Continuing Resolutions (and Continual Bureaucratic Interventions) Are Stifling the Free Market
For decades, America’s free-market system was the envy of the world. It demolished Communism in Russia, forced China to open its markets to thrive, and has been the barometer against which international organizations like The World Bank measure the free market’s success in developing nations.
However, America’s status as the world economic leader is at risk. Contrary to popular rumor, it’s nothing as insidious as Europe’s preference for social welfare programs, or China’s controlled economy. No, the most insidious threat to America’s free market system may be the utter chaos that’s caused by Congress choosing to put politics over what’s best for small businesses, consumers, and investors.
An obvious threat to the free market is bureaucratic interventionism which typically comes in the form of red tape and high taxes. Traditional interventionism drives companies overseas, stifles innovation, and limits free competitive entry into the market for would-be entrepreneurs. In the wake of the pandemic and the government-induced economic shutdown, Congress has taken interventionism to a new level. Multiple stimulus “relief” bills and grinding the economy to a halt have resulted in global supply chain disruptions, inflation, and shortages across America. Despite the glaring failure of interventionism, the bureaucrats have never been more confident.
Government chaos is also a threat to the free market. Instead of a predictable system where businesses can plan three, five, or even 10 years in advance, America’s businesses are too often reacting in real-time to constantly changing local, state, and federal policy changes that put money in lawyers’ and accountants’ pockets instead of lowering prices for consumers or hiring new employees. The most extreme versions of chaos are seen in nations like Afghanistan and Ukraine, which I recently addressed elsewhere, but they are increasingly seen in this country as pandemic, social, and other regulations ping-pong depending who is in charge. Predictability encourages confidence in innovators, entrepreneurs, and business owners.
One of the most unnecessary causes of chaos is Congress’ decades-long tradition of using Continuing Resolutions to fund government. Instead of a transparent process during which citizens can have their voices heard through letter-writing campaigns, phone calls, and trade groups, CRs encourage partisan politics which result in shoveling trillions of taxpayer dollars at programs.
Contrast this approach with a careful assessment of the value of each program that’s being funded. Instead of keeping zombie programs, or funding special-interest items which have little value, Congress would be incentivized to prioritize long-term thinking. Special interest handouts would be limited – unlike today, where funding can be slid into trillions-dollar spending sprees.
The secondary effects of CR funding include distracting citizens from other issues. When debt ceilings and CRs are declared to be emergency situations, basic government functions which support a free market go awry. For example, even though Boeing’s KC-46 refueling plane is favored by Air Force leadership, the modified A-330 made by Europe’s Airbus seems to have the benefit of political support from Alabama’s Congressional delegation. This means that a tanker which is a better size for U.S. military needs, saves money through fuel efficiency, and is part of America’s decades-long relationship with Boeing’s predecessor tankers may be placed aside for political favoritism. This is bad government, bad financial oversight, and indicative of a national defense strategy which may not keep the nation safe. A free market can only exist when everyday citizens engage in commerce knowing they are safe.
Interventionism and unencumbered market activity alike send signals to entrepreneurs, investors, and consumers. What kind of signal does bureaucratic interventionism communicate to the brightest minds when winners and losers are picked by lobbyists instead of objective analysis? In a free market, consumers choose the winner and loser by deciding who provides the best product and the best price. The consumer’s choice sends signals to entrepreneurs and investors where to focus their time and energy. Inappropriate government interventions disrupt this organic process and can misdirect resources or incentivize innovators to stay on the sideline. This is also true when it comes to necessary government programs – those which are properly considered for strengths and weaknesses will be worth diverting consumer dollars from free activity to tax coffers. Those which are not should be eliminated without hesitation or regard to political machinations.
The more Congress is willing to intervene and Americans are willing to tolerate the interventionism the more our great economy will be stifled. America is said to be the place where a person just needs a good idea and some grit and determination to get ahead and succeed. Unfortunately, the local and state regulations of the pandemic era, combined with Congress’ opaque practices, are creating a winner-takes-all environment where the powerful really do win, instead of the best.
Michael Feuz is a technology consultant by day and a research associate for a small D.C. think tank by night. He is pursuing graduate studies in economics at George Mason University.
