Home Financial Record Our Economy Works When Consumers Pick Winners | Brunell

Our Economy Works When Consumers Pick Winners | Brunell

0


[ad_1]

Poland and America are like two trains crossing in opposite directions. This is becoming increasingly clear as President Biden rolls out his progressive agenda. The key question for the future: “Will government or consumers drive our economy?” ”

Poland broke the chains of Soviet communist rule three decades ago. Free for the first time since World War II, Poland has abandoned its yoke of government control and central planning in favor of an American-style free enterprise system where consumers, not elected officials or bureaucrats, determine investment, production and purchasing decisions.

Today Poland is the largest eastern economy in the European Union, the only member to have avoided a recession in 2009. In 2019, the Polish economy had been growing steadily for 28 years, a record in the EU . That was before the coronavirus threw the world economy into free fall.

In contrast, the United States has moved towards more government control, tighter mandates, stimulus through direct subsidies, tax breaks and tighter regulations. The glaring example is the desire to eradicate gasoline vehicles and abandon the production of electricity and natural gas-fired heating in homes, buildings and factories.

In America, there is a gargantuan “showdown” between those who want more and more government control. This battle took place in our 2020 national elections.

Personal animosities aside, there was a fundamental difference between an economy under Donald Trump and one under Joe Biden. Biden believes the path to restoring prosperity is through more government intervention, higher taxes, more regulation and subsidies – and that’s where America is heading.

But government intrusion never works, and as the Polish people know all too well, it leads to shortages, higher prices and lost opportunities. The Poles wanted to import American innovation, which led to Washington Business Week establishing market-oriented economic education programs in Gdansk and Gdynia.

They were eager to learn more about the innovation and creativity of our market economy and how to apply it.

A visit to the Solidarity Museum in Gdansk is a stark reminder of life under a system of government control, restricted freedoms and mediocrity. One of the museum’s exhibits is a series of empty grocery shelves, a haunting reminder of the days when working poor in Poland had only a meager choice of rationed food, clothing and household supplies.

Polish leaders considered Ford Motor to be emblematic of how our system worked. When Ford executives recruited Alan Mulally from Boeing in 2006, Ford was heading for a loss of $ 12.7 billion. Poor management and uninspired models meant that Ford was on the verge of losing its No.2 spot in sales in the United States to Toyota.

Mulally’s leadership led to one of the biggest turnarounds in business history and it happened without a bailout from the federal government. He immediately took a risk and led the effort to get Ford to borrow $ 23.6 billion by mortgaging all of Ford’s assets.

He used the money to fund a major overhaul and provide a cushion to protect against a recession or other unforeseen event. At the time, the loan was interpreted as a sign of desperation, but it is now widely credited with stabilizing Ford’s financial situation.

Four years after Mulally’s arrival, Ford reported a profit of $ 6.6 billion – the biggest in the industry that year – and Toyota’s ads compared its cars to Fords, not Hondas.

The Poles have rejected increased government control over the market, with government picking winners and losers, and government planning what consumers get and what they don’t. They remember what it was like under this style of government.

America’s economic freedoms inspired a revolution in Poland, and it’s time we remember what made our nation the envy of the world.

Don C. Brunell is a business analyst, writer and columnist. He retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and lives in Vancouver. He can be contacted at [email protected]

Due to the way we express our opinions in the modern world, we have closed comments on our websites. We value the opinions of our readers and encourage you to keep the conversation going.

Please feel free to share your story tips by emailing [email protected]

To share your opinion for publication, send a letter through our website https://www.valleyrecord.com/submit-letter/. Include your name, address, and daytime phone number. (We will only publish your name and hometown.) We reserve the right to change the letters, but if you limit yours to 300 words or less, we will not ask you to shorten it.


[ad_2]

LEAVE A REPLY

Please enter your comment!
Please enter your name here