The Big Crisis is Coming
December 2nd, 2010 // 4:00 am @ Oliver DeMille
Note: If you like this article, you’ll love Oliver’s latest book, FreedomShift: 3 Choices to Reclaim America’s Destiny, which addresses the future of American and what to do about it.
Click Here to Download a PDF of This Article
By 2020, the U.S. will be spending $1 trillion a year just to pay the interest on the national debt. Sometime between now and then the catastrophe will come. It will come with amazing swiftness.” -David Brooks, New York Times Columnist
A big crisis is coming. From the story of the boy who cried, “Wolf!” to the crime of calling “Fire!” in a crowded theater, our society has a pretty low tolerance for alarmists.
They’re irresponsible, sensational, not to be believed.
One sure way to be ejected from the “Inner Ring” is to promote theories of conspiracy, to predict disaster or to in any other way suggest that our Progressivist trajectory is gravely off-course.
But what about when there is a wolf? Well, sure; the idea that there really is a wolf has agitated the fevered minds of crackpots and fringies since–forever.
And their animated efforts to alert the world to the threats that supposedly imperil us, to “wake us up” (regardless of our disinterest or our criticism) is perhaps the best indication that there’s no merit in their warning–or so says popular opinion.
This makes it all the more curious, awkward and, dare we say, disturbing when a chorus of alarms is heard coming from the established intelligentsia, from the acknowledged “experts” and thought leaders–the most credible voices in The Great Conversation.
And this is exactly what is taking place right now.
History is, of course, full of cranks and doomsayers, and the wise learn to talk in moderated tones and look at the evidence with clinical objectivity.
And yet in our time even many of our most objective, credible, detached, understated, methodical and consistently rational thinkers are predicting significant difficulties ahead–often in dramatic and even sensational terms.
Twenty Quotes Every American Should Read Today
For example, consider the following thoughts from some of our most tempered and prudent authorities. I have arranged these in a Top 20 list of great quotes; all 20 are an important commentary on our modern world and the decade ahead.
1. Peggy Noonan, The Wall Street Journal
I think there is an unspoken subtext in our national political culture right now. In fact I think it’s a subtext to our society. I think that a lot of people are carrying around in their heads, unarticulated and even in some cases unnoticed, a sense that the wheels are coming off the trolley and the trolley off the tracks.”
2. William Strauss & Neil Howe, The Fourth Turning
Wherever we’re headed, America is evolving in ways most of us don’t like or understand. Individually focused yet collectively adrift, we wonder if we’re headed toward a waterfall . . . a decisive era of secular upheaval, when the values regime propels the replacement of the old civic order with a new one.”
3. David Brooks, The New York Times
Elections come and go, but the United States is still careening toward bankruptcy. By 2020, the U.S. will be spending $1 trillion a year just to pay the interest on the national debt. Sometime between now and then the catastrophe will come. It will come with amazing swiftness. The bond markets are with you until the second they are against you. When the psychology shifts and the fiscal crisis happens, the shock will be grievous: national humiliation, diminished power in the world, drastic cuts and spreading pain.”
4. Niall Ferguson, Newsweek
This is how empires decline. It begins with a debt explosion.”
5. Roger C. Altman & Richard N. Haas, Foreign Affairs
The U.S. government is incurring debt at a historically unprecedented and ultimately unsustainable rate… As the world’s biggest borrower and the issuer of the world’s reserve currency, the United States will not be allowed to spend ten years leveraging itself to these unprecedented levels. If U.S. leaders do not act to curb this debt addiction, then the global capital markets will do so for them, forcing a sharp and punitive adjustment in fiscal policy. The result will be an age of American austerity. No category of federal spending will be spared, including entitlements and defense. Taxes on individuals and businesses will be raised. Economic growth, both in the United States and around the world, will suffer. There will be profound consequences, not just for Americans’ standard of living but also for U.S. foreign policy and the coming era of international relations.”
6. Joseph S. Nye, Jr., Foreign Affairs
The Congressional Budget Office calculates that total government debt will reach 100 percent of GDP by 2023…”
7. Roger C. Altman & Richard N. Haas, Foreign Affairs
The International Monetary Fund (IMF) staff paper comes closer to the mark by projecting that federal debt could equal total GDP as soon as 2015. These levels approximate the relative indebtedness of Greece and Italy today. Leaving aside the period during and immediately after World War II, the United States has not been so indebted since recordkeeping began, in 1792… State and local governments also owe huge amounts, on the order of $3 trillion.”
