Q&A With Author Archie Richards

Q. What did you do then?

A. Being in the investment business, I sent weekly columns on money matters to a local paper which published them without pay. I also sent them to my stepdaughter’s English teacher. I wanted to improve my writing, and he wanted to learn about money. At first, he returned the columns covered with red marks. Gradually, the red marks disappeared, and I went national, publishing weekly columns, “Richards on Money Matters” in some eleven papers across the country. 

Q. How come you later moved over to politics?

A. I’ve always been a libertarian. After seven years of columns about money, it seemed clear that the fabric of American life was deteriorating. I sent periodic columns about this to friends and to the Concord (NH) Monitor, which published almost all of them as letters to the editor.

Q. What do you mean by the fabric of American life?

A. Inflation, crime, violence, homelessness, unlimited immigration. Over the last hundred years, while the government has grown ever bigger, the problems have also grown ever bigger. The government purports to solve problems. But my book, Shrink Government: It’s Too Big! makes clear that government caused them.

Q. But the inflation of today was caused by the rise of real estate values, right?

A. No. Inflation has only one cause: the excessive creation of money by the Federal Reserve Bank. Most of our money is not cash and coins; it’s bank deposits, which are electronic. The Fed creates dollars out of nothing by pressing a button on a computer. Banks also create money when they make loans, but they follow the Fed’s lead. The Fed has failed miserably in evening out the swings in the economy. The excess money has hit real estate especially hard because government’s laws and regulations have restricted the supply. 

Q. What’s the solution?

A. The Federal Reserve should be abolished. No one can limit the ups and downs of the economy. The government should stop trying. The U.S. Treasury should instead create dollars every day in accordance with the growth of the population. 

Q. What other changes are needed?

A. My book explains in detail that so much of what government does – especially the federal government – makes life harder for the people, especially poor people. It widens the gap between rich and poor. Government should be reduced from 40% of the GDP to less than 5%.

Q. How should America deal with the national debt?

A. Two measures must be taken: The government owns about 28% of the nation’s land and resources. It should sell these assets, not for cash, but in return for private parties taking ownership of the nation’s debts. Also, to keep debt from rebuilding, a Constitutional Amendment should require that federal legislators serve for only one term. Never standing for reelection, the legislators would have far less incentive to provide government goodies to constituents. Legislative pay also should be reduced. We want people to run for legislative office primarily because it’s their turn to serve.

Q. What other measures has government taken that were especially mistaken? 

A. The purpose of the government’s disastrous response to Covid was to increase its size and power. Also, cataclysmic global warming is nonsense. World temperature does not vary with changes in CO2. It varies with the amount of energy received from the sun.

Q. Whom do you think will buy your book?

A. The people who believe that America is going wrong. There are millions of them.

Quotes from the book:

Government consumes wealth, creates no wealth, and inhibits the creation of wealth. But government tries to solve more and more problems in an effort to increase its size and power. Thus, less and less money is available to solve more and more problems. The long-term result is national dysfunction. Current circumstances would indicate that the long run has come home to roost.

If government were greatly diminished, the income of most people would rise, and the gap between rich and poor would narrow.

Read America’s Government: Enemies of the Poor

Chapter 1 Thirty-Five Ways U.S. Governments Hurt the Poor

U.S. federal, state, and local governments make life harder and more expensive for those with low income. Most people are probably aware of one or two damaging policies. But thirty-five!! No, people are generally unaware of the enormity of damage. 

The issues presented in this chapter are described in shortened form. Page numbers refer you to where the issues are explained at greater length in Chapter 3. The issues appear in the same order in Chapter 3 as they do here in Chapter 1. 

Nothing is harder on the poor than serious economic downturns. These have resulted from efforts by the government and/or the Federal Reserve Bank to improve the economy. No one can improve an economy. Those efforts cannot help but make it worse. The faulty efforts I know about are detailed in Chapter 2. Those are not counted among the thirty-five outlined here.   

Policies That Hurt the Poor 

Government Lotteries trigger gambling addictions and breed poverty. States advertise aggressively in poor areas, encouraging people to treat lotteries as investments, not entertainment. In effect, these are regressive taxes.

Occupational Licenses: Nearly a quarter of Americans require occupational licenses to do their jobs. The licenses require fees and long periods of training which people with low income cannot afford. People in an occupation lobby government to keep others out. The resulting shortage of workers raises prices, causing the poor to be hit twice: They’re excluded from the licensed jobs, and they also pay higher prices for their purchases.  

Rent Control: When building restrictions put apartments in short supply, rents tend to rise. State and local government therefore impose rent control, which requires landlords to keep the rent payments level for as long as the tenant remains in the apartment, despite the landlord’s rising costs. The beneficiaries are older, relatively prosperous tenants whose lives are stable. The rent can be raised to market levels only when the tenant vacates. Younger, less-prosperous people who move frequently must continually face high rents.

Minimum Wages: The hourly labor of some of the poorly educated is worth less than the minimum wage. The average person subject to minimum wage, including wives of working husbands and youths still at home, lives in a household with total income of over $50,000. The laws do little good, but cause substantial harm.

