William Watson explains at Financial Post: We will need Trussonomics. Excerpts in italics with my bolds and added images.
If subsidies change behaviour, as their proponents clearly believe they do,
so must taxes and the rising cost of regulation
The Nobel-winning novelist Doris Lessing once wrote that “In politics it is easier to be mad unnoticed than anywhere else.” Of course, she was writing about Communist Party politics in what was then Southern Rhodesia during World War II, not leadership campaigns in the 21st-century British Tory party. But the goings-on of the various factions that make up the Tory party have been at least tinged with madness, if not steeped in it. And it is not going unnoticed. The whole world is watching, as the chant goes, especially the bond market.
The pity is that fine and ever more necessary ideas have been caught in all the loopiness and, guilty by association, are being dumped in the ash bin at the very time they are needed most. What for the next 20 years will be branded “Trussonomics” is in its essence simply tried and true common sense: ever rising tax rates and ever more intrusive regulation, which is what western countries have these days, are not and never have been the road to high and rising living standards.
Now, strangely, these libertarian ideas are being categorized as “populist,” the supposedly idiot beliefs of the great and ignorant unwashed. There may be places in the world where libertarianism is populist — Wyoming, maybe, rural New Hampshire, anywhere that lived under Soviet Communism — but in this country and in the United Kingdom such ideas are best loved by the not very numerous readers of such bricks as Friedrich Hayek’s The Constitution of Liberty, which according to Amazon weighs 1.68 pounds. Their most effective European exponent, Margaret Thatcher, who supposedly carried that book in her purse, making it a truly lethal weapon if swung with sufficient force, sold this set of ideas on the basis that “There is no alternative,” hardly the most appealing brand labelling.
Many Canadians are in some ways instinctive libertarians.
Why are we paying for the prime minister’s groceries, many will wonder — not his state dinners and receptions but his ordinary family groceries? Why are the Governor General’s airplane meals so expensive? Could she not settle for the dried-out trail mix the rest of us are served while flying? Why does Ottawa think (see Matthew Lau’s article elsewhere on this page) “people who menstruate” — the people formerly known as women — should have free female hygiene products, plus installed receptacles for them, provided in every bathroom in federal jurisdiction — men’s, women’s and other?
In each case, the populist answer, though simple, is right: He should pay for his own family groceries. She should eat the airplane meals the rest of us eat. And Ottawa should stay out of the bathrooms of the nation (as an earlier Trudeau might have said). To be sure, more subtle and sophisticated reasoning can and often does lead especially very highly-educated people to conclude that such answers are hopelessly, horribly wrong. In these more refined circles “populist” is a way of saying “simple-minded” and “unseemly.”
It is true that Trussonomics, as proposed by its namesake, was flawed in very avoidable ways. If you win a leadership contest, it’s a sign of weakness, not strength, to exclude rivals from your cabinet (or, attention Mr. Poilievre, shadow cabinet). If the spending hikes and tax cuts you want could cause reasonable people to worry about the resulting government debt, you should not close down a watchdog whose job it is to track such things. And you must tell your cabinet where you are heading and also prepare the public — a lesson learned in this country in 1981 when finance minister Allan MacEachen sprang fiscal surprises in a budget that, several weeks later, had to be walked back, not long before MacEachen himself was walked over to External Affairs, as it then was. Ever since, budget secrecy be damned, federal budgets have been telegraphed well in advance.
In Ottawa, as the budget approaches, small dogs must be kept indoors
lest they be frightened by popping of trial balloons going off like fireworks.
But though the Trussonomics package was badly wrapped, its contents remain sound. People do respond to incentives. If you tax income too much, you reduce the incentive to earn and report it honestly. If you regulate people too much, you induce them to spend their money and time getting round regulations, including by doing the regulated activity in jurisdictions (not yours) where it is regulated less. Pile on taxes and rules, and lawyers and lobbyists grow rich while invention, investment and innovation languish or relocate.
It’s sometimes argued that people aren’t as responsive to economic incentives as economists claim, so taxing them and raising their regulatory costs won’t discourage the animal spirits that impel them to constructive action. But those offering this argument are invariably inveterate subsidizers, who would encourage all manner of activity they deem socially worthy by subsidizing it, taxing it less or lightening its regulatory load.
But you can’t have it both ways. Subsidies that don’t change people’s behaviour are just ways of getting money to friends. But if subsidies change behaviour, as their proponents clearly believe they do, so must taxes and the rising cost of regulation.
Ms. Truss may walk off into history. Trussonomics our over-taxed and over-regulated societies desperately need.
Footnote from Issues and Insights: Biden Has Unleashed The Regulatory Leviathan: Report
The Competitive Enterprise Institute (CEI) just this morning released its hugely valuable report called “10,000 Commandments,” which is a compendium of the regulatory state. In it, CEI Vice President for Policy Clyde Wayne Crews lays out the terrible truth about Biden’s regulatory zeal.
The first thing you have to understand about federal regulation is how massive it already is, with compliance costs that total more than $1.9 trillion a year.
That’s bigger than Canada’s entire GDP. It’s bigger, in fact, than all but seven nations in the world. It works out to almost $15,000 per household.
And it is growing at a ferocious pace. From 1995 to last year, regulators issued a total of 114,821 new rules.
The cost of complying with this mountain of mandates is on top of the $6.3 trillion the feds spent this year, which means the true cost of government equals roughly a third of the nation’s economy.