8. Don Peck, The Atlantic
The Great Recession may be over, but this era of high joblessness is probably just beginning. Before it ends, it will likely change the life course and character of a generation of young adults… It could cripple marriage as an institution in many communities… Ultimately, it is likely to warp our politics, our culture and the character of our society for years come…The economy now sits in a hole 10 million jobs deep…[and] we need to produce roughly 1.5 million jobs a year–about 125,000 a month–just to keep from sinking deeper. Even if the economy were to immediately begin producing 600,000 jobs a month–more than double the pace of the mid-to-late 1990s, when job growth was strong–it would take roughly two years to dig ourselves out of the hole we’re in… But the U.S. hasn’t seen that pace of sustained employment growth in more than 30 years…”
9. Ken Wilber, A Theory of Everything
We are awaiting the new global founding Fathers and Mothers who will frame an integral system of governance that will call us to our more encompassing future . . .”
10. Andreas Kluth, The Economist
And yet, who would be California’s ‘Founding Fathers’? Thomas Jefferson, absent from Philadelphia as a minister to France, called the 55 delegates chosen by the states ‘demi-gods’. These were men such as James Madison, deeply versed in Aristotle, Cicero, Locke and Montesquieu, who preferred the word ‘republic’ to ‘democracy’ for fear that the latter might evoke the chaos of ancient Athens… But can lay people be expected to assume the responsibilities of a Madison?”
11. Thomas Friedman, The New York Times
We are in a country in debt and in decline–not terminal, not irreversible, but in decline. Our political systems seem incapable of producing long-range answers to big problems or big opportunities.”
12. Larry King, Larry King Live
A recent CNN Opinion Research Poll [asked]: ‘Do you think the federal government has become so large and powerful that it poses a threat to the rights and freedoms of ordinary people?’ Fifty-six percent of Americans said yes.”
13. Joseph S. Nye, Jr., Foreign Affairs
In 2010, a poll by the Pew Research Center found that 61 percent of respondents thought the United States was in decline, and only 19 percent trusted the government to do what is right most of the time. In 1964, by contrast, three-quarters of the American public said they trusted the federal government to do the right thing most of the time.”
14. David Brooks, The New York Times
The essence of America is energy–the vibrancy of the market, the mobility of the people and the disruptive creativity of the entrepreneurs. This vibrancy grew up accidentally, out of a cocktail of religious fervor and material abundance, but it was nurtured by choice. It was nurtured by our founders, who created national capital markets to disrupt the ossifying grip of the agricultural landholders. It was nurtured by 19th-century Republicans to build the railroads and the land-grant colleges to weave free markets across great distances. It was nurtured by Progressives who broke the stultifying grip of the trusts…The task ahead is to save this country from stagnation and fiscal ruin. We know what it will take…The Democratic Party…does not seem to be up to that coming challenge (neither is the Republican Party).”
15. Fareed Zakaria, Newsweek
The world has shifted from anti-Americanism to post-Americanism . . . The distribution of power is shifting, moving away from American dominance.”
16. Philip Bobbitt, The Shield of Achilles
We are entering a period, however, when very small numbers of persons, operating with the enormous power of modern computers, biogenetics, air transport, and even small nuclear weapons, can deal lethal blows to any society. Because the origin of these attacks can be effectively disguised, the fundamental bases of the State will change . . . We are entering a fearful time, a time that will call on all our resources, moral as well as intellectual and material.”
17. Thomas Friedman, The New York Times
I heard a phrase being bandied around here by non-Americans–about the United States–that I can honestly say I’ve never heard before: ‘political instability.’ [This] was a phrase normally reserved for countries like Russia or Iran or Honduras. But now, an American businessman remarked to me, ‘people ask me about political instability in the U.S. We’ve become unpredictable to the world’….We’re making people nervous.”
18. Joe Klein, Time
Many Americans also were confused and frustrated by the constant state of war since the terrorist attacks of 9/11. But for every occasion they raised Afghanistan, they mentioned China 25 times…’The great fear is about American supremacy,’ said Anne Mariucci…’We all believed that if you followed the basic compact, worked hard and played by the rules, that we’d have the highest standard of living in the world. And we were always on the front edge of the next new technology–but we’re not anymore. We seem to be mired in mediocrity while China is steaming ahead.'”
