THIEL’s Gornik Takes on the President, Stimulus Package

Kathy Gornik is a successful woman in a male dominated industry and not once during her many years as a small business owner has she backed down from a challenge.

The latest obstacle in the way of the president of THIEL Audio is much bigger than the stereotypes and clichés she's overcome in the past.

Gornik, an outspoken advocate of small government and free trade, is taking on her most powerful opponent: the president of the United States and his allies in Congress.

President Obama garnered the first major victory of his presidency when Congress approved his American Recovery and Reinvestment Act legislation in February.

Since the approval of the stimulus package, Gornik has watched the Democratic Party, led by the president, attack many of her small government ideologies, which includes free trade.

In assessing the impact of the $789 billion package, Gornik says that the American Reinvestment and Recovery Act could inflict long-term harm to the U.S. economy.

Free Trade Will Fuel the Economic Recovery

Despite the fervor emanating from Pennsylvania Avenue and Capitol Hill for the stimulus package, a candid Gornik disagrees with how taxpayer money is being used.

She says that, in spite of the protectionism that is gripping Washington, free trade is the best course of action for the country if it wants to climb out of its current economic hole.

"The newly minted Stimulus Package, with its 'buy American' provision, is laughable if it weren't so dangerous to the well being of the electronics industry and the economy as a whole," she says.

"Implicit in the wording is that, somehow, if we keep jobs at home, everything will be better. Nothing could be further from the truth."

In her opinion, which she says have been formed after 30 years of entrepreneurial business practices here in the U.S. and abroad, free market capitalism is one of the greatest concepts introduced to mankind.

"My position is that free trade benefits everyone, and the freer it is, the more the benefit, whether you're a consumer, an employee, an entrepreneur, or a CEO of a huge corporation. Trade is the engine of human progress," she asserts.

To underscore her point, she recommends a look at the Index of Economic Freedom.

"Is it any wonder that those ranked the most economically free such as Hong Kong and Singapore have the highest per capita GDPs [gross domestic product] and that Cuba and Zimbabwe have the lowest?" she asks.

Government is Not the Answer

Gornik says that when government gets involved in trade by regulating, it actually hinders the natural relations between groups of people.

"Free trade is what ordinary people do when no one gets in their way. It is by and large indifferent to race, color, creed, gender, class, age, sexual orientation or any of the other human characteristics that tend to divide us and which usually form the basis for war or violence.

"So, trade is not a cultural or nationality-based phenomenon, trade is a human phenomenon," she explains.

"Governments are the sole source of 'un-free' trade through imposed tariffs, regulations, and other protectionist devices such as we are finding in the Stimulus Package.

"It is coercive by nature, harms consumers by causing increases in prices, and reduces incentives for entrepreneurial innovation and investment. Politicians prey on the fears of citizens who do not understand how markets work and get elected on the basis of 'protecting jobs' or 'protecting industries.'

"This is total poppycock, and the harm they cause is incalculable."

President to President Advice

With the stock market plummeting and the unemployment soaring, Gornik says the Democratic Party's desire to implement stricter trade regulations could harm the country's ability to spur on the economy.

"Regarding America's free trade policies, they are tending toward protectionism as seen in the 'Buy American' provision of the stimulus package. This is the absolute worst thing the government could do," she warns.

"International trade does not cost us jobs; it rather creates jobs as new markets open up and new innovations are developed. It is true there is quite a churn out there, and job displacement can be hard on various groups at various times. But this is an inevitable part of progress."

Speaking from her real-world experience in the business community, Gornik recommends a much simpler course of action for the president and congress to take.

"My advice to President Obama and Congress to get our economy going again is to attempt as little as possible. The reality is there is very little they can do," she says bluntly.

"Within the confines of how economies work, however, the government can enact policies that foster the growth of those sectors of the economy that are the most productive: The eco-system of wealth and job creation comprised of entrepreneurs, investors, venture capitalists, and corporations.

"Creating tax policies that incentivize these engines of prosperity will do more for our current malaise than attempting to run a 'czar' economy, as those at the top of government are want to do."