I’m in Chicago for the weekend for the wedding of one of my roommates from law school.  I couldn’t help but notice the signs of the current economic recession on the cab ride over to the hotel.

  • Condominium tower after condominium tower going up side by side in the Gold coast area. 
  • People going in and out of various stores.  The Gap.  Pottery Barn.  Name the store, and it’s busy.
  • Coffee shops filled with people drinking lattes and taking in a summer afternoon.
  • Popular restaurants where I could not get a decent reservation even FOUR days in advance. 

Are these the signs of an economic recession?  Obviously not.

There Is, Indeed, Growth

According to the definition of a recession, we’re not even close to being in one yet.  The economy grew one percent last quarter.  Not stellar.  But it’s better than regressing.  You need two straight quarters of negative growth to be in a recession.  Thus, we’re not in one, and that’s a good enough reason to be optimistic.

The Real Story

Upon seeing that statistic, I remembered an article my father-in-law e-mailed me just a few days ago.  “Fodder for Flimjo,” he called it.  (He’s an avid reader of this blog.) 

The article is an excerpt from a speech by Pat Toomey, and it’s called The Greatest Story Never Told.

Toomey makes two critical points in the article: (1) we are in the greatest period of prosperity in human history; (2) the reasons for and causes of this great period of prosperity are low taxes and minimal government regulation.

Toomey lists a wealth of statistics that illustrate how prosperous Americans have been.  People have higher net worths today than they ever have.  More families have multiple cars today than they ever have.  More people are investing in stocks.  People live in bigger houses and living spaces than ever before.  Even the “poor” are doing well!

The decrease in taxes, beginning in the 1980s and culminating in 2003, and government regulation has allowed society to prosper to this level of success.

The Catalysts For Prosperity

Toomey doesn’t mention what I believe is the third reason for this period of prosperity.  Low taxes are obviously vital because people have more money, and they invest it.  Decreased regulation is also critical because the less the government gets in the way, the more efficient markets become. 

But these two catalysts combine to stimulate a third force behind this prosperity: Entrepreneurship.

When taxes are low and regulation is minimal, the time is ripe for people with ideas and energy to seize the opportunities that surround us.  That is what has happened over the last 25 years, and it continues to flourish today. 

Entrepreneurs are the major driving force behind economic growth and prosperity.  Governments do not innovate or come up with new products or services.  Individuals do.  When the government allows us to keep more of our money and then gets out of the way, we all have the ability to take our ideas and flourish.

This concept is becoming even more true today.  Companies are outsourcing more jobs.  Businesses are becoming automated.  The notion of having a “job” will be far less mainstream 20 to 30 years from now.  Entrepreneurs, instead, will be driving economic growth and development.

Today, more than ever, is the best time to jump on board. 

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