I just finished a book called Freedom Forge by Arthur Herman. It is the story of how American business provided victory during WWII. If you are a history buff or interested in WWII, it’s a good read. The book chronicles how American business retooled and ramped up production of war equipment and materials so much that the Allies were better equipped than the Japanese and German armies. One theme that runs through the book is that during this time we had a federal government that was very powerful and deeply involved in running the economy and regulations were very strict. While the federal government was in control of military production, our factories couldn’t keep pace with demand. Production times were long and innovation was almost non-existent. We were fighting the war production battle with handcuffs on. The government began plucking people from private industry to be responsible for war production and many of these people worked for an annual salary of $1. Once that happened and these people from private industry began loosening the regulations and allowing private industry to make profit producing war materials, production skyrocketed and innovation flourished. American industry literally overwhelmed the enemy with ships, tanks, planes and artillery and it all performed at levels that the Japanese and Germans could only dream of.
Seems to me that we are again in those times where the federal government is very much involved in the economy. Regulations on business and industry are rising and our countries productivity in terms of GDP is creeping along at around a 2% annual rate. Not enough to reduce the unemployment rate much. In the last election, we heard much about some 47% of the populations dependent on the federal government for some kind of support. My guess is that many of those people would rather be their own source of support, they just can’t find the jobs to do it. Loosen up the regulations on the energy industry and let them do what they do best. Find and get oil and natural gas out of the ground. We will be energy independent before you know it and jobs will be created. Stop telling employers what kind of health insurance they have to provide for their employees and let the employers shop for the best deal for their business and their employees. If I’m a small business owner, I’m doing everything I can to stay under the 50 employee limit so Obamacare doesn’t affect my business. Not really creating many jobs that way. How many Privacy Policy Statements do you receive in the mail each year? Do we really need a regulation that requires a business to send out a statement to all their clients annually describing their policy on sharing your information with anyone else? Do you know the time and cost it takes to produce and send out that statement each year? Why not just give the client one in the beginning of the relationship and if anything changes, send them an update. Why do we need the government setting gas mileage requirements for cars? If consumers demand better fuel efficiency, they will buy the cars that get the best mileage. Auto makers will get the message.
Our nation was under attack during World War II and there was an urgency and pressure to get production rolling. We had to take the handcuffs of too much government off and let industry do what it does best, innovate, produce and make a profit. While circumstances are a bit different today, if we truly want to get the economy rolling again, put people back to work, reduce the number of people dependent on government support and regain some control over spending, we need to take the handcuffs of government off and let industry do what it does best.
Mike Berry is a Registered Representative offering securities through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Legacy Wealth Management, LLC and Cambridge are not affiliated. Cambridge does not offer tax advice.
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