Rich, Powerful, and Relatively Independent Unions could not exist in their present form without the federal laws that support them. The wages of union members, not set by free markets, are forced unnaturally high by union pressure, raising everyone’s costs. The poor, who are generally not union members but who spend most of their income on living expenses, are the most affected.

The War on Drugs have been far longer, costly, and damaging than the prohibition of alcohol was in the 1920s. The criminalization of drugs causes their prices to rise, attracting suppliers who are willing to disobey the law. Supply increases, and this stimulates higher demand. Suppliers of illegal drugs enforce their property rights with violence, most of which occurs in poor areas.

Food Subsidies: The U. S. Farm Bill of 1973 and its successors pay billions of dollars every year to prosperous farmers who produce staple commodities, especially corn. Around 1973, obesity began to develop in America. Obesity is a leading cause of premature deaths. Over a quarter of the population is now obese. The foods causing the obesity are the very ones receiving the federal subsidies. They are also the cheapest, causing the poor to be affected disproportionately.

Crony Capitalism: When government is big, the rich gain wealth faster than the poor because they induce government to help them. If government were small, the poor would probably gain wealth faster than the rich because they’re willing to work harder.

Government Welfare creates dependency and also hinders recipients from obtaining jobs. Say a woman who receives $200 a week from welfare is offered $300 a week from a 40-hour-a-week job. But the job would terminate her welfare, making her effective income rise by only $100 a week, or $2.50 an hour. She chooses to remain on welfare. Private welfare organizations would deal more sensitively with all such problems.

Prostitution: Some low-income women need prostitution to support themselves, but without being considered criminals. It is only in illegal industries where participants are mistreated and held against their will. Not so in legal industries. Once legalized, prostitutes would be esteemed and could hold their heads high for performing a valuable service.

High Regulatory Costs of Child Care: Heavy regulations in some states have made the costs of child care exorbitant, making it almost impossible for low-income, single parents to obtain jobs. In their pursuit of perfection, officials disregard the financial strain. Child care should be left to the people and free markets to solve.

Price Controls on Interest Rates: For many years, the Federal Reserve Bank has kept interest rates unnaturally low. Banks lend to the rich because the risk is low and repayment seems assured. But they’re less likely to lend to the non-rich, because the low interest returns may not match the higher risks. The gap between rich and poor is thus widened.

Restricted Real Estate Markets: Like automobiles, houses cost more than they’re worth when they’re new and less than they’re worth when they’re used. The prosperous would overpay to build houses. When they vacate, the less prosperous would underpay to move in, transferring enormous value from rich to poor. This huge, non-government income-transfer program is prevented because government intrudes so heavily in real estate markets.

Government Subsidies cause people to arrange their affairs to obtain it, and the change is often not in the best interests of the nation. When offered a subsidy, for example, businesses tend to replace engineers with lawyers. (This issue is not discussed elsewhere.) 

Social Security Inequities: Social Security benefits terminate when a person dies. The life expectancy of black men is significantly shorter than the life expectancy of white women. Therefore, the Social Security (FICA) taxes paid by black men support the lives of white women, not the other way around.

Policies That Hurt Everyone

Since the poor spend most of their income on living costs, policies that hurt everyone affect them the most: 

Healthcare: With the first dollars of healthcare costs paid by insurance companies or government, as they are now, consumers have little need to inquire about costs. Healthcare costs are therefore about double what they should be. If healthcare consumers paid all of their healthcare costs each year up to the amount of a reasonable deductible on their insurance policy, they would take great interest in healthcare prices. The competition among suppliers, would drive costs way down. All costs above the deductibles would be covered by inexpensive catastrophic insurance policies.

Taxing the Rich, especially at high tax rates, does not help the poor. The prosperous do not spend all their income. They invest the excess, and this generates jobs for the poor. The income the poor earn (and the higher morale they experience) from the jobs exceed the income the poor would have been paid in welfare.

Reducing Political Professionalism: Regardless of party, the longer members of Congress remain in office, the more they favor big government. House and Senate members should be limited to one term each, with their pay significantly reduced. People running for office would not expect to stay long. It would be “their turn to serve.” The pressure to appease interest groups would be reduced sharply. Members could focus on getting rid of what are probably millions of harmful laws and regulations.

Zoning impedes the operation of a free-market economy. Without it, factories would not be built in residential areas, because residential land is too expensive. Despite having no zoning, Houston, Texas, has thrived. Zoning has been particularly hard on residents of California.

Federal Regulations: In 2018, Washington bureaucrats issued eleven regulations for every law passed by Congress. The cost, $1.9 trillion, was greater than corporate and personal income tax revenues combined. The estimated annual cost to each U.S. household, on average, was at least $14,600.

Bank Deposit Insurance induces depositors to care about a bank’s interest rate and convenience, but not the money’s safety. The guarantees have made possible the tremendous expansion of debt throughout the economy. Without them, big depositors would have found ways to assure the safety of their money, reducing the nation’s level of debt and benefiting everyone.