19. Ken Kurson, Esquire
Today’s brutal economy and credit freeze should have most entrepreneurs running for cover, or at last signing up for the 99 weeks of unemployment our Congress has generously provided, courtesy of our kids and grandkids. Instead, many steel-stomached small business people are using this crisis as an opportunity to expand.”
20. Alvin Toffler, The Third Wave
There are powerful reasons for long-rang optimism, even if the transitional years immediately ahead are likely to be stormy and crisis ridden.”
One More Thing: The Rise of China
On the issue of China, Peggy Noonan said in The Wall Street Journal:
People are freshly aware of the real-world implications of a $1.6 trillion deficit, of a $14 trillion debt. It will rob American of its economic power, and eventually even of its ability to defend itself. Militaries cost money. And if other countries own our debt, don’t they in some new way own us? If China holds enough of your paper, does it also own some of your foreign policy? Do we want to find out?”
Also consider these quotes from my book FreedomShift:
Note that China, the second largest economy in the world, has huge savings (unlike the former Soviet Union or the current United States) and is a major buyer of U.S. debt. China has three of the world’s four largest banks, the two largest insurance companies and the second largest stock market. With all this, the Communist Party remains in control; it also remains firmly communistic in philosophy and is, if possible, increasingly totalitarian.”
China has a huge surplus of government and also private savings, and it wants to invest in the United States. Indeed it is our largest creditor now. Other nations may also be persuaded to keep supporting our spending habits. But one has to wonder why our philosophical opponent (communist China) wants to invest so much. Are its motives pure? What if they’re not? Is it a simple profit motive? What if it’s something more?”
And as Thomas Friedman said in the New York Times:
What does it mean when China’s communist business environment is more inviting to U.S. companies, more conducive to their growth, than the United States? When the regulations and taxes in the U.S. make doing business in China attractive? The U.S. now ranks #40 out of forty industrialized nations in appeal to business.”
As noted by Samuel P. Huntington and summarized by Richard K. Betts in Foreign Affairs:
Huntington also presents data showing China as the only major power that has been more violent than Muslim states.”
Columnist for The Atlantic (and 30-year expert living in Asia) James Fallows has argued that America can find ways to work with China so the 21st Century doesn’t become a time of big-power conflict, but few if any experts believe that the U.S. can ultimately keep competing with China unless we make major improvements at home.
It’s Coming
A big crisis is coming, and we need to prepare. I am an optimist, and I am convinced that the best years in America and the world are ahead of us.
I am also an idealist: I believe that we should clarify what we want for the world’s future and get to work creating it–however difficult the task.
As a realist I am convinced that unless certain things change very quickly (and perhaps no matter what we do) we are facing some major challenges ahead. Every generation faces its share of problems and gets to choose whether to be beaten down by them or to turn them into opportunities.
All of this said, my optimism still wins out. Our best is yet to come. And it will almost surely come as we face and overcome the major challenges ahead.
What are these challenges? I have no crystal ball, and my only certainty is that they will surely come–and probably very soon.
Many nations have been at a point with conditions similar to those we now face, and there is a preponderance of historical evidence that certain kinds of problems dominate in such circumstances.
The cycles and patterns of history indicate four major types of challenges for our situation.
Four Possible Catastrophes
Four possible catastrophes are suggested by historical analysis. Of course, any foray into prediction is based on educated guesses, and the one sure bet is that the future will present a number of surprises.
Along with the inevitable shocks that will no doubt disturb all forecasts, one or more of these great challenges is likely to come again soon.
These scenarios are a good indication of what we should expect during the next decade:
1. Major Economic Problems
The Great Recession does not qualify as a major economic collapse, though nearly all the experts are convinced that it came very close to becoming one. An economic depression of considerably greater magnitude may be ahead.
2. Health Pandemic
Modern nations are extremely concerned about this terrifying possibility. It is a telling foreshadow that insurance companies are taking this threat very seriously and preparing accordingly. Historically, the Black Plague was as devastating as any war–more than most; indeed, it reportedly killed a third of the population in many parts of Europe.
