How to Revive the Economy, Op-ed

The opening quote in Ron Kitchen’s book Community Capitalism is “The best social program in the world is a well-paying job with health care benefits and a retirement program (Ewing Kauffman).” struck me hard in light of the constant negative or trivial din in the media.

The top story almost every night on the news since 2007, wow 5 years now, is the Great Recession. I find it sickening that few politicians and leaders in the private sector are voicing good ways to revive the economy. Have you heard many creative ideas? Have you read or even heard of any great books about this?  Where is all of the intellectual capital our country has in providing leadership?

Part of the problem is the media, they only like to report bad news, stories about celebrities, what the presidential candidate said yesterday (picking apart every sentence with a panel of experts – how boring) and sports. We’ve heard enough about the Queen’s Diamond celebration, John Travolta, Trayvon Martin and George Zimmerman, or the sport that you follow. We know the jobs report isn’t good, ObamaCare is going to cost trillions, the world economy is stagnating and other bad economic news, in fact we are fed daily dosages of this negative news. This creates an aura of fear that will actually retard the recovery, how you might ask?, just wait…

Actually the US economy isn’t as bad as it may seem on the nightly news. A lot more people are back to work now than in the last few years. The stock market is recovering, although with bumps. Interest rates to borrow are the lowest in over 50 years. The Dollar is stronger than many foreign currencies. Fewer houses are going into foreclosure. Is there a lot of suffering out there still, yes.  Still pain, but reason for hope, not fear.

The solution isn’t political (although that would help, and I will get to that). The solution is leadership. Leadership in business, academia and the pulpit. Lastly leadership from the media. What do the leaders need to talk about? The answer is capitalism, entrepreneurship, and hard work. Taking risks on starting new businesses, learning new things, taking on new jobs to pay off debt so that you are financially free to consider starting a new business. Pushing through fear and taking risks.

Is the economy going to take time to recover, yes. But the answer isn’t tax policy (although tax incentives would help new and existing business, and a more fair and less complicated tax system would be nice). The answer isn’t more entitlement programs, although a lot of people really need them, but we have to careful putting too many people into a dependence relationship on government, since it only creates long-term adult children living in the spare bedroom. Yes health care costs and availability needs to be better, but can be fixed easily through insurance pools, greater efficiency (simplification) and limits on law suits. The answer isn’t more regulations, although it might be good to have better oversight of Wall Street to prevent the next debacle.

I am more hopeful than ever, the future landscape is bright for our country. This recession is shaking things up, and creating space and opportunity for a new wave of business start-ups. These will create many new jobs, that have the potential to lead the world to a new era of prosperity. Pain causes fear, but for some, it breaks them free from where they were headed, into new areas of personal development. In the coming decade I expect to see ground breaking innovations that will come out of this, that we can barely imagine now.

The answer to reviving the economy is focusing on job and business creation, and education. More bi-partisan politics and government spending in those areas, business and job creation through tax incentives both for businesses and venture capitalists, and the media focus more on great business and community revival like featured in “Community Capitalism.”

There are surely more ideas on how to revive our economy, what ideas do you have?

5 thoughts on “How to Revive the Economy, Op-ed

  1. Very interesting perspective, Kent. Individual accountability is where it begins (and ends). We have so many people waiting for someone else to do something that the economy is far more stagnant than it has to be. True leaders will begin with individual accountability. Each of us is a leader, no matter where we are – we each have influence over others . . .

    What does that mean in practical, everyday application?:::

    The divine ecomony has only one rule – you will receive only that which you FIRST give away. If you are out of work, offer to help a neighbor with a project without pay. If you want to stretch your grocery budget a little further, donate a few small items to a food pantry. If you feel distressed or disappointed by your current situation,visit relatives you haven’t seen in a while and find ways to help them with THEIR struggles (not yours). . . In other words, focus on someone else for a while and see what begins to happen for you! From personal experience, I know that when you give away first (no matter how impoverished you feel) you will find that you are actually richly blessed and have a lot more to offer than it may seem. Listen to a different voice (not the media), and you will find that things start happening for you. Each of us controls the situation more than we think. It’s community capitalism that really works – try it for yourself!

  2. Kent says:

    Laura, that is an awesome comment!

  3. Jason says:

    I really LOVE Laura’s comment as well. I found helping out those who are less fortunate than you helps you feel much more grateful for what you have, and helps die a little to that selfish part of all of us that feels “entitled” to more.

    My general understanding regarding entitlements has been changing due to my personal experience. Due to financial stress and some disability issues, my family is on government assistance right now. It’s a very humbling experience, but due to issues entirely out of my control I couldn’t feed my family, purchases uncovered medical services, and provide specific, medically-required, dietary-restricted foods to my family on my income (full-time job requiring a bachelor’s degree or NUMEROUS additional part-time jobs). We have been qualified for this assistance for a long time, but didn’t need to take it thanks to lessons learned from Dave’s class until recently when another disability cropped up in one of our children.

    I did the math with one of my friends and I’d have to make nearly 15K more in total compensation (healthcare, benefits, and paycheck) than I make NOW in order for a job to be desirable from a strict financial perspective. The way the current system works if you make one penny more than that level you lose ALL the benefits. My economics professor from grad school would just call those folks “economic maximizers”. I work for a state agency that in part helps people on disability benefits return to work if it makes financial sense. I can’t tell you HOW MANY clients deeply desire to return to work, but due to the all or nothing design of the entitlement system they are unable to return to work at risk of their own lives due to inability to afford life-sustaining medication and treatment.

    Working in social work has taught me that many more people than the general middle-class population realizes WANT to get off government benefits, but the design of the system is such that doing so violates the very economic principles that business schools teach!. For one thing, the majority of the folks on food assistance are children (many of which are obviously unable to work). I’d have to go to a MSW friend of mine to get the specific numbers/citation, but children compose around 80-90% of the beneficiaries. For those with disabilities that I work with, the loss of these systems would mean the literal deaths of thousands of people.

    Given these professional and personal experiences, I believe a tax system that supported business growth and job creation (as you state in your article, Kent) plus a graduated safe net system (which I would would love more church involvement personally for certain aspects) that provides economic incentive to return to work, better ones self educationally or in job skills would be the best means of achieving the goals of an economic recovery without dramatically increasing the suffering of those least able to provide for themselves.

    1. Kent says:

      Another great comment, my post wasn’t intended to cast a negative dispersion towards entitlement programs or those who receive them, I hope it didn’t come across this way, having gone through difficult times and work with a lot of people who do, I have certainly appreciate and value them, it just seems like we hear little about job creation ideas

  4. Jason says:

    Thanks for the clarification. I just happen to have lots of friends that have not gone through hard times that feel that all these programs should be removed entirely. I’m all for systematic reform based on a continuous process improvement model, but I believe many of the programs serve a very good purpose for society and the economy (e.g. WIC) that in some ways are cheaper than the alternatives (damage to cognitive abilities of children due to poor nutrition that is not ever able to be regained).

    I totally agree on fostering job growth. The tax code overhaul does seems to be the most obvious method of going about this on a macro level. I also believe some sort of option for pooling healthcare costs to make it affordable for entrepreneurs would increase the risk taking necessary to start more businesses. I know from being laid off that private health care costs are prohibitively expensive, and one negative health event could bankrupt you very easily. I hope this idea of focusing on the positive ways of generating job growth takes off in the social media sphere, and see if every day Americans can solve this crisis instead of politicians!

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