January 9th, 2014 // 10:00 am @ Oliver DeMille
In our current system, there is little or no incentive for our leaders to do what is right for the next generation — if it in any way conflicts with immediate concerns.
We know debt is bad, but in the short-term it’s easier to keep spending. And we realize that deficits are a problem, but it’s easier to ignore this problem and keep raising the debt ceiling.
This problem is systemic. For example, our business world is too often dominated by “Quarterly Capitalism,” which means that most companies manage their business one quarter at a time. The cause of this is the way our tax system is structured, with the government forcing this quarterly approach on business.
Likewise, nearly all politicians are required to adopt what Al Gore called “Quarterly Democracy.” Specifically, everyone raising money for political campaigns must report quarterly on how much they’ve raised, and this drives future fundraising and influences media support and opposition of each candidate.
As a result of these quarterly laws enforced by Washington, our business and political leaders are legally required to focus on the short term.
This is a serious problem. It impacts our national finances in a very damaging way. Anytime anyone — from either party or no party — suggests real solutions to current financial challenges, from budgets and debts to deficits and entitlements and debt ceilings and credit ratings, it is quickly ignored or rejected because real solutions can’t be implemented in 90 days or less.
This is a fundamental structural weakness of our current system of governance. Even when party or government leaders agree with a proposed solution, they can’t fit it in to the 3-month cycle and therefore it is always put on the back burner while they focus on immediate issues.
The framers incentivized the masses to think in annual election cycles, the House in two-year cycles, the Executive in four-year cycles, and the Senate in six-year cycles. These concentric cycles encouraged short-, intermediate-, and long-term thinking all at once.
Today, in contrast, pretty much all of our elected officials and business leaders tend to think in 90-day cycles, and the people have been sucked in to this pattern.
In fact, the masses of citizens, who are mostly now required by law to follow the monthly, bi-monthly, or even weekly pattern of paying taxes and bills with every paycheck (instead of annually when all revenues and expenditures are totaled for their businesses or farms), are widely caught in a paycheck-to-paycheck cycle. Indeed, they think monthly, while their leaders think quarterly.
The one group that was supposed to provide truly long-term thinking, the Supreme Court, has frequently done so on social issues but for the last few decades has failed to do so in financial matters. There are few indications that this will change any time soon.
This all benefits the wealthy elite, who do apply a long-term approach and thereby easily rule the rest of society that is caught in a “rat race” of short-term activity and confusion. Faulkner appropriately called it a “sound and fury.”
Hardly any American leaders today are focused on the next thirty years, taking effective actions that will create lasting national progress. In contrast, many leaders in China and India speak in terms of 50, 100 and even 200 years.
Canadian business leader Claude Hamilton called attention to last summer’s meeting between the presidents of the U.S. and China. In their opening remarks, the Chinese president noted China’s great progress over the past two centuries, and outlined Chinese goals for the decades and century ahead. Then President Obama responded by outlining the major contributions of his Administration during the past four years.
The contrast is glaring. We don’t really think about the future, at least not in terms of taking real action. If we did look ahead in any serious way, we’d see the absolute necessity of fixing our fiscal, monetary, entitlement, debt and budgetary problems. We are quickly headed for national financial disaster, but we can’t see it because it looks years off instead of weeks.
In short, our system is broken, and nothing will fix it until we once again learn to take a long-term approach. I don’t know how this can happen. The traditional way, which has worked at many times in human history, is to study history and learn its lessons.
But our current thinking is so myopically short term that when most modern people read history it doesn’t even seem relevant — like watching a movie that is interesting but doesn’t have much to do with us in real life.
I don’t know what the solution is to all this, because any real fix will include a long-term change. And today’s leaders and people mostly don’t understand how to do long-term fixes.
Suggest anything that will take five, ten, or twenty years, and many people today simply give you a blank stare. Then they click on the news and focus on stories that will be forgotten in 48 hours.
Through all of human experience, there have been two effective solutions to this problem:
- One is for the people to start reading history and classics and thinking in the long-term.
- The second is for the society to go through a major crash, war, depression or pandemic that forces people to slow down, reassess, and see the big picture.
I hope we still have time to choose the first option.
Oliver DeMille is the New York Times, Wall Street Journal and USA Today bestselling co-author of LeaderShift: A Call for Americans to Finally Stand Up and Lead, the co-founder of the Center for Social Leadership, and a co-creator of TJEd.
Among many other works, he is the author of A Thomas Jefferson Education: Teaching a Generation of Leaders for the 21st Century, The Coming Aristocracy, and FreedomShift: 3 Choices to Reclaim America’s Destiny.
Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.