3. An Unexpected Major Crisis
Examples might include a major volcanic event, earthquakes, meteors, drastic environmental shifts or other so-called “acts of God.”
Of course, the unexpected can come at any point in the historical cycles, but in times like ours these randomly occurring disasters are especially devastating because coinciding with one or more of the other three challenges is so likely. In the age of WMDs, such catastrophes could be manmade–in all of history, there is no credible example of weapons being created and remaining unused.
4. Major War that Threatens the Homeland
The experts seem to think that few enemies in the world have the potential to challenge America in this way, but even if this is true the reality is that any of the other major crises would most likely be quickly followed by major warfare.
Things can change very quickly, as history has proven. We are at the point in history (following a major boom in the 90s and then 9/11, the longest war in U.S. history and the Great Recession crash) that we are weary of crisis.
We want the challenges to be over, and we are thus particularly vulnerable. It is at such points that the really big problems come–like Pearl Harbor after a roaring twenties boom ended by the stock market crash in 1929 and then twelve long years of crushing depression.
Turning Crisis to Opportunity
We’ve gotten a little soft after several generations of prosperity and entitlement. It’s time for us to cheer up, man up and turn our coming challenges into opportunities.
America’s biggest successes came in times of challenge: the Constitution came out of a time of war and economic downturn, slavery was ended in another era of war and economic depression, and the Greatest Generation stopped Hitler in a period of world war following the Great Depression.
The patterns of history suggest, and the intelligentsia from across the globe concur, that we are headed for another such time period; in fact, we may well be into it already.
The challenges won’t be identical, of course, but they will likely be similar. Realism says our generation will have as many challenges as any other, and optimism says we can turn the coming challenges into remaking America and the world in the best and most important ways.
Whether we succumb to the challenges ahead or turn them into America’s best years depends on the American people.
If we stand back and wait for our leaders to solve our problems, the crises ahead will almost certainly go very badly for America.
If we just pretend everything is fine (or that our leaders will fix everything without our help) until the crisis is fully upon us, we miss valuable preparation time.
If, on the other hand, we resurrect our identity as a nation of grassroots leaders, entrepreneurial thinkers and citizen-statesmen, we will use the coming difficulties to significantly improve the world we pass on to posterity.
Well, Chicken Little–it turns out that the sky is falling. Will we be prepared?
Category : Current Events &Economics &Featured &Foreign Affairs &Government &Leadership
The Reality Behind the 2010 Election: It’s the Economy
October 29th, 2010 // 4:00 am @ Oliver DeMille
The economy is struggling, and it is driving the election. As so many have said since the Clinton campaign made it popular in the 1990s, “It’s the Economy, Stupid!”
And many Americans believe the economy will continue to decline. If it does, the Obama Administration has very few tools to respond.
The White House has based its entire economic policy on an ideological belief in government spending and intervention, but further economic downturn will require it to take serious action.
What can it do that it hasn’t already tried? How much more can it spend? And at what point will it accept that such spending isn’t delivering fixes to unemployment and the economy as promised?
If the government increases spending, promotes more stimulus, raises taxes or increases regulations (or all of the above — which is what it has done so far), it will run into major difficulty.
So far none of these have fixed the economy. The nation now ranks Democratic leaders at their lowest rating ever compared to Republicans (42 percent to 52 percent).
And the major issues fueling dislike of the Obama agenda are unemployment (now 9.6 percent), the healthcare law and other increased government regulation, and massive government spending.
Some economists, like Paul Krugman, say the problem is that the stimulus should have been much bigger in the first place — since now there is very little support for more government spending.
The White House seems to agree, and it is preparing to raise taxes on big business. The problem with this strategy is that very few small businesses have a lot of extra cash right now. Big business, in contrast, has a lot more extra cash than the whole of government stimulus.
Unfortunately, with the Obama Administration promising to end tax cuts to big business, these companies are unlikely to hire or spend their cash on hand. And if President Obama does raise taxes on big business, they are likely to simply hold their cash or spend it in other countries.
A lot of corporations are seriously considering moving more of their operations abroad to find more favorable environments for profit. Many have already made this move, taking jobs and money with them.
Some countries are aggressively advertising their low tax rates to lure international investors. For example, a full-page ad in The Economist reads:
“Fact: the Gulf’s lowest taxes are in Bahrain. As are the region’s lowest living and operation costs. Which leaves more of the cake for you and your business.”
