The president recently spoke to a group of UPS workers in Nevada, where he expressed his wants and desires for the economy. Referring to his SOTU speech, he told the crowd, “…where we’re making stuff and selling stuff and moving it around and UP
S drivers are dropping things off everywhere.”
Last time I checked our economy operated on that model, typically called a free market. If the president and members of Congress envision an economy of “stuff,” perhaps they need to get out of the way and let stuff happen. Here is an analysis and some suggestions for the president’s vision:
“Where we’re making stuff…”
Sure, many Americans would love to make stuff or make more of the stuff they already make. However, there are many impediments to making stuff:
- Government regulations on all levels dictate what and how stuff should be made: Cars, light bulbs, appliances, gasoline, children’s toys, food products, building materials, electricity, toilets and a myriad of other products.
- On top of that, cities and states have their own rules on how stuff should be made, when stuff can be made, and how big, small, safe, noisy or aesthetically pleasing stuff should be.
- Moreover, government wants to crack down on where stuff is made, by punishing stuff-makers who move some of their stuff-making factories overseas, even if it means more affordable products for American consumers.
“And selling stuff…”
In the world of a complicated and punitive tax and regulatory code, selling stuff is also a challenge. Most people who make stuff wish to sell it for a profit, but not so fast; selling stuff for an unreasonable amount of profit (and has anybody yet defined what is unreasonable?) means being taxed, regulated or even chastised in the next SOTU address. Some members of Congress want to establish a board of “reasonable profits” to impose stiff taxes on oil companies that make excess profits. But what are excess profits? Sure, altruism is needed in this cold, cruel world, but few people will earn a decent living by selling stuff at below cost. (For more insight on why socialism doesn’t work, see my blog post on the Occupy protests).
“And moving it around…”
Moving stuff around is great. In fact, making, selling and moving stuff to other countries’ consumers is a fabulous way to increase Americans’ standard of living, boost the American export base and allow consumers a wide variety of products from all around
the globe. It’s called free trade. But according to protectionists, this pesky notion of free trade has its problems. It means that in exchange for selling our stuff to other countries, we get to buy stuff from these countries in return. Some of that stuff may be cheaper than the same stuff made domestically. But protectionists leave out an important part of the bargain. In exchange for locating some jobs in areas where the demand for stuff is high, we allow foreign investors to locate production plants here in America that employ American workers.
And don’t forget, moving domestic stuff is no easy task either. Some states don’t allow stuff from one state to be shipped to another state. Usually stuff containing alcohol falls into this category.
It is time for policymakers to stop preaching and start acting on the government-imposed taxes and regulations that create barriers to making, selling and moving stuff.