It’s the Entrepreneur Stupid
I have a message for President Obama: If you want to save the economy, make the entrepreneur eager to invest. If you want to create your two million three million (wait wait, we have hope, let’s make it…) four million jobs, stop wasting money investing in ‘public works’ and start reassuring the entrepreneur.
The problem is that everything this country has done in response to this economic crisis should scare the entrepreneur, not encourage him to assume risk. It does not take an Austrian to realize the power and potential of the entrepreneur in the American economy. First of all, what can the entrepreneur do? According to Israel Kirzner the entrepreneur plays a critical role in the economy thanks to his or her ability to be alert to new and shifting opportunities. After all, it is the entrepreneur who will create (and alter) what goods are produced as well as where and how they are produced. Entrepreneurs, through their keen alertness to profit and trepidation of losses, will adjust production activities to best respond to market demands. In other words, if you let the entrepreneurs among us go freely, we will sort out the bad assets from the good naturally.
There in lies the problem. What entrepreneur can act freely at this juncture? The stimulus bill hinders economic activity in many ways, not the least of which is its massive borrowing. This capital could have been used by entrepreneurs for economic endeavors not based on the ruling class’s whims, but based on those insane ideas of profit and loss. Let’s not forget the rhetoric of Washington these days: blame capitalism, blame greed, and regulate, regulate, regulate … and soon … nationalize! With that coming from the statists in Washington, what entrepreneur is feeling confident in assuming risk in this country? Let’s not blame Obama entirely, the Bush crew, also deserves some blame. It was Paulson and Co. that bullied the largest banks in the country to take Federal money. In the case of Bank of America, taking that money also meant taking all of Merrill Lynch’s assets at a price that the market had entirely rejected. This is not an environment fostering entrepreneurship, it is one downright hostile to it!
There are a ton of ways in which the government foster entrepreneurship, I don’t think I could recommend them all here. But I do have one idea. One idea that is entirely not remotely a possibility, but one that would provide instant ‘stimulus’ is an immediate 25% cut of the minimum wage. True, an abolishment would be better, but that wouldn’t have the same air of practicality now would it, let’s be reasonable. There is obviously a surplus of labor in the country right now and given that surplus there is obviously a large number of unemployed Americans who would be willing to work for less, but are currently being priced out of the market.
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