I spent some time recently looking for resources for a friend of mine to teach Economics. While looking, I happened across a Forbes 50 Over 50 article titled, "Kamalanomics: Vice President Harris Outlines Her Vision Of Inclusive Entrepreneurship." I had assumed this was an Op Ed written about Vice President Harris, but to my surprise it was written by her. The Vice President has degrees from Howard University in Political Science and Economics; both of which are common undergraduate degrees preceding a legal career. So, I know that the Vice President has the educational background to know at least the fundamentals of economic thought. But does Kamalanomics offer anything new and groundbreaking?
She begins the article with an anecdote about a damaged bridge in the 1989 earthquake. It is with this analogy that we can see Harris's whole vision of how the economy should operate: central planning.
Leaders then had a choice—to restore the bridge to how it was, or to reevaluate and strengthen its support system to withstand future shocks. They chose the latter.
At first glance, this seems very forward thinking of the local leaders and, for this particular narrow example, was the obvious choice. However it misses the reality that the economy is not an infrastructure project. It is not pavement, concrete, and steel. It is millions of individuals making independent decisions apart from the influence of a government. But in Kamalanomics, government can make economic decisions and plan an economic system that meets particular economic ends.
She raises important problems that have arisen in the past year and a half. She writes, “one in three small businesses have closed. Nearly two million women have been forced out of the workforce. And millions of families have struggled to buy groceries and cover rent.” She also raised the issue that, with schools closed, millions of parents now were without child care. All of this is true and undeniable.
But what was the cause of these problems? One might think it was the pandemic, but a simple comparison between states shows us otherwise. Those states that had fewer Covid restrictions and lockdowns were impacted the least by the recession. (1) The pandemic was universal; it impacted all 50 states. The only differences between states that would account for heavier economic decline in some over others is government action. Regardless of how we feel about states' responses to Covid, we all must agree that we did not see market failures, we saw a government-caused economic downturn. We could discuss the important tradeoffs here, but that is a separate issue.
I don't say this to argue in favor of particular Covid policies. I write this only to show that the Vice President and the President are operating on a faulty premise that American capitalism must be rebuilt by government ("Build Back Better"). It seems a bit like putting the arson in charge of fire inspections.
What is her solution to these government-caused failures? "Improve roads to transport goods, improve transit for consumers, and ensure affordable and accessible high-speed Internet." She does not address removing legal barriers to entry. She does not address the complexity of finance and tax regulation that every entrepreneur must have (or hire) an expert understanding of. Kamalanomics offers the same central planning we have seen since the New Deal. That is because, to central all planners, the economy is a system of pavement, concrete, and steel.