How to Stop the World: How Over-Regulation, Over-Taxation and Crony Capitalism are Preventing the Growth of the American Economy

By Paul J. Ossowski

Since the 2008 recession the American economy has grown at a rate of less than 2% per year. This is far less than the growth rate after any other recession since World War II. Why is this happening? We are over-taxing, over-regulating and allowing crony capitalism to get in the way. This book explores the infrastructure and system of laws that are necessary for a successful modern economy. It takes a look at the status of each of those items in the U.S. It considers how well we are maintaining and growing our infrastructure, and then delves into the real problems. Our corporate tax rate is one of the highest in the world, we have a runaway regulatory system that continues to add hundreds of extremely costly new regulations each year, and we allow certain big businesses to have unprecedented influence on our politicians. Taken together these are having a massive negative impact on the success of our economy. This book is a quick and easy read because of its extensive use of examples and stories. Yet it makes a powerful case that some relatively simple changes could have a profound impact on the health of our economy and the well-being of every citizen.

• Language: English
• Publisher: Paul J. Ossowski
• Release date: Nov 15, 2015
• ISBN: 9781311297228

Paul J. Ossowski

I was born in Chicago, Illinois in 1956, graduated from Lewis University in 1979 with a degree in Economics and the University of Arizona in 1980 with an M.B.A. I worked for IBM for 5 years and then Raytheon for 29 years. I've been married to the same wonderful woman for 27 years and have two fantastic daughters. During this time entire time I've been refining my ideas about economic policy and government. Everything I've observed has made me an economic conservative, but socially more middle of the road.

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How to Stop the World

How Over-Regulation, Over-Taxation and Crony Capitalism are Preventing the Growth of the American Economy

By Paul J. Ossowski

Copyright 2015 Paul J. Ossowski

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Table of Contents

Introduction

Chapter 1. How the Economy Works

A. The Magical Cruise Ship

B. Ideas – And How They Cause Our Economy to Grow

C. The Growth of the Fast Food Industry

Chapter 2. What the Economy Needs to Work Best

A. Infrastructure

B. Rule of Law

C. Security

D. Educated work force

E. Entrepreneurial Culture

Chapter 3. How to Stop the World

A. Regulations

B. Corruption

C. Crony Capitalism

D. Corporate Taxes

Chapter 4. Taking Score

Conclusion

Appendix

About the Author

Introduction

In 2008 the United States suffered a severe recession. Many have called it the Great Recession because it was worse than any of the recessions we have had since World War II. It wasn’t as bad as the Great Depression that occurred in the 1930’s but it was extremely serious. The stock market declined by 50 percent. The labor market lost 8.4 million jobs – 6.1 percent of all employment. The unemployment rate hit 10 percent in October of 2009. In the fourth quarter of 2008 the economy shrank at an annualized rate of 6.2 percent. In the first quarter of 2009 it fell by another 6.1 percent. American business slashed capital investment at an annual rate of 38 percent. Investment in software and computer equipment declined by an annualized 33.8 percent, and investment in new buildings was down 44.2 percent.

There have been many recessions since World War II. The one thing they all had in common was that the country experienced higher levels of economic growth immediately after each one. The deeper the recession, the higher the rate of growth that would follow it. So the good news was that after the severe recession of 2008 we could certainly expect a very high level of growth.

But this time, it didn’t happen. 5 years later, 5 million of the 8.4 million jobs lost had not returned. This is in spite of an increase in population of 10 million people over that time. By 2012 the unemployment rate was still above 8 percent. The average annual growth rate of the economy since 2008 has been less than 2 percent. The unemployment rate today is down to around 5 percent, but huge numbers of people have just stopped looking for work and aren’t counted in the official statistics. 64 percent of people over the age of 16 in this country are not working. Large numbers of people have part time jobs when they would prefer to work full time. Many others are employed at far lower levels than their skills would allow.

So what happened? What has changed in the world today that prevents robust economic growth? That’s what this book is about.

We will begin by taking an in depth look at how the economy works and how businesses grow. We will discuss what the benefits of that growth are to everyone and we will look at the infrastructure and system of laws that must be in place for businesses to be successful. Then we will look more closely at all of the things that are happening today that are putting the brakes on business success and economic growth.

People need to understand what makes the economy work efficiently and how we – often unknowingly – do things to slow it down. If we don’t understand how it works we’re more likely to be in favor of policies that will cause it to slow down. If more people understood these things, maybe they would think twice before promoting policies that are preventing economic growth and hurting everyone in society because of it.

Chapter 1 - How the Economy Works

Take a look around your home. Nearly everything you see (except the other people) was created by a business. The chair you’re sitting on and the computer you are reading from were made by businesses. All the furniture, appliances and electronics were manufactured by businesses. All the food in your refrigerator and in your pantry was grown by farmer businessmen, and probably processed by other businesses. All the clothes in your closet were sewn by businesses (unless you made them yourself – in which case the fabric and thread was made by a business. The heating and air conditioning systems, the plumbing and electrical systems – all created by businesses. The paint on the walls, the carpet on the floor, and of course the house itself was built by the employees of various businesses.

Look at your car. It was assembled by the business that bears its name. But there are thousands of individual components and subassemblies inside that car. Each was manufactured by a different business. And those businesses all got their raw materials like steel, plastic and rubber from other businesses.

Now think about what it took to manufacture all those things in your house. Every one of those thousands of businesses that created the things you use every day had to have equipment to manufacture things. This equipment is typically large, complex and highly specialized for the individual business. Other businesses assembled that equipment from components they purchased from still other businesses.

And how did all this stuff get to you? It was shipped by trucks, trains and ships from all over the world. Who manufactured those things? Businesses.

Think about the services you use. Who cuts your hair, washes your car, and gives you a pedicure? Unless you do these things yourself, there are businesses that provide those services to you.

What do all these businesses need in order to provide products to you? What allows them to create these things and sell them to you? And what gets in the way of their success? What slows them down or makes their costs increase? Those are the questions that this book will answer.

Free market capitalism is mankind’s greatest invention ever. That’s right, greater than fire, greater than the wheel, even greater than the fork. It has lifted more people out of poverty and allowed them to find fulfilling and challenging lives than any other system ever invented. It has allowed ordinary people to have more things and services than the richest of kings could have dreamed of even 200 years ago. It has prevented countless wars because countries who effectively trade with each other rarely confront each other on battlefields. There is too much to lose and too little to gain with war.

If we want to fight poverty there are many things that we can do. Today private charities and government both work to help the poor in our nation. We can argue about the effectiveness of government programs, but it is clear that some of these are necessary. But all of these programs together aren’t even a drop in the bucket of anti-poverty results compared to free-market capitalism. Capitalism has brought billions of people out of poverty over the last century.

And it continues to do so today – around the world. The problem is that we can and do measure how many people receive food stamps, or disability payments or other forms of government assistance. But no one accurately measures how many more poor people there would be if we abolished our free market system. No one really considers the number of poor people who will never be able to lift themselves up because of over-regulation, excessive taxation and crony capitalism. We can choose to tweak existing government assistance programs and maybe help hundreds or thousands of people. Or we can work to get the roadblocks out of the way of our free market system and help many millions of people.

A growing economy allows people to find or create interesting lives for themselves. It provides opportunities and jobs for people