Worldview Item of the Day
The Economist has a great article up about why the American economy works without overbearing government regulation: the dynamism of a system where people and businesses are allowed to succeed and fail in unending repetition based on opportunity.
The reason the American economy works is the same reason that living beings work. The human body, as an example, is constantly rebuilding itself by killing off malfunctioning cells and structures and replacing them with new cells and structures. In the economy, the failure of businesses creates opportunities for new business or for the growth of businesses in other areas than the ones that have failed.The current economic crisis is not a failure of the well-founded and well-proven American economic system to do what it does, but a failure of the regulation of financial systems that have tangential connection to the rest of the economy, as the Economist article notes. The financial sector and mortgage lending are not American capitalism any more than Social Security or unemployment benefits are, and the parts of the economy that are business continue to thrive in spite of what is happening to the crisis makers.
Business will continue to thrive, unless the federal government kills it. The irony of the government response to the current economic troubles is how much of that response is targeted at parts of the economy that are doing just fine without government interference. An example is the promised increased on the taxes of people who make more than $250,000 per year, which includes millions of small business owners who are sole proprietors or s-corporation owners.
While the current administration is trying to kill this system, it is not dead yet, and there is still hope to reverse even what has already been done. Election Day, 2010 is 15 months away, and in one election, we all possess the capacity to make our government into anything we want it to be. We can ensure that the economy that is already working keeps working. We just have to care.