The American Way: How We Conduct Economic Recovery in Crisis

Introduction

  The United States has faced difficulties of all types during our 244 year existence.  However, the COVID-19 epidemic may prove to be the most comprehensive financial and social crisis in American history since World War II.  As we continue to plan Ohio’s recovery strategy, we must remember that the United States successfully responded to the economic challenges of World War II by adhering to unique American values.  Specifically, our commitment to personal freedom and a competitive market economy drove the business practices that created the global security our nation enjoys today.  As Ohio continues our COVID-19 economic recovery, we must remember that our beliefs in individualism and limited government control of markets remain fundamental principles of our strategic planning. 

Free Enterprise

  America’s incredible industrial power was arguably the deciding factor in the Allied World War II victory.  Before the war, the Roosevelt administration wisely chose to allow America’s market driven system to produce the extraordinary expansion required to support the global conflict.  Instead of government control of US industries, Roosevelt recognized that a free market approach was the best way to generate the wealth and innovative solutions so valuable in crisis situations; especially those with uncertain end dates and economic requirements.  The result was a 96 percent increase in American industrial productivity by the end of World War II, and the industrial juggernaut that exists to this day.[1]

  Unfortunately, Ohio’s initial COVID-19 response included broad, government-directed business closures and protocols that restricted commerce with added unintentional pressure on our small businesses.  As our state government responds to impending joblessness, bankruptcy, and tax loss issues, we must remember to allow our economy to operate as normally as possible and let market incentives prevail.  Crises generally create unplanned costs, and a fully functioning economy provides much more opportunity for Ohio to sustain our tax base and minimize additional unemployment and other state social welfare requirements.  Ohio’s economy is a complex, dynamic collaboration between large and small businesses.  Governmental control will simply never provide efficient oversight.       

The Power of Individuals

  America’s World War II businesses also generated unprecedented advancements in technology, manufacturing capacity, and logistical capabilities.  Individual creativity and ingenuity were highly rewarded and spurred innovations that transformed our society:  atomic power, jet engines, synthetic materials, radar, and rocket propulsion remain part of our daily lives. Rewards for initiative and flexibility generated ingenious crisis solutions.  Vacuum cleaner companies made gas mask canisters.  Refrigerator manufactures made aircraft parts. More importantly, the enormous labor requirements drove employment and skills training opportunities that redefined America’s workforce.  Women and minorities surged into industrial jobs while massive population relocations created community growth and good paying job opportunities across the state. Long term financial rewards became available for those who were willing to take them.  Ohio’s diverse, well-trained workforce endured long after World War II and remains a powerful wealth generator for our communities today.     

  Again, Ohio’s future response to COVID-19 must rely on individual incentives and personal responsibility as foundational recovery policy concepts.  The broad governmental controls necessary in the initial emergency stages of the crisis must give way to local community control and individual accountability to combat the virus.  This decentralized approach will develop effective COVID-19 preventive practices that are tailored to unique risk situations.  Small businesses are inventing unique COVID-19 prevention tactics every day.  Distilleries are manufacturing hand sanitizer!  The self-interest incentive to limit COVID-19 spread will help small businesses quickly return to safe operations, create winning prevention strategies, and drive the job creation so critical for rapid economic recovery.   

 Summary

  America’s belief in free markets and free people has generated more public wealth and liberty than any nation on earth.  Instead of discussing a “new normal”, Ohio’s policy should focus on a “return to normal” as quickly and safely as possible.  The American way of doing business provides great strength and will be the prime mover in the engine that propels us through the COVID-19 era, just as it did in World War II.

Sources

Goodwin, Doris. “The Way We Won:  Economic Breakthrough During World War II” American Prospect, www.prospect.org/health/way-won-America-s-economic-breakthrough-world-war-ii/

Herman, Arthur. “Freedom’s Forge”, Random House 2012.