How to Turn a Recession into a Depression
Destroy business confidence, cozy up to socialists abroad, send deficits through the ceiling ― that should do it.


Victor Davis Hanson

It is hard for a president to turn a recession into a long-term downturn in the United States, given the inherent resiliency of private enterprise and America’s open and free markets. But if you were to try, you might do something like the following.

First, propose all sorts of new taxes. Float trial balloons about even more on the horizon. Subordinates should whisper about a VAT/national sales tax. Other aides should revisit campaign talk about lifting the caps on income subject to payroll taxes. A centerpiece of the effort would be to insist on bringing back the Clinton income-tax rates — but this time targeting only high earners and not putting commensurate caps on federal spending. For insurance in making things worse, raise capital-gains taxes. And why not add a new health-care tax surcharge? Let inheritance taxes kick back in. Hope that the states do their synergistic part by raising their own taxes at the same time. The trick is to dissuade businesses from taking risks, by making clear that any new profits are illegitimate and therefore will go to the government.

Second, business expansion is predicated on confidence in the future. Destroy that, and depression can become far easier to achieve. Often the decision to hire or to buy new equipment is psychological in nature — predicated on hope in the larger business climate. So to ruin that landscape, you might unleash a barrage of anti-business, anti-wealth rhetoric to remind job creators that they are already too rich from exploitative practices. The president himself might lead the attack against Wall Street, CEOs, doctors, and insurers. Now and then it would be wise to spice it up with a nice socialist quip such as “I do think at a certain point you’ve made enough money” — or digs about the wealthy needlessly jetting to the Super Bowl or Las Vegas. Try out lines like “keep the boot on their necks” and “know whose ass to kick.” Turn Koch Industries in the public imagination into something akin to IG Farben. Make the Chamber of Commerce the equivalent of Enron. Create a pantheon of good capitalists like George Soros, Bill Gates, and Warren Buffett, who never speculate, hedge, or seek monopolies, and set them against bad ones like Charles and David Koch. Remember, the aim is to let businesses know on a very visceral level that you simply do not like them.

Third, create an artificial economic divide of them/us. Pick an arbitrary figure, say $250,000 in annual income. Families above that figure are suspect and need to pay far more of their ill-gotten gains in income taxes — their “fair share” — to “spread the wealth” and achieve “redistributive change.” Once the capital of small businesses is demonized, they will either stop making any more or hide what they have. Either way, the economy fortunately slows.

Fourth, if one is really serious about undermining business confidence, then attack the very structure of law, statute, and custom. Reverse the legal order of creditors in the Chrysler bailout case to favor labor unions. Call the investors and creditors “speculators.” Pick a big number — why not $20 billion? — for BP to fork over for the Gulf oil spill. Have your labor secretary go on record as saying that illegal immigration is not really illegal; e.g., “Every worker has a right to be paid fairly, whether documented or not.” Sue the state of Arizona for trying to enforce immigration laws. Excuse sanctuary cities that openly flout such laws. Apologize to foreign governments, like the authoritarian Chinese, for Arizona, and then encourage other nations to join in on law suits against Americans. Again, the point is to fire a volley across the bow of businesses, letting them know that social awareness and progressive ideology trump strict enforcement of legal statute — and so they had better make the necessary adjustments.