In the 1980s Circuit City was the top-performing American stock. That’s not nothing. The 1980s was a glorious, truly glamorous decade for stocks. Yet Circuit City came out #1.
Fast forward to the 2020s, and the Circuit Citys that were once a ubiquitous symbol of physical American retail can no longer be found. It seems the once can’t-miss corporation lost its way such that it was no longer meeting the needs of customers. Businesses that fail to perform invariably find themselves in the proverbial cemetery of once essential companies.
The above is arguably the biggest driver of U.S. economic dynamism. There are realistically very few sacred cows. What’s no longer useful is allowed to go under. Please keep this in mind the next time some hapless politician or central banker promises to “fight” recessions. The individuals know not of what they speak. Without recessions the U.S. economy would be a small fraction of its present, abundant self. Recessions ruthlessly push precious resources to their highest use by putting out to pasture ideas and businesses that are no longer worthy. See Circuit City yet again.
This basic truth came to mind while driving an American freeway recently. Without getting into the good or bad of the private sector creating all roads and putting prices on usage (this would be a grand development for obvious reasons – think an end to traffic), the focus will be more on what one sees will driving U.S. freeways, highways, or pick your name.
Have readers ever noticed the signs providing numbers to call for traffic information? Or billboard-style signs above freeways signaling the length of time it will take to get to various routes along the freeway being driven? Have readers stopped and thought why freeways continue to provide numbers and billboards despite both being wholly unnecessary?
Please think about it. Why the need any more for “Call 511 for Traffic Info” when smartphone ownership in the U.S. is so dense? Owners of these smartphones access Waze and other apps for free that provide detailed information about traffic, and various hints about what’s causing the traffic. Who on earth calls “511” anymore?
As for billboards indicating drive length, see above. But for those a bit slow on the uptake, those supercomputers that sit in our pockets provide countless ways for drivers to know almost to the minute when they’ll be where they want to be.
Arguably more galling is the ubiquity of “Call Boxes” on freeways. Is anyone else as bothered by this as yours truly? Call Boxes arguably made some sense in the decades before the ‘00s when mobile phone ownership wasn’t terribly broad, but now? When’s the last time you the reader saw someone roadside talking loudly into a “Call Boxes” phone?
All of this speaks a bit loudly to the tragedy of government spending. And it mocks both sides of a blurry ideological divide. The left claim that government revenues aren’t sufficient, while too many members of the right eagerly promise higher revenues in return for tax cuts.
To be clear, tax cuts are great. All day, and every day. Americans are way overtaxed, particularly up top. Which is the point. Tax cuts that result in higher revenues aren’t real tax cuts. They’re just a sign that the Party reducing taxes didn’t reduce penalties on work and investment nearly enough. Of course, the story gets worse.
Politicians exist to spend. The federal government in the U.S. isn’t enormous in dollar terms because of Democrats or Republicans as much as politicians exist to spend. Government is enormous stateside because the American people are the most productive people on earth, and their production showers enormous revenues on politicians who will always spend what Treasury collects, and who will generally borrow against future collections in order to spend with abandon now.
Please keep all of this in mind with U.S. freeways top of mind. The Call Boxes along with costly information sources offered up “for free” on freeways are just a reminder that the first dollar of spending by politicians only tells a tiny portion of the bigger, long-term spending story. That we’re still paying for Call Boxes is a visual reminder that government programs almost never die; rather they grow, and grow, and grow. Does anyone want to bet that any new freeways created by the latest infrastructure bill will include Call Boxes, along with other sources of traffic information? The question answers itself.
The problem with government spending isn’t deficits. Such a view is unsophisticated. The real problem with government spending is that the programs born of spending invariably develop constituencies such that the consumption by politicians has a forever quality to it. A dollar spent in 2021 will cost many multiples of that dollar over time.
While businesses that fail to measure up are allowed to disappear with great speed so that they can no longer fail when it comes to measuring up, government just grows and grows as a swallower of the precious resources that, when allocated privately, routinely protect us from subpar businesses. Not so government.
With government, the rewards go to the inefficient and wasteful. If you’re doubtful, just look not-so-hard the next time you’re going 75 on the 210, 10, or 95.