THE FIRST STREET JOURNAL.

When we first moved to Jim Thorpe, Pennsylvania, nine years and eleven months ago, there was a small restaurant on the top of Mansion House Hill called the Switchback. It was named after the old Switchback Gravity Railroad which used to bring coal down from Mt Pisgah to what was then Mauch Chunk, to be loaded on barges and shipped down the Lehigh River.

The Switchback was a decent enough restaurant, an old fashioned burger joint rather than a fast food place, but nothing fancy. The food was good, but, unfortunately, the location was bad. It really wasn’t accessible by foot; you had to drive there, and most of the Jim Thorpe tourist trade is a walking trade. We ate there a few times, but “few” is the operative word; the Switchback was going out of business several years ago.

Some new owners bought it, and put a little bit of money into it, and renamed it the Mt Side. I guess that stood for Mountain Side, but the sign just wasn’t big enough to accommodate the longer name. And that sign, across US 209 from the restaurant itself, on the steep hill leading down to the river, collapsed a couple of years ago. We never ate at the Mt Side, and it has been closed for a couple of years.

Lately, I have seen a trailer in the parking lot — I pass it every day on the way to work — with the logo “The Bagel Bunch” on the side, and now there’s a portable sign announcing that The Bagel Bunch will be opening soon. Clearly, someone has taken the economic decision to buy or lease the property, and put some money into what I must assume he hopes will be a decent little business.

Once it has opened, I will be faced with an economic decision as well. My normal routine is to stop in the Turkey Hill and pick up a copy of The Philadelphia Inquirer on my way to work. Once there, I am faced with a decision: to I also get a cup of coffee there, and proceed straight to work, or do I just get the paper, and then stop at the Dunkin’ Donuts (Dunkin’ Brands: DNKN) in Lehighton, where I will get a medium coffee, cream only, and a sesame bagel, dark toasted, with butter. (I’ve been in there enough that they don’t even have to ask; a couple of the girls will sometimes simply grab the bagel and get it going even before I order.)

Now, I should be a loyal customer to that Dunkin’ Donuts: they treat me well, and they know my order. Unlike the Dunkin’ Donuts in Pottsville,¹ they actually butter my bagel for me. The one in Pottsville toasts the bagel, and then hands the customer a container of butter, and he has to butter it himself; that, to me, constitutes poor service, and I do not patronize them any more. There’s even a group of elderly gentlemen, a group of I assume to be retired men, who are sitting in the Lehighton Dunkin Donuts every morning, having coffee and socializing . . . at 5:45 in the morning! Finally, the Lehighton Dunkin’ Donuts has a couple of cute girls working the end of night shift/ beginning of morning shift, and, heterosexist pig that I am, that’s a plus. too.

The biggest problem? The Lehighton Dunkin’ Donuts is on the wrong side of the road! I have to turn left to get into their too-small parking lot, and then I have to turn left again to get out. Since the traffic light at the intersection of US 209 and Route 443 is just fifty or so yards away, sometimes traffic is backed up and I have to wait to get out.²

The new Bagel Bunch? It will be on the right side of the road as I am driving to work, and it has a larger and easier in which to maneuver parking lot.³ Putting myself in the place of the people who decided to invest in it, I assume that they very much considered the ease of access and egress from the facility, compared to the Lehighton Dunkin’ Donuts. The obvious customer is the person leaving Jim Thorpe (and perhaps Nesquehoning) and heading for work in Lehighton or down in the Lehigh Valley. People living in Lehighton will rarely go there, because it’s between Jim Thorpe and Lehighton.

So, once it opens, I will be deciding, at least initially, whether I’m getting a bagel on the way to work in the morning, and if I opt for the bagel, I will try the new Bagel Bunch. I will try it because it will be much more convenient for me, assuming, of course, that they are open by the time I head for work.⁴ If the bagels and the service are reasonably close to that at Dunkin’ Donuts, then they’ll wind up getting my business.

Notice: I didn’t say anything about the price. I assume that they will be competitively priced, but I would be patronizing them for the convenience factor. I specify that, because I will be taking a decision on which business to patronize for reasons which have nothing to do with economics, but it is a decision with economic repercussions anyway. I’m just one man, and I’ll be buying perhaps three bagels a week there. But while I’m just one man, the owners of the new Bagel Bunch have to be thinking along the lines of getting most of the business of people like me, who drive out of Jim Thorpe toward the Lehigh Valley to go to work. In the aggregate, the decisions that the potential customers take will determine whether or not the Bagel Bunch succeeds or fails.

This is a long-winded⁵ example of why I have been saying, all along, that the government does not and cannot control the economy. The economy of the United States is a couple hundred million people taking literally billions of economic decisions, every day. The entrepreneurs of the Bagel Bunch may have solid hopes that corporate taxes will be cut or that individual taxes aren’t raised or that the Patient Protection & Affordable Care Act is either repealed or declared unconstitutional, but it will not be the actions of the federal government or President Obama or Governor Tom Corbett (R-PA) which determine whether the Bagel Bunch will succeed or fail; it will be the decisions of the potential customers, influenced by the product and service of the entrepreneurs, which determine that business’ success or lack thereof. The government can help or hurt the bottom line, by setting tax rates which take more or less of total revenue, and determining how much money the potential customers have available to spend, but that’s about it.

And that’s why I have said, repeatedly, that the proper role for government in the economy is to just get out of the way! The government should tax everybody equally, and should try to neither encourage nor discourage any particular sort of legal business enterprise. The government almost always winds up creating economic inequalities, rewarding some and punishing others, but not really making a positive difference in the economy, and succeeding only in driving up deficit spending and the national debt.
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