Davis-Bacon: Contractors must pay construction workers on federally funded jobs “local prevailing wages.” This artificially inflates the wages of construction workers and requires an army of bureaucrats to enforce its measures. It also substantially raises the prices paid by travelers and consumers for the public works they utilize. (A more elaborate explanation of this issue is not provided in this book. This is it.) 

College Education has deteriorated as the federal government funneled an enormous amount of money to colleges and also subsidized and guaranteed student loans. The colleges raised tuitions anyway, building elaborate student centers and hiring thousands of administrators. This made college less and less accessible to the poor. Except in the sciences, the minds of the students have been filled more and more with mush.

Tariffs: Tariffs are taxes. They weaken the economy. Whatever is taxed you get less of. If steel is subject to tariffs, you get less steel for the money. For decades, Hong Kong imposed no tariffs on any product it imported, even if opposing countries did charge tariffs on products it imported. It’s no coincidence that Hong Kong was, for decades, the fastest growing country in the world.

Drug Testing: All drug testing should be performed by the private sector. Since government has no profits, bureaucrats give high priority to the avoidance of blame and tend to keep effective drugs off the market longer than necessary. More lives have been lost because of the delays than have been saved by the government assuring itself that the drugs are safe and effective.

Flood Insurance: The government sets flood-insurance premiums unrealistically low. The benefits are substantial and obvious for seacoast dwellers. The per capita costs are tiny and hidden for each of the Americans who share in the costs by paying a few extra pennies of taxes. People of low income, who can’t afford coastline real estate, pay the costs but gain no benefit from the faulty policy.

The Jones Act requires that goods shipped between U.S. ports and territories must be carried on ships built in America, 75-percent owned and crewed by Americans, with the shipped goods never sold to foreign citizens. It’s supposed to protect U.S. shipping. But plenty of shipping to and from the U.S. has been protected out of existence. Repealing the law and using cheaper foreign-made ships would increase the volume of ships operating in U.S. waters, stimulating the economy.

Price Controls on Products: The federal government keeps the prices of sugar, citrus, and other products higher than the world prices. The beneficiaries are the few companies that supply these products, while the per-capita costs paid by the rest of Americans are minuscule. The benefits to the few are obvious. The costs to the many are hidden. 

Postal Service: The 630,000 U.S. postal employees are the world’s highest-paid semi-skilled workers. The price of a one-ounce, first-class letter is currently 55 cents whether it’s sent across the street or 7,894 miles from Concord, NH to Guam. This is nuts! Prices should be set according to costs. Technology is rendering postal services obsolescent. We can send emails for free. Covering the increasing postal deficits with taxes or piling them onto the federal deficit is outrageous. Privatizing the postal service would save a bundle.

Harmful Policies Many Consider Unthinkable to Reverse

Schools: Government should neither educate nor fund the education of anyone at any level. All schools should be owned by individuals, associations, or corporations, with or without profits. With income tax rates reduced, prosperous citizens would help pay the costs of central-city schools.

Global-Warming predictions have consistently been exaggerated. The computer models of proponents are guesses, not scientific fact, and can readily be manipulated. The politicization of science stems from the personal income of scientists coming directly or indirectly from the federal government. Advancing technology will reduce CO2 before many years. Fears about global warming are way overdone, and the unnecessary costs are enormous.

The Deep State: The Pendleton Civil Service Reform Act of 1883 created a permanent, merit-based bureaucracy which now numbers 2.8 million individuals, whose salaries and benefits greatly exceeding those of people with equivalent private-sector jobs. Although I am unaware of them raking off money from the government bucket for their own benefit, they do collectively influence policies to increase their power, avoid blame, and add to their budgets. It’s an indirect but massive form of corruption. Today’s bureaucracy is far more damaging than that of the former spoils system. It’s time to trash the Civil Service and drain the swamp.

The National Debt is already higher than the year’s gross domestic product. It cannot accumulate indefinitely. Current Americans blithely expect future Americans to limit their consumption to repay it. But future Americans will be unwilling to bear the brunt of our profligacy. If the debt continues to grow faster than the economy, the federal government would eventually go bankrupt. Runaway inflation would make savings worthless. Social Security and Medicare payments would stop. Banks and insurance companies would go under. Widespread bankruptcy would prevail, and consumption would fall sharply, hurting the poor most. Blame would likely fall heavily on the Jews. Is there a happier scenario? Yes.

Governments Should Sell the Lands They Own but Do Not Themselves Occupy: Forests, rivers, mountains, parks, prairies, reservoirs, aquifers, swamps, deserts, tundra, and national parks should be auctioned to the highest bidders. About eighty percent of Nevada and sixty percent of Utah would go. The management of these lands would improve, and the costs would decline.

Interstates, Bridges, and Streets should be sold to the highest bidders. Technology will enabled owners to know who is using their roads and charge them accordingly. Trucking companies would be properly charged for road deterioration, which they are not now, reducing costs for everyone else. More goods would be carried by privatized rail, this being cheaper than trucks.