In 2008, there is a looming global economic crisis that arose due to several factors: high oil prices, high food prices and a global inflation, which, worse comes to worst, may possibly result in a global rescission. The prices of basic commodities have so risen that it has caused a genuine macroeconomic problem and economic damage. Even large commercial banks are undergoing substantial credit crisis leading to bankruptcy. Nations around the world are suffering from this economic downturn. This is very bad news for Americans.
With the impending financial crisis, large companies like Nike and Microsoft might be compelled to outsource jobs abroad. These corporations will start pulling out their companies. As a result, many Americans will lose their jobs. According to the International Labour Organization, at least 20 million jobs will be lost by the end of 2009 due to this financial crisis, thus bringing world unemployment above 200 million for the first time. Unemployment rates will soar through the roof, and we, as a nation, will suffer.
With the advent of the present financial crisis, Americans must turn to the old ways – start a small business. The present time calls for Americans to start their own businesses. It’s about time Americans should take control of the U. S. economy. Thus, Americans should establish and build this precept by starting from the basics: set up small businesses. Take for instance, Joe the Plumber. People first saw Joe when he asked presidential candidate Barack Obama a question regarding his tax plan. Joe was not intent on buying a business, nor does he intend to work for another for the rest of his life.
Rather, Joe wants to start his own business. Concededly, Joe represents what most American aspires; to own a business. Like Joe, many Americans want to be financially successful. Congruently, Americans also want a stable economy for their businesses to lean on. And who can rescue this flailing economy? The entrepreneurs can. According to Carl Schramm, president and chief executive officer of the Kauffman Foundation, Americans believe that the “health of the economy depends on the success of the entrepreneurs.
Furthermore, the Americans also understand that these entrepreneurs can uplift the employment conditions because they can provide jobs. Mr. Schramm adds, “History has repeatedly demonstrated that new companies and entrepreneurship are the way to bolster a flagging economy. ” Conventional economics hold that the size of the economic pie is fixed. This is not true. To illustrate, Mr. A bought 20 apples, which if sold would result in a $20-profit. However, instead of selling the apples, Mr. A converted these apples and made juices instead, and sold it resulting in a profit of $50.
In turn, those who bought the juices may sell it to another and realize profit. Essentially, by converting the apples into juices, Mr. A has expanded the size of the economic pie for everyone. Successful entrepreneurs carry this ability. They are able to expand the size of the economic pie for everybody. Take for instance, Bill Gates. In the 1980s, IBM engaged Bill Gates to produce an operating system for its computers. Gates, in turn, procured the operating system from another. By producing this operating system, Gates expanded everyone’s ability to generate profit.
Basically, Gates turned these “apples” into “juices” thereby enjoying a profit of $50, instead of $20. He has successfully expanded the size of the economic pie for everyone. So, what if there are several Bill Gates out there who have the ability to expand the size of the economic pie, would it help uplift this flailing economy? Clearly, economic development depends upon the nation’s entrepreneurial spirit. The success of the U. S. economy relies upon the skill and fortitude of American entrepreneurs. Entrepreneurship is the key to U. S economy salvation.
Americans must rely on their own strength to pull the U. S. economy. They can never fully depend on big companies. These big institutions are not as formidable as one would think. Evidently, the 2008 economic situation has hit them hard that some financial institutions suffered bankruptcies. The solution: starting small businesses. It is through these small businesses that the nation could pull through this crisis with ease. With entrepreneurship, Americans can have a full grasp and control of their economy and take advantage of the resources within their reach.