A writer I generally respect (George Gilder) wrote a Wall Street Journal article on getting the economy started again. He got the fundamentals right. You need an abundance of new business start-ups. New businesses become big businesses. A simple observation that many can not make.
The writer goes wrong when he makes policy recommendation for getting new business started. He is a writer after all. I have helped more start-ups in every field get started, than any person living or dead.
Gilder focuses on the lack of loan funds in banking. Absurd. Banks don’t lend to small businesses and never have. They only lend on 180% collateral.
I’ve never seen a business person starting who lacked funds. Friends and family know who can start a business and they are 100% the source of start-up funds plus starvation and other forms of simple living deprivation.
If funding isn’t important, what is?
People only start a business in an environment with two qualities: (1) a network of friends who are optimistic about life. The hippies were wildly optimistic about the world they were creating and they created more new businesses than any group in history. (2) there must also be a milieu of cooperation. Business survival depends on friends, community and support from everyone around.
So how do we create an optimistic environment with people who have a desire to help each other?
The answer to that question is the answer to business and economic growth.