The Three Rs of Government Growth: Here’s How to Stop It.
“It is incredible the quantity of good that may be done in a country by a single man who will make a business out of it.”
— Benjamin Franklin (1783)
This week, in my economics class at Chapman University, our topic is the role of government.
I showed them this chart, which demonstrates the never-ending growth of government over the past 100 years.
The Three Rs of Government Growth
We discussed the three main reasons why government has grown like wildfire since 1900. I call them the three Rs.
In elementary education, the three Rs are reading, writing and arithmetic.
When it comes to the source of government growth, the three Rs are recession, regulation and war.
First R: Recession. Whenever the economy tanks, government steps in and stimulates the economy through deficit spending and easy money.
Second R: Regulation. Governments at the federal, state and local level are constantly finding ways to regulate the economy through the ABCs of government agencies.
Third R: War. When the government goes to war, Congress allocates huge resources to the defense department, which used to be called more appropriately “the war department.” The military-industrial complex gets a huge boost.
How to Fight Big Government
Reducing the size and scope of government requires a three-pronged approach: (1) adopt policies that minimize the boom-bust cycle, (2) deregulate the economy and (3) encourage peace around the world.
Obviously, this approach is easier said than done. President Donald Trump promised to “drain the swamp,” but his influence did not last. During his presidency, the economy did well until the Covid lockdown in 2020. He cut the corporate income tax and reduced the growth of federal regulations. And under his watch, there were no major wars.
Under the Biden Administration, the economy has struggled, inflation is back, regulations are going up dramatically and Russia invaded Ukraine.
‘Only YOU Can Prevent Big Government!’
To change the world, it all starts with the individual. I, for one, am trying to do my part to reverse the tide by speaking out, donating to good causes, writing Skousen CAFÉ, teaching college youth and authoring books in support of good government and free enterprise (www.skousenbooks.com).
There’s an old saying, “You can’t change the politicians until you change the people who vote for them.”
I’ve dedicated my life to teaching college-age students the benefits of free-market capitalism and the dangers of big government. I’ve taught at top schools such as Columbia University, and for the past eight years, at Chapman University in California.
The Doti-Spogli Chair of Free Enterprise
Last year, Ron Spogli, the founder of the private equity fund Freeman Spogli & Co. in Los Angeles, funded the Doti-Spogli Endowed Chair of Free Enterprise. Ron is also a former ambassador to Italy and member of the executive board of the Hoover Institution at Stanford. Jim Doti is the former president of Chapman University who is responsible for putting the university on the map. He earned his doctorate in economics under Milton Friedman at the University of Chicago.
Both are devoted supporters of free markets, limited government and individual liberty.
I am honored to be appointed to the first Doti-Spogli Chair of Free Enterprise at Chapman University. My marching orders are to teach college students the sound principles of free-market economics.
The new chair also funds two awards each year, first, to a faculty member who has best promoted free enterprise; second, to a student who writes the best essay on free enterprise. This year’s topic is, “What policies are needed to bring back business to California?”
The first winner of the Doti-Spogli Free EnterPRIZE sets a high standard. Today at Chapman University, I will be presenting it to Vernon L. Smith, who won the Nobel prize in economics in 2002 for his great work in experimental economics. He is a big fan of Adam Smith, the father of free-market capitalism.
Mark Skousen and Vernon Smith next to the Adam Smith statue at Chapman University.
THE Annual Gathering of Freedom Fighters
I started FreedomFest, “the world’s largest gathering of free minds,” back in 2007, because I realized that we were losing the battle of freedom. To reverse the tide, we needed to meet together once a year to learn, network, socialize and celebrate liberty.
As Ben Franklin famously declared, “We must all hang together, or we shall surely hang separately.”
We all live busy lives focusing on our businesses and personal lives, but can’t we gather together once a year for three to four days to change the world for the better?
Thousands are saying yes!
We are now in our 16th year and growing in influence and excitement. This year we are meeting in Memphis, Tennessee, July 12-15. Here is our latest announcement:
I should also mention that the financial editors at Eagle Publishing will all be at FreedomFest — Jim Woods, Bryan Perry, Roger Michalski, Paul Dykewitz and yours truly, as part of our three-day investment conference. Stop by our booth!
Special Discount Code for Subscribers to Skousen CAFÉ
Good News! I’ve arranged a special code to get $77 off the registration fee at FreedomFest. Use code EAGLE77 when you register at www.freedomfest.com. Or call Hayley, at 1-855-850-3733, ext 201.
We all need to work together to reverse the tide.
I know I’m a dreamer, but I’m not the only one.
Good investing, AEIOU,
Mark Skousen
You Blew It! The Increasing Cost of Doing Business
In today’s Skousen CAFE, I mentioned the high cost of doing business due to increasing regulations, crime and the high cost of taxes and labor. It’s one reason businesses are leaving states like New York, Illinois and California. I see that Boeing has given up on Chicago and has moved to Virginia.
George Gilder, a long-time friend and now colleague at Eagle Publishing, has written the following in Gilder Guideposts: “According to the American Action Forum, quoted in the Wall Street Journal, in two years the Biden administration has imposed 517 “regulatory actions,” with some $318 billion in total costs, worse even than the Obama administration’s $208 billion in costs in its first two years. In his entire term, Trump’s additional regulatory burden came to just $64.7 billion.
“Federal regulations are gouging at least $2 trillion a year from the U.S. economy, some 8% of U.S. GDP, according to the Competitive Enterprise Institute (CEE). That comes to some $14,684 per family more than is extracted by the federal income tax, the CEE reported.
“In truth the cost is probably much greater. The centerpiece of Biden regulation and Biden economic policy is the “green” drive to “electrify” the economy, forcing massive misallocations of capital from productive to destructive activities.
“The $7,500 or so tax in subsidies for each electric car sold is, all by itself, one of the most self-destructive policies ever undertaken by a nation. We have no prospect of generating enough electricity to support 300 million electric cars; the grid is degenerating not improving. We don’t have an adequate supply of rare earth metals to make 300 million car batteries. And, if we did, the Biden administration won’t let them be mined.” –Gilder Guideposts, March 1, 2023
I’m delighted to announce that George Gilder will be joining us at FreedomFest this July 12-15 in Memphis. See you there!
