Our Lemonade Stand Economy?

What Governor O'Malley and President Obama can learn from child entrepreneurs

February 9, 2012 | by Brian H. Murphy

Maryland is often called America in Miniature, referring to our state’s variations in topography. Sadly, the nickname also applies to our chief executives and their failed policies. As goes Maryland, so goes our nation.

Our governor and our president reject free market solutions at every turn, and we have the record unemployment and public dependence to prove it. Since 2008, national dependence on food stamps has increased by 46%, and Maryland spending on state assistance has increased by 56%. Over the same period, Maryland spending on transportation and public safety decreased by 11% and 1%, respectively.

I mention these facts not to disparage those on public assistance, but to shed light on a failed ideology.  America is the land of the individual, and growing dependence is a sign of government failure. Even my friends on the left concede that a life spent on public assistance does not represent the American dream.

The policies pursued by Messrs. Obama and O’Malley leave clear-thinking executives from both parties scratching our heads. In fact, our president and governor are so lacking in private sector experience, some muse the two gentlemen have never even run a lemonade stand.

But that is precisely the problem: all our governor and our president have ever known are lemonade stands. And they are attempting to create jobs by turning Maryland and the United States into lemonade stand economies.

A job is nothing more than an agreement between two free people, in which one provides a good or a service, and the other provides compensation. The number of jobs is limitless, but a government can no more create a job than a referee can score a touchdown.

Lemonade stands are often held up as a symbol for American entrepreneurship. But as a proxy for business, lemonade stands teach the economics of dependency. When starting a lemonade stand, children typically approach their parents to obtain the necessary commercial space, signage, glasses, pitchers, tables, and ingredients. All revenues are counted as pure profits, and no account is taken for such unpleasant realities as zoning, permits, working capital, taxes, or unemployment insurance. Even patronage is a function of philanthropy instead of thirst.

Federal lemonade stands include bank bail-outs, auto bail-outs, and crony capitalism such as the now infamous Solyndra case. These lemonade stands have eroded the public trust, have increased our debt, and have done nothing for our shared prosperity. Maryland’s lemonade stands include subsidies for off-shore wind projects, wasteful government contracts, and burdensome environmental regulations which reward failing enterprises, inflate the price of energy and curtail job creation.

On every level of government, lemonade stands are strangling the private sector by increasing uncertainty, public debt and taxes. Our government leaders must change course, and cap public sector growth to that of the private sector. And to promote private sector growth, they must avoid the very regulations which prevent the private sector from developing. An obvious first step is in energy policy.

While affordable, abundant energy is the core of our economy, our president and our governor stand in the way of safe and dependable energy expansion in the form of the Keystone Pipeline and natural gas fracking, respectively.  They fiddle, while the price of energy increases, our economy sputters, and public dependence grows.

Domestic energy expansion would create jobs immediately, it would decrease our current account deficit by lowering imports and increasing exports, and it would have a positive impact on every level of the private sector. Private sector growth means jobs, which would decrease the need for public assistance.

Instead of spending their careers running lemonade stands, perhaps we would be better served with executives who had once had paper routes. Paper routes represent actual contracts with paying customers. The employee is expected to deliver a product, in good condition, to a paying customer. Poor performance carries consequences. And good performance carries rewards.

Although foreign to our president and our governor, the hard work required to operate a business is known by the majority of Americans. Seven out of ten Americans either own or work for a small business. Americans understand the difference between lemonade stands and paper routes. And we would be well served if our executives did as well.

All the American business owner has ever asked for is a fair and level playing field, with predictable rules. The promise of opportunity, not of dependence, has been enough to draw immigrants from all over the world. And these immigrants in turn have created prosperity unprecedented in the history of the world.

Shackling millions of Americans and Marylanders in generational dependence is immoral. Entrepreneurs are ready and waiting to grow our economy. All we ask is for a government which supports the private sector, and which doesn’t continually ask those of us with paper routes to subsidize government lemonade stands.