Is it still possible to build a business today like my mom and dad did in 1927? I certainly believe it is. I think the answer lies in choosing the right path for your business, and hopefully, the government will choose the right path for the economy. If you’ll indulge me, I came across a road map that may take us there.
Next spring in Dallas, Texas, President George W. Bush (#43) will dedicate his presidential library – named the George W. Bush Institute.
President Bush has stated that one of the roles of the policy center is to promote economic growth at home and freedom abroad. Recently, the Center asked a group of Nobel Prize winners and renowned economists to establish a blueprint for restoring America’s economic growth to an average of 4% of GDP for the next several years.
The contributors all believe that this is an achievable goal, and they suggest several ways that this could take place. The group does agree that even with current growth at 2%, 4% is a stretch but very doable. Former U.S. Treasury official David Malpass writes, “Based upon the ageless American principle of sound money, low tax rates, limited federal government, the market-based allocation of capital and labor, and sensible regulatory and trade rules, a consistent 4% growth is achievable.”
The authors conclude that the objective of economic policy is to allow hard-working individuals, no matter their status at birth, to take advantage of opportunity and achieve a good life. As Brendan Mintner of the Bush Institute writes in Chapter One, “There is a certain virtue to prosperity. It inspires people, removes pressures that lead to embitterment and division, and allows all of us to step back and get a healthy perspective for what is important in life.”
One of the major themes of the 4% solution is growth, growth, growth and more growth! In Chapter One, Mintner writes, “A growing economy produces jobs that allow workers to provide for their families, live comfortable stable lives and give back to their communities.” As they discuss growth, W. Michael Cox and Richard Alon state, “We spend our lives making choices based on the costs & benefits of what we do. Incentives rule our behavior, and economic growth grows through incentives. Free markets encourage workers, companies and investors to undertake productive activities. Growth picks up when people choose to get an education in a field the economy values highly, when they choose to work full time and become more productive, when they choose to save, invest and take business risks, when they choose to start a company and hire workers, when they choose to innovate and create new products; and when they choose to seize the business opportunities around them.”
I personally know this to be true as I have witnessed it firsthand. I certainly wasn’t around in 1927 when my dad opened his nine-stool root beer stand. I was not there when he worked for six years to get through college – the first in his family to do so. But, I was there as he built the root beer stand into a successful restaurant chain, and I was there when he opened his first hotel in 1957. Dad and mom opened their root beer stand with six employees. Today, Marriott and our franchisees employ over 325,000 people in 74 countries around the world. I get a lot of wonderful letters from our associates expressing appreciation for the opportunities and wonderful lives our company has given them.
Is it still possible to do this today? Steve Jobs at Apple certainly believed and did it.
But the book often expresses great concern about the power of the federal government to limit our growth. Writer Kevin Haslett argues about the great importance of lowering the debt level and states that cutting spending is a more effective way to lower government debt levels than increasing taxes. When government stops spending recklessly, consumers and investors are willing to spend more because they no long expect that high government spending will lead to higher taxes down the road. It will reduce GDP growth in the short term but increase economic growth in the long term.
I think we all need to recognize the proper role of government in helping us reach the 4% goal and help small businesspeople like my mom and dad continue to build successful businesses in the future.
In closing, let me list five takeaways as to how to reach the growth target of 4% of GDP:
- Lower taxes on individuals and corporations.
- Reduce government spending.
- Reduce economic policy uncertainty. If business cannot reasonably predict future policy, they may hold off making large investments and consumers may hold off making large purchases.
- Execute more free trade agreements so we can see more American products around the world.
- Provide for a sound and stable dollar so people will invest with confidence in the good old USA.
We have a lot to do, but with the proper government policies, my parents’ dream of creating and building a business can continue to repeat over and over and over again.
I’m Bill Marriott and thanks for helping me keep Marriott on the move.