A lot of nations are using similar campaigns to lure investment, while the U.S. is actively adopting policies which drive capital away.
Why would businesses that can afford to move stay in the U.S. to face more White House attacks and increasing taxes and regulations?
This not only won’t help our economy. It will increase unemployment, make credit harder to obtain for small businesses, and convince consumers to buy less. In short, it will significantly hurt the economy.
The Obama plan claims to help small business, but in fact its proposed policies will do the opposite. One Harvard economist points out that our debt load is now even worse than that of Greece, which has just experienced major economic collapse and is being bailed out by international banks.
Open For Business?
The impact on the elections is obvious. If a lot of Republicans win, they will have more influence to argue for more business-friendly policies. But there is no guarantee they will do so.
After all, the Bush Administration significantly out-spent the Clinton Administration before it. No matter what happens in the election, the Obama team needs to take a different route if they want to reboot the economy.
Two years into Ronald Reagan’s presidency, the economy was struggling and unemployment was above 10 percent. Reagan pushed to cut taxes, reduce government spending, and, perhaps most importantly, sent out the message — over and over — that government needed to be reduced and that private business was the hope of the economy.
In retrospect, spending actually increased under Reagan, but his consistent message of promoting business, support for business growth and free enterprise, and the need to cut government and spending made business feel safe.
He spoke optimistically of business on all levels, and lauded the opportunities provided by free enterprise and free markets.
The result? Businesses hired and entrepreneurs went to work. Commerce soared. Growth quickly soared to 8 percent (the Obama “recovery” was around 1 percent) and unemployment rates came down. The 1980s became an era of economic boom, which grew into the roaring 1990s.
Too often the opposite message is coming from Washington. The White House repeats its “unfriendly to business” message over and over, calling businessmen “fat cats” and telling young people to work for non-profits and not go into business.
It constantly promotes increased government spending and ever-expanded regulations which drastically increase the cost to start and build businesses. It has publicly attacked the Chamber of Commerce, the ultimate small-business advocate, and in general it has sounded angry and dangerous to business.
Now, in the name of “helping small business,” it is increasing taxes on big business and people who succeed in small business — many of those above the $200,000-$250,000 threshold are small entrepreneurs.
And, as I said above, many big businesses which hold a lot of cash are making plans to take it abroad. These realities are a serious problem.
Americans now believe Republicans (49 percent) “would do a better job of dealing with the economy than Democrats (38 percent).” But what exactly is the Republican plan? It is unclear.
Americans seem to believe that at least Republicans will stop increasing taxes and regulations on business, and perhaps be a lot more friendly and welcoming to business.
Whom Do Voters Support?
Perhaps the most significant reality is that Democrats and the Obama Administration now have a 60 percent disapproval rating among independents.
Of course a lot of Republicans support Republican politicians and a lot of Democrats support Democrats. But President Obama was swept into office by independents, and now most of them no longer support his policies.
Independents are mostly for fiscal responsibility, lower taxes and lower levels than the current government intervention in the economy. Indeed, many of them supported Candidate Obama because they disliked the Bush Administration’s high-spending, over-regulating policies.
It seemed to independents that Candidate Obama promised new leadership and a new direction for Washington. Many independents have been shocked and dismayed by the Obama Administration’s move to the left. But they could have supported this surprise if there wasn’t such a lack of new-era leadership.
For example, as an independent, I expected President Obama to be liberal. I closely read The Audacity of Hope (affiliate link) before the election and I was clear that he would govern from the left.
But I also thought he would bring a new brand of leadership — a fresh, charismatic, Generation-X-style emphasis on American growth and vibrancy rather than old-line Washington politics.
Unfortunately for all Americans (left, right and independent), that did not occur.
Many independents feel abandoned by President Obama less for his liberalism than for his return to “Washington politics as usual.” This shift occurred within days of inauguration, and his popularity among independents has consistently fallen ever since.
We live in an era where the key to winning elections is to combine support from your base (liberal or conservative) with the support of independents.
This is true nationally and in most locales as well. For Democrats, who will get the bulk of Democratic votes no matter what, the goal right now should be to bring in independents by pushing through many tax breaks and finding ways to deregulate business requirements.
When asked who they will vote for in the 2010 Congressional election, 62 percent of registered independents said they support Republicans; 30 percent plan to vote Democrats.
