Dear Government, U.S. Business Doesn’t Need You
It’s not Washington’s job to help out private enterprise. Pro or con?
Pro: We Don’t Want Your Kind of Help
Why does anyone think that business needs government help? If assistance from a large central government were really necessary for economic growth and job creation, the U.S. could never have blossomed from an agrarian economy into an industrial giant. Yet that 19th century growth miracle (the population alone soared from 5 million to 76 million) happened without "help" from Washington.
Many people think business needs Uncle Sam’s help to get out of the current economic mess. But wait, that mess was caused by government intervention in the first place. The solution, therefore, cannot be more of the same poison that sickened the economy—whether it comes in the form of runaway spending, mortgage promotion, import quotas, tax favors, or other forms of "welfare for business."
Take job creation, for example. President Barack Obama, Congress, and state governments all claim to have solutions for high unemployment. But high jobless rates are easily traceable to government programs that hamstring investment, product development, manufacturing, global free trade, and everything else that makes for a healthy economy.
Jobs are created by private businesses when they expand production, launch new products, and develop new markets. Government’s proper task is to protect the rights of these job creators (and the people who fill the jobs). That means enforcing laws against embezzlement, fraud, breach of contract, and all the other crimes and civil wrongs that violate the right to free, voluntary trade.
After that, government’s No. 1 priority is to butt out. Our lawmakers need to be pondering how to roll back the programs that stifle job creation. From Federal Reserve-driven currency manipulation that fogs up the economic prediction windshield to costly and demoralizing regulations such as Sarbanes-Oxley that treat businesspeople as guilty until certified innocent and on to runaway "stimulus" spending that sucks capital out of the private sector, government "help" actually kills business initiative.
If Washington wants to help business, it should focus on providing the freedom businesspeople need to succeed.
Con: Washington Can Empower Business
The federal government not only should but must help business stimulate the economy, especially in these difficult times.
Let’s be clear on what government should and should not do.
First, it should focus on the No. 1 concern of most companies: the uncertainty that hangs over the economy.
Corporate executives, investors, and entrepreneurs have serious concerns about the rules and regulations being written to implement the sweeping new health-care and financial-services laws: the Patient Protection & Affordable Care Act and Dodd-Frank Wall Street Reform & Consumer Protection Act. This uncertainly is stifling investment. And gridlock in Congress means they can’t effectively plan for the future tax structure and government expenditures. So they wait.
The best way for government to help private enterprise is by taking a step back, clearing the fog, and assuring executives and investors of stability in the nation’s tax and policy structure, allowing them to invest with confidence.
Politicians need to put America first and stop their partisan carping and pandering to special interests and campaign contributors.
Washington should also prove itself capable of managing its own affairs and put its fiscal house in order. How can Washington tell business what to do when it can’t manage its own finances, when its own experts don’t understand certain statutes (including the federal tax code), and when it’s constantly changing things?
By laying out a course of action and sticking to it, rather than zigzagging whenever the political winds change, Washington can encourage companies and investors to get back in the game.
Washington also needs to close loopholes and lower corporate tax rates, as the President has said, and show the business community that it intends to maintain a level playing field so all companies and industries—not just a select few—have incentives to innovate and expand.
Finally, Washington needs to create conditions in which America’s entrepreneurial spirit can thrive—rewarding venture capitalists who are willing to risk their money on somebody else’s dreams and establishing policies that encourage banks to expand lending.