Private Sector Stimulus: Government Alone Should Not Be The Solution

The top story of the year is the US Government’s plans to stimulate the economy. We are about to face close to a trillion dollar price tag to prime the money pump and to see if the economy can begin recovery. I will not hide that I support President Obama’s plan and I do believe the government has a key role in the recovery process. The Stimulus Package needs to pass or we will have issues dealing with many unknowns. But why is the private sector sitting on the side lines? Who is holding the resources in the private sector that might assist boost the economy independent of the government?

Last year’s election was about changing how our country operates, how we see ourselves and our role in the processes that move our culture forward. A large part of Obama’s success stemmed from grassroots marketing and activism within his base of supporters (which happen to be a huge number of US citizens). Why can’t we do this again–but form consortiums within industries to tackle this social issue head on?

I believe the private sector has a role in our economic recovery. While we do need the stimulus bill to pass, companies and small businesses need to take a different approach to adapting to economic issues. The lack of consumption of goods and services (that create jobs) is due in part to the common citizen being reticent to spend money because they are concerned about losing their job or finding a new job. This vicious cycle stems from corporate downsizing, which leads to fewer customers being able to buy their products. The more layoffs, the more customers you lose.

I propose that the private sector cooperate with others to create their own investment in the future. Create jobs by hedging bets on recovery and new opportunities in the vacuum left by companies who are hunkering down and not investing in new business. What if private enterprises decided to cooperate and tackle the fossil fuel issue solo or dive in to selflessly assist the government? They might create a new automotive industry either building cars or producing technology that can be sold to aggressive manufactures seeking to take a whack at Toyota and GM while they are pulling back.

Better yet, why not open the lines to enable broadband access nation wide? That might be costly, but over the long haul–that just opened up a whole new customer base in which to sell products enable infinite channels of business.

Why not fill the gap on food production and distribution in foreign markets? We have a food crisis, but that creates an opportunity to spawn a whole new industry that solves food affordability and creates new jobs. Profit and common good co-existing.

The ideas are endless. But if the private sector continues to perpetuate shrinking of its own customer base by cutting jobs and focusing on core products only, this the recession will last longer than we all wish it to. Sure, we might need to operate at loses, but consider it a path to ROI if you make the right investments. Imagine if the we were able to spare as little as 50% of the jobs lost to date. There were be much more confidence in our economy.

Consider this in closing: The re-staffing cost alone is going to cost the private sector billions once everyone pulls their heads out of …you know what and resumes business of innovating and building great things.

~DK