This is a huge split in American politics, where voting differences are usually 1-3 percentage points and a 6 percent split is a landslide.
As a result, many current Democratic candidates are frequently using the phrase “I’m independent.” As the election season kicked off right after Labor Day, the Obama Administration changed its message —apparently to attract independent voters.
President Obama said in his speech on September 8th that it is American business which drives the economy, and Timothy Geitner said the same day that American businesses are very innovative and able.
This change is a good move for the administration, but President Obama still managed to include disparaging remarks about privatization and Wall Street.
Despite the fact that there may be truth to what he says, it is the tone of anti-business that reverberates. He may get past this bias in the weeks and months ahead, but will it last after the election?
From an independent perspective, it doesn’t seem like it.
Business really does drive the economy, and we need to genuinely embrace and support this.
Independents are tired of the constant attacking between parties. Instead of Republicans attacking President Obama and the White House attacking Republicans, why can’t either just get serious about enacting policies that actually help small business?
It’s the Economy!
Our leaders must find ways to significantly help business.
Proposed tax cuts for small business, payroll tax holidays, and not taxing research and development are good starts with bipartisan support. The Obama Administration deserves praise for these proposals. But a lot more is needed.
If the government is going to spend money regardless of what the voters want, the current push to spend it on infrastructure is probably the best plan.
Still, spending $50 billion of taxpayer money is quite an expense. And nearly all infrastructure contracts will go to big firms, further excluding and in places even hurting many small businesses.
Unless private business is convinced to rebuild the economy, one business at a time, government spending will just make the problem worse.
Harvard economist Niall Ferguson responded to President Obama’s new plan by pointing out that the $50 billion of infrastructure expenditures will do little or nothing to boost the economy since the plan is built on faulty economic reasoning that is good for politics but bad for the economy.
In contrast, Ferguson argues, we should be studying how Reagan and Thatcher successfully battled and overcame major recession in both the U.S. and Britain in the 1980s. Even experts from left agree that the proposed Obama plan won’t do much to help the economy.
President Obama’s speech included numerous jabs against Republicans, which many independents agree with. But it didn’t include much that could really help the economy.
This has many independents frustrated. It feels too much like more politics, not better leadership.
For example, the proposal to put freezes on non-security spending is a good idea, but it rang hollow, sounding more like a political debating point than something the president really cares about.
If he gave it the same support as health care, and kept pushing it with tenacity and refusals to give up on the idea, many independents would be impressed.
Instead, it seemed to come across like the right thing to say in this election season, but prone to be ignored in favor of big government spending after the election.
If that isn’t true, if the Obama Administration really does follow through on this proposed freeze on the non-essentials, many independents will swing back to supporting President Obama.
But I think that most independents will wait until after the election to see if this happens.
The president’s speech was excellent in many ways, and independents should be glad that he is now saying some of the right things. It felt like the return of Candidate Obama.
But therein is the problem. Is it just campaign rhetoric? The contrast between Obama’s campaign persona and his Head Democrat persona is so dazzling that it’s more challenging than usual to hope that Mr. President will lead out.
And why did he say a lot of the right things about fiscal responsibility but only get passionate when he was criticizing Republicans or talking about increased government spending?
It’s the Economy, Really!
The Democratic narrative seems to be that without the stimulus the recession would have been much worse.
But many independents don’t buy it. They didn’t like many of President Bush’s policies, but they are just as frustrated with the current administration’s strategies.
They believe the stimulus was a flop and healthcare and other massive regulations have seriously hurt the economy. They blame both Obama and Bush for the current economic mess.
But since Bush is out of the discussion, their frustration is pointed at President Obama.
American independents aren’t the only ones who feel that the Obama Administration’s stimulus and massive spending/regulating strategy has worsened the economy.
Some international analysts, for example, say: “[The stimulus] has not worked. The whole thing has failed. And that is why America, of the big economies, is the one that is now teetering on the brink.”
Some say, “I think in Europe it’s very clear the direction the Europeans are going down, which is to basically start bringing public debts and deficits under control. Obama is still worried about the polls….Personally, I think the best thing they could do is probably just sit on their hands in the U.S. …”
If the plan is to spend more, tax more and increase regulations, then I agree — let the politicians sit on their hands and do nothing!
