in the US, as demonstrated above. It failed in Finland. That’s right. There are people saying it was a remarkable success. But if that were true, why didn’t it get reupped for another round? Why wasn’t it expanded?

But Ireland, not one to trust any of this, has taken up this mantle, because much like every failed socialist program: the rest of us just weren’t doing it right. Obviously!

More than 9,000 people applied and 2,000 were randomly selected to receive €325 (£280) a week for three years, from August 2022 to 2025 – with no conditions attached. Among those selected were more than 700 visual arts, 584 musicians, 204 working in film and 184 writers. Others worked in theatre, dance, architecture.

The first two thirds of the article talks about the wonderful “feedback-loop” of positivity in the recipients. Way down at the bottom, they talk about the tax bill.

What actually appears to be working, if we even want to use the word “working”, is the time limit combined with the unconditionality. Contrast that with conditionality and no time limit, which is what many welfare schemes seem to be.

I’m no fan of the welfare state, but if there was a scheme that replaced all other welfare schemes that just said, “Okay, one year we just pay your bills while you get your life together. No matter what you make, no matter how many jobs, no matter what: we will do this for one year.” I think you could see some shift. The incentive to get it together is there, but the incentive to do as much as you can during that time of reprieve is also there.

The indefinite, no means testing, no conditions combination — which is what they are aiming for — is just untenable and unnecessary.

The same can be said for the attempt at “Universal Healthcare” in the US, where less than 11% were uninsured, some of whom were too rich to need insurance. Turning the entire economy upside down and criminalizing not having insurance after jacking up the premiums was not the flex they thought it was.

The same can be said for lockdowns to save maybe 1-2% of the population? Destroying businesses, livelihoods, jobs, and the overall economy to merely reduce the risk of dying… not actually preventing death… is remarkably stupid.

UBI is a similar concept, just a different execution. Once again, turning an economy inside out to account for the margins, with a similar expected success rate of zero.

Economic problems aren’t solved this way. All the heart-warming stories of those who got the money won’t change that. It won’t end at $1,000 per month either. The people who appreciate this today didn’t even have that coming in, and are thankful for the money. The next generation will inevitably complain it isn’t enough. Such is the case with every government economic intervention from taxes to minimum wage.

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