In 1933, the U.S. government implemented a Depression-era policy of “keeping prices high” by not only requiring that that farmers be paid not to grow food, but mandating the destruction of existing crops, the plowing up of cotton, and the killing of pigs and pregnant cows-all at a time when millions of Americans were going hungry.
Such misguided depression-era policies so alarmed the concern of British economist John Maynard Keynes that he wrote a letter to President Roosevelt pleading that Roosevelt adopt a policy of increasing demand rather than a populist agenda of reducing supply.
Unlike the letter Roosevelt received later from Albert Einstein warning of Nazi efforts to produce a nuclear weapon, Roosevelt filed away Keynes’ letter, and persisted in his refusal to reduce taxes in order to enhance demand, and instead took the opportunity at the worst possible time to impose yet a new round of taxes in the form of the payroll taxes. The result of such self-defeating policies was the Depression of 1937, which made the earlier Depression of 1929 look like a picnic.
Given that PETA might look unkindly on burying pigs and pregnant cows alive, the present administration has nevertheless pursued the same depression era policies of “keeping prices high” by choosing a different class of objects for destruction and labeling such policies with more politically acceptable euphemisms – like “Cash for Clunkers.”
Under the current program, consumers are to be induced by offers of $4,500 in cash to bring in their current cars so that they can be immediately destroyed. Within hours of handing in the cars, the law requires that they be given a toxic dose of sodium silicate while their engines are run at 2000 rpm to insure total destruction within three to seven minutes-presumably to insure that no other human being could possibly employ them for any useful purpose.
While perhaps more humane than burying pregnant cows, its purpose of reducing supply and keeping prices high is in line with classic Depression era economics policies of the kind that prolonged the Great Depression for another four to five years.
Since the program is being touted as a means of inducing car buyers to buy new cars which get a few more miles per gallon, few citizens are likely to look a $4,500 cash gift horse in the mouth, and indeed few have done so as over a billion taxpayer dollars have been gobbled up in just two weeks of a program intended to last a year. As a result, the Senate is now considering a bill to seize another two billion from taxpayer coffers to keep the program running for some additional weeks.
And where will the half million cars already destroyed find a home? Presumably in such landfills as the one in New Jersey within sight of the Statue of Liberty, which has now reached a height as high as the Great Pyramid of Giza, leaching its toxic metals into the soil.
Unfortunately, there is no John Maynard Keynes to plead for a policy of increasing demand by reducing taxes rather than reducing supply – though admittedly such a policy would be politically unacceptable given that almost half of U.S. citizens currently ay no federal taxes at all-and so it is likely that the failed Depression-era policies of the past will continue to be implemented under new names and labels.
At least those who implemented this program won’t have to worry about PETA.
Robert Hardaway is Professor of Law at the University of Denver College of Law, and the author of “Population, Law, and the Environment” (Greenwood Press). EDITOR’S NOTE: This is an online-only column and has not been edited.