But what if, instead, they cut taxes, deregulated small business, changed the healthcare law to incentivize business investment, and extended an olive branch of friendship and thanks (yes, genuine gratitude) to entrepreneurs and business for their vital contributions to our prosperity?
Doing nothing, as good as it may sound to Tea Partiers and some independents, is not enough. Washington needs to reverse the bad-for-business policies accumulated since 1987 — or at least during the Bush/Obama growth of anti-business policy since 2001.
If this sounds impossible, we may be in for a very long period of economic struggles.
In Conclusion: It’s the Economy!
The future of the economy depends on the willingness of small business to take risks and the willingness of big business to hire, spend and invest.
Until our national leaders are willing to cut government spending, lower taxes, reduce government interventions in almost every sector of business, and show more genuine friendliness to business, our economic problems will continue.
Whatever the results of the 2010 election, Washington has got to make friends with business. We simply must make those who spend their lives in business feel safe and excited about building, hiring, investing, growing and spending. Otherwise, deepening economic troubles are ahead.
We desperately need real leadership in Washington, leadership which will actually incentivize, promote and reboot the economy.
The best-case scenario would be for the Obama Administration to lead out in this direction. After all, they’ll be in the White House for at least the next two years.
This pro-business outline (cut taxes, significantly reduce regulation on business, get government spending under control, and make friends with business) should be the guiding principle to every voter in every election across the nation this year.
We need to pay little or no attention to political party and instead elect leaders who will help kick-start, encourage, and stimulate the economy.
This is a true mandate, and our national future depends on it.
***********************************
Oliver DeMille is the founder of the Center for Social Leadership, and a co-creator of TJEd.
He is the author of A Thomas Jefferson Education: Teaching a Generation of Leaders for the 21st Century, and The Coming Aristocracy: Education & the Future of Freedom.
Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.
Category : Business &Current Events &Economics &Government &Prosperity
O Canada: Lessons From Our Northern Neighbor
October 28th, 2010 // 4:00 am @ Oliver DeMille
Two words that haven’t shown up together very much since the 2008 economic meltdown are “austerity” and “Canada.”
That’s quite an accomplishment for our neighbor to the North. Austerity has been paired with Greece, Portugal, Spain, Great Britain and France in just the past 18 months.
Austerity means having your economy controlled and run by international regulators, and right now the idea of austerity for the United States is growing.
Not only is the federal government in financial trouble, but so are many of the individual states. In addition to struggles in 2008, 2009 and 2010, 31 states project major budgetary shortfalls in 2011.
Prospects are getting worse in many states, rather than improving.
Unemployment numbers are knocking on double digits (which is to say that in some places they already exceed 10 percent), and the U.S. deficit and debt promise to be major issues in the 2010 election — to say nothing of their impact on America’s future for years and perhaps decades to come.
Canada’s Example
But Canada faces a much smaller challenge.
Ironically, for decades U.S. conservatives have pointed to Canada’s health care system as the example of what not to do — often referring to it as a failed icon of “socialized medicine.”
Many liberals have idealized the nations of Western Europe, looking past Canada and preferring Britain, France and Germany as examples.
The Great Recession has changed all this — mainly because Canada avoided the worst of the global financial meltdown.
As Ken Kurson put it:
“When the worldwide system collapsed…Canada didn’t have a single bank poisoned by toxic assets and not a penny of public money was used to bail out its financial institutions.”
Of course, many businesses and individuals suffered, but it would have been much worse if Canadian banks followed more European-U.S. policies.
Israel, India and China all fared pretty well in the meltdown — as did Canada — while the U.S. and Britain were hit very hard. Canada’s traditional liberalism and conservatism helped shield it from the worse financial collapse other nations faced.
Modern liberalism and conservatism are mostly focused on winning office and promoting partisan agendas, whereas the traditional strains of both conservatism and liberalism are more interested in ideas, values and ideals.
Traditional liberals in Canada used government to put caps and controls on the nation’s financial institutions, keeping them from simultaneously posing as both lending institutions and speculators in the Japanese style that most European and U.S. banks have adopted.
And traditional conservatism kept banks and business from leveraging their resources at the high levels which brought down so many institutions in other nations.
One can argue with either the underlying Canadian liberalism or conservatism, but the results were a traditional kind of system that is too often seen in many advanced (