Whatever The Market Will Bear
We are currently in the slowest recovery from a recession in American history. Seven years of GDP (Gross Domestic Product) growth at or below 3 percent.
In order to have a vibrant economy and full employment we should be growing our GDP at a minimum of 4 to 5 percent or more.
A growing number of pundits blame the US government for not doing more. My question would be — why is government needed at all?
The Market Place
Businesses not only supply markets they create them. Henry Ford created a market for automobiles. Before the first Model A rolled off the assembly line, the cry from consumers was for bigger stronger horses.
Before electricity and natural gas, whale oil fueled the lighting in most homes.
The point is that you need more than just an idea. You need an idea that will be attractive to enough people that you can make a living supplying that needed product or service.
Many businesses find themselves at loggerheads with excessive government regulations when bringing their products to market.
Government picks and chooses what to tax and what to subsidize for various reasons. If you want less of something then you tax it; if you want more of something you subsidize it.
Government subsidized General Motors and Chrysler but not Ford during the last recession. The result — GM still owes the taxpayers money to this day and Chrysler was sold to a foreign company.
Carrier Air Conditioners and Oreo Cookies are going to be made in Mexico. Why? Because laws and regulations and taxes imposed on small business have made it impossible to compete on the world stage by remaining in the United States.
Consumers have choices. You can buy a Lexus or a Chevy. One is much more expensive than the other. You can dine at Four Seasons or McDonald’s.
The marketplace calls the shots and business has to find ways to create demand in the mind of the consumer for products and services.
The marketplace didn’t demand microwave ovens so they could cook faster or a dishwasher or clothes dryer.
The consumer asked for more free time to do other things and business obliged by creating time saving products that could be sold at a profit.
Some Final Thoughts
There should be no need for any product or service to be subsidized by government. If it’s not profitable then that idea needs to return to the drawing board and be refined to the point it is profitable.
If unreasonable regulations or taxes are the problem then reasonable people need to be elected to office that will improve marketplace conditions.
Bringing a product to market is no cakewalk. But people do it every day. The free market works best when it’s free to flourish.