What will “returning to normal” look like for our economy?
BY RON SHULTIS
Every so often there is an event that permanently changes the world and how we view it. For example, few doubt the profound influence of events like the Vietnam protests, Watergate, and 9/11 on the American psyche. Events like these change perceptions and define generations.
While its story is still being written, the COVID-19 pandemic and its economic fallout have that same feel. Could the shutdown and quarantine be the final blow to big box retailers? Could mass layoffs and economic instability permanently change Americans’ spending habits, changing us from debt-fueled mass consumers to Great Depression frugalists focusing on savings? History will soon tell us.
While there is no doubt Tennessee will be changed in some ways, we can’t forget what life was like before COVID-19, and more importantly, what created that life. Prior to this crisis, Tennessee was one of the most prosperous states in the country, with rapid wage growth, historic unemployment, increasing profits for small businesses, improving education outcomes, and billions in new business investment. And people across the nation knew it too, voting with their feet by moving here making Tennessee—especially Nashville—a net-migration destination.
What caused this prosperity? While the reasons are many, years of strong fiscal conservatism and free market policies certainly helped pave the way. Policies like no state income tax, right to work status, tort reform, and a general deregulatory approach made Tennessee the envy of many.
Recently, there have been calls for the Governor and the General Assembly to allow local governments to make it harder for businesses to operate and deprive people of their property rights—supposedly all in the name of responding to COVID-19. Some of these recent proposals include allowing cities to say builders and developers must sell real estate at a loss or allowing cities to mandate who a business hires or how much their pay employees in order to bid for a contract. Ideas like these don’t “ease restrictions” but, in fact, place more of a burden on businesses as they seek to hire and rebound from the pandemic.
Just like Obi-Wan, as our state fights this pandemic, a potential economic collapse, and seeks a “return to normalcy,” doubling down on free markets isn’t just our best hope. It’s our only hope. Policy changes like making it easier to start a business, removing old and unnecessary regulations that stunt technological innovation, and reducing or eliminating corporate welfare to create a tax code that works for all businesses are more important than ever. Now is not the time to forget who brought Tennessee to the dance.