People are often surprised by the unintended consequences of their actions. For example, it was forest management policy to aggressively put out wildfires for many years. That resulted in forests full of quick-burning fuel in the understory—and spectacular, devastating forest fires.
The government’s attempts to manage the economy have been no better. The more it has fiddled, the worse things have become. Now, the Brookings Institution is reporting an across the board decline in business dynamism around the country.
The Blue State Model suggests responding with more government intrusion into the economy. States such as Maryland are doing things such as raising their minimum wage above the national level. The unintended consequence will likely be that marginally skilled workers will be priced out of the legal job market to become more of a drag on a state budget starved because of reduced economic growth.
DaTechGuy suggests that the conservatives in the Blue States should call the Left’s bluff and let them pass such ill-conceived laws. He suggests that the result would be to drive economic and population growth to the Red State, increasing their clout at the national level. It’s a strategy not unlike letting a drunk keep going till he hits bottom.