It is very interesting to see our own Government’s vicious opinion regarding supply-side economics and how it is nothing more than a ploy to make the rich even richer while taking advantage of common Americans in the process. It becomes all too easy to engage in the usual class warfare that is so typical of our politicians in their constant attempt to buy votes. However, we should examine their actions versus their words. Over the last year, we have witnessed our Government intervening in certain company negotiations such as the car companies, because they know that failure will impact too many jobs at both the company itself and every supplier that touches it, and in their opinion this prospect is too costly to withstand. That cost manifests itself in bloated unemployment claims followed by decreased tax revenues, which is an unacceptable outcome. Despite all the objections regarding supply-side economics brought forth from our elected officials, their actions speak quite loudly. If they did not believe in its merits, then job losses would not be a concern. In fact they are now beginning to float the idea that small businesses should get tax breaks and subsidies in order to create jobs, this should say it all regarding the reality of this debate.

The notion of Supply-side economics is really simple and straightforward regardless of how badly one would like to disagree. First of all, in order for common Americans to be prosperous, they must be employed above all else. Secondly, in order to have paying jobs available, there must be viable companies in operation. Thirdly, companies can only exist if there are parties willing to take the risk and invest their money to provide the necessary capital for operations. Fourthly, if money is needed then it must be obtained from those that have it to invest. Last but not least, the most important point to consider is a simple truth, those in our society with investable funds can not be forced to invest, thus it remains their choice and they can only be enticed into action through incentives and favorable policies. A successful program of bringing widespread prosperity to the masses must come into agreement with these points, for there is no other way to accomplish this goal. Perhaps instead of critics having contempt for the wealthy for getting incentives to invest their money maybe they should focus instead on its resulting job creation. Unfortunately, that lesson will be a hard one to accept over the coming months and years in our nation as many people struggle to acknowledge it in light of declining prospects and living standards, yet our politicians will be more than happy to raise their objections in order to fuel more destructive class warfare.

Business is not an altruistic entity that exists solely for the employment of people with total disregard for the risk investors assume. It does not even make it to the planning stages without someone willing to risk their money on the endeavor. In essence, there is an implicit contract established that labor will offer their services and investors will offer their capital and if profits are attained then both parties may continue such pursuit. There are a lot of things that have to be done right in operating a business before it can earn a profit and it is here that the true value is represented. It requires a product to be produced that the public will buy in sufficient quantity to maximize the revenues into the company, and all aspects of that product must be planned and managed. It also requires that the entire operation of the company must be applied efficiently to contain the cost for the revenue that is generated. In short, profit is a number that captures the effectiveness of employing people and resources to produce a product by focusing all aspects of operations into a measurable goal that either justifies its existence or not. Making statements proclaiming that now is not the time for profits is dead wrong because it is always the right time for profits since that is what keeps business sharp and focused hence making it as efficient and competitive as possible.

It is the profit motive that differentiates private industry from the Government, and it is the reason why private industry is so much more productive and efficient. The Government does not care about such things as revenues or costs, making a payroll, or any other component of profitability. They simply do whatever they desire and the cost is just something that is the taxpayer’s problem. They have no appreciation for optimizing all the various functions that must happen to produce a profit. It is easy for our Government to tell business to ignore profits because that is the simple world in which they reside. Selling their distorted judgment to the public is all too easy by simply tagging it with the image of greediness. However, as one can see it entails much more than that, it is both necessary and important in the business community to ensure the competitiveness of their companies around the world. We should have a greater understanding for the essential role that the profit motive serves in our society, for it certainly is not about fat-cats getting rich at the expense of the little guy as the Government would have you believe.