We live in a country with a highly regulated but still mostly free economic system.  We have many laws, rules, regulations, licenses, and taxes to comply with in order to run even a moderately sized business with 10 or more employees.  It can seem very overwhelming but millions of people manage to make it through the regulatory maze each and every year and help to provide the jobs people need to work and take care of their families.  Each and every one of these businesses will engage in hundreds of transactions each year and will be better for it.

With this chaotic arrangement the United States has the most dynamic and successful economy in the history of the earth.  Why does this system work so well?  Because of three basic things: 1- Creativity for bringing things to the marketplace, 2- Freedom to start a new business, and 3- Honest self interest.

The United States is the world leader in creativity for scientific innovations.  We have more useful new inventions here than in any other country in the world.  Many of our best inventions are manufactured in other countries but they were first invented here.

Freedom to work and begin a business.  For many people this is the American dream in the land of opportunity.  We have a very stable country from decade to decade with peace and tranquility in our borders that allows businesses to start, grow, and flourish.  You can start a restaurant, clothes merchandising, a tire store, a used car lot, computer store, or any other business where your combination of skill and interest lies.  The market is still allowing for new entrants and new ideas to flourish in the United States.

Honest self interest is an indispensible part of how our free market system works and is of the last several years causing serious problems because of a lack of honesty.  We have had some scandals because of greed outweighing honesty.  Here are a few examples.

In real estate for several years appraisers were under tremendous pressure to inflate appraisal numbers to qualify for bigger and bigger loans.  Only when people began to default on the loans and the mortgage companies were unable to recover market value equal to the loan value did the problem become evident.  Mortgage loan officers have been using stated income loans as a tool to get approvals for several years for people with difficult to show income which is an acceptable practice when they are honestly stating the income of the borrower.  Too many loans were pushed through with inflated income figures on the word of dishonest loan officers.  There were even some loan officers who “helped” people with 0% interest loans through Habitat for Humanity where it was clearly against the home owner’s interest to change the loan.

The dishonesty has to stop.  The free market system is in part based on the general goodness of people acting in their self interest.  Honest dealings with creditors, debtors, business owners, shopkeepers, as customers, and in any other part of the economic system will do more to promote business and grow the economy than almost anything else.  We need a return to honesty in all areas of the free market.

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