Shutdowns are Bad Policy, Bad Economics

The current United States federal government partial shutdown, like past shutdowns, is all about egos and partisanship, not good governance.The shutdown, supposedly over immigration, is really about something else anyway: Trump’s ego and his core base of older, whiter, insecure voters.

Here we are again. I wrote a post in 2018 on the bad policy of federal government shutdowns. I quoted a column by Jeffrey Miron published Jan 21, 2018, on Vox. The supposed reasons change (a little), but we’re in another shutdown as a new year begins.

I quoted Miron then, and do so again because he points to a myth about libertarians. We need to be mindful that

…praising the shutdown lends credence to the view that libertarians hate government in all its forms, which is not accurate. A full cessation of all spending, tomorrow, is not the libertarian dream. Libertarians believe most government impinges our freedom and reduces economic efficiency, but we do not hate government as a matter of principle; we merely argue it should be much smaller. And the process for winnowing out important projects from non-essential ones ought to be reasoned and democratic, not the result of a showdown between two parties all too happy with big government (even if their preferred programs differ).

A partial shutdown is the worst of all worlds. First, programs and services many libertarians support — at least to a degree — are the ones currently limited by the shutdown. Second, the debate on what are reasonable and necessary services is overshadowed by news reports emphasizing the plights of government workers and mess caused by the shutdown.

Donald Trump has demonstrated time and again that he and his administration is as close to economically illiterate (or mistaken or misinformed if we want to be generous) as one can imagine. For libertarians and classical liberals, the economics of Trump and the Republicans willing to support Trump is a nightmare version of “conservative” values.

Trump is embracing many of the policies the 1970s Democrats endorsed under pressure from labor unions. This includes trade protectionism, trying to control the Federal Reserve, and racist, xenophobic immigration policies.

Immigration, yes, was a fear of unions concerned with dropping wages for “low-skilled” (non-credentialed) workers. Republicans, into the 1980s (and some into this century) wanted immigration to maintain population growth and economic stability. Immigration allows a nation to absorb new ideas and a younger population.

Libertarians, in theory, didn’t care about the economics; we support unrestricted migration between nations just as we do between cities or states. People should be allowed to make market-style choices on where to live. Popular places grow and prosper, unpopular places shrink. Then, polices change and a rebalancing occurs. At least that’s market theory as applied to migration. Yes, there should be security checks for a national border, but these can be minimal and efficient. Anyone not a threat should be allowed into a nation.

Then, the GOP started to jump on the anti-immigration bandwagon using the excuse of fiscal responsibility.  Democrats adopted the argument that new arrivals help support an aging native population. There were also various moral arguments from Democrats about the role the United States has played in creating bad situations globally.

Again, libertarians want people to be free to choose the places in which they want to live. We (should) reject economic arguments about native workers and economic arguments about supporting retirees.

Libertarian and classical liberal theories support free movement, period, without an economic analysis.

Today, the Democrats support immigration and the Republicans oppose it… and they use the same arguments, just from different parties.

Trump’s demand for a border wall is stupid, silly, whatever insulting word you wish to choose. It’s a play to his base, based on a silly campaign pledge few intelligent people could have believed was literal.

The Republicans under Trump are the party of fear. Immigrants are not a threat: they come because they would rather be here than somewhere else. That’s a good thing. That’s a market at work.

Trying to “take a stand” on security, the president is making government seem more necessary. He’s allowing the sad stories of workers to overshadow a reasonable discussion of what government can and should do. For example, maybe states should have a greater role in managing parklands. Or maybe we need better tax collection methods less reliant on a large Internal Revenue Service. Shutdowns only serve to suggest we cannot cut government.

Worse, at least to those who pretend to care, shutdowns cost a lot of money and do genuine harm to the nation.

The libertarian left, which is where I position myself, believes in the commons and natural resources. We want to protect public spaces. Sadly, the shutdown has done damage to our shared resources. The damage will cost money to repair and time to restore.

It’s no secret I dislike Trump. This shutdown, and his previous shutdowns, only reinforce my distaste for him.