I felt like punishing myself the other day so I picked up The New York Times and read Paul Krugman’s column — oh, I’m sorry, Nobel laureate in economics Paul Krugman’s column. The title of the column was “Resolved: The United States is not a corporation.”

About the only thing I agree with him on is the title. The United States is not a corporation, if it were, we wouldn’t have $16 trillion of debt and still be able to borrow money and write checks. According to the Nobel laureate, the “notion that greed is good is the major reason that income has grown so much more rapidly for the richest 1 percent than for the middle class.”

Krugman makes the same mistake that others like him make and that is mistaking ambition for greed, confusing the drive to excel with the drive to dominate, and for creating wealth for exploiting employees. They simply assume that if someone wants to produce to the best of his or her ability that he or she is evil, power hungry or, in a word, greedy.

The next mistake they make is thinking that the wealth pie is fixed instead of ever-expanding. The wealth pie is limitless, but no one is entitled to a piece — they have to work for it and earn it.

Government can only shrink the pie. The government does not create anything but debt. There is no question that it hires people and thereby create employees, but the government does not produce a product. Does the government create value for its citizens? Certainly, at least it is supposed to, but it should be limited to protecting private property rights.

Only private companies can create meaningful jobs that produce products that people need and want. Don’t believe me? Look at what happens every time government gets involved with real business.

Solyndra, General Motors Co., Chrysler, Fannie Mae, education, the mail, and soon health care are all failures compared to what private enterprise could accomplish for a lot less money.

Profit is not a bad word and altruism/charity is not necessarily a good word (especially at the point of a gun).

To extract a few phrases from Krugman:

“For one thing, there’s no simple bottom line.” Meaning government has no bottom line and is not accountable to anyone for its spending. Captain Obvious strikes again.

“Consider what happens when a business engages in ruthless cost-cutting.” Ruthless? Cost-cutting is done to keep a business viable and profitable. Only a viable and profitable business can create products and jobs. Krugman feels that the purpose of business is to create jobs.

Krugman, excuse me, Nobel laureate in economics Paul Krugman, seems to think that many of the problems that Greece, Spain and Ireland have were caused by implementing austerity programs. Maybe if they went further into debt that would help them.

And finally, Krugman has to inject that our problems were made worse because of President Bush, since he was a businessman. I will grant him that President Bush didn’t do much to help capitalism but the people we have in the White House and U.S. Congress now are doing their best to completely destroy capitalism and consequently this country.

Business, and especially small business, is the backbone of this country. According to the mainstreetchamber-mn.org website article “America Runs on Small Business,” 98.2 percent of businesses had fewer than 100 employees, 89.3 percent had fewer than 20 employees, 78.6 percent had fewer than 10 employees, and 60.8 percent had fewer than five employees.

Small business’ are the job creators in this country, not General Motors or IBM or any of the big companies. That is not to say that the large companies don’t create some jobs but more than 80 percent of all of the new jobs created are created by these small firms.

Yet it is the big companies that get the breaks from regulations, government grants and loans and other political favors.

As a small business owner myself, I don’t want any breaks from the regulations, I just want the regulations that prohibit me from providing my services and making money to go away.  I don’t want government money because not only do I believe it is morally wrong but I don’t want to be obligated to anyone in government.

Government is not run like a corporation but it should be, corporations are not run like the government and thank goodness they aren’t.

Gary L. Rathbun is the president and CEO of Private Wealth Consultants, LTD. He can be heard every day at 4:06 p.m. on “After the Bell” with “Brian Wilson and the Afternoon Drive,” and every Wednesday and Thursday evening at 6 throughout Northwest Ohio on “Eye on Your Money.” He can be reached at (419) 842-0334 or email him at garyrathbun@privatewealth consultants.com.

Tags: A View from the Gulch, Chrysler, Fannie Mae, Gary Rathbun, General Motors Co., Paul Krugman, Solyndra, The New York Times

This entry was posted on Thursday, January 26th, 2012 at 4:55 pm and is filed under A View from the Gulch, Toledo Business Link.
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