The Presidential Candidate Who Would Destroy the Economy
Reason Magazine has put out its pre-election compilation of its writers' statements about whom they will be voting for and why. The Reason staffers are more unanimous than usual in their support for the Libertarian Party nominee, Gary Johnson. The usually reasonable Conor Friedersdorf of The Atlantic also backs Johnson.
This is unfortunate because Johnson has nutty economic policy views and would do tremendous damage to the global economy were he to somehow become president.
Johnson advocates severe near-term fiscal and monetary policy austerity. When we talked at (or rather, outside of) the Republican National Convention, he told me he would cut Medicare spending by 43 percent in the short term. He repeatedly insists that "we are in the midst of a monetary collapse" and says he favors returning the United States to a (deflationary) metallic currency standard. He says he would have opposed TARP and allowed systemically important banks to fail.
In other words, if Johnson had been president in 2008, he would have allowed the U.S. financial system to collapse and the country to fall into depression. And if he became president now, he would do his best to strangle the tepid recovery we are enjoying and turn it into another severe recession.
The Obama administration, Congress and the Federal Reserve have taken a lot of deserved flak for missed opportunities over the last four years: insufficient monetary easing, failing to address the problem of underwater mortgages, allowing the country to get uncomfortably close to hitting the debt ceiling. The result has been unnecessary unemployment and poor economic growth, which is terrible.
But while we should have done better, we also could have done so much worse. The Fed could have allowed the country to sink into deflation. Congress could have passed no stimulus package and no payroll tax holiday. We could have actually hit the debt ceiling or allowed the banks to fail.
Fortunately, when push came to shove, the Washington establishment was able to avoid those errors. Johnson thinks we should have made them. He would also drastically slash our entitlement system when only tweaks are necessary, leaving many of the most vulnerable Americans without benefits they depend on. This is an agenda that should give pause to anyone who claims not to be on the far-right fringes on economic policy.
I understand the desire to look for somebody different. I am seriously underwhelmed by President Barack Obama's economic policy performance, and I don't trust Mitt Romney. I understand Friedersdorf's moral outrage over drone strikes, which he says are a "deal-breaker." But I think sparking a severe (and entirely voluntary) economic crisis would be far more outrageous.
An economic depression would kill a lot more innocent people than Obama's drone strike program. Economic performance isn't just about money -- it's about people's ability to feed and house themselves and to obtain health care. Economic instability also feeds social and political unrest and can lead to violence and war. William Jennings Bryan had this right: Monetary policy is a moral issue and proposing to crucify mankind on a cross of gold is a "deal-breaker" for me.
Johnson's supporters sometimes argue that Congress would block him from acting on his worst impulses. But in a theoretical world where Johnson could win an election, Congress would look quite different. The president wields a lot of power with executive authority, the ability to make appointments and the veto pen. And "don't worry, Congress will stop him" is not an argument you should have to make about your candidate for president.
Read more breaking commentary from Josh Barro and other Bloomberg View columnists and editors at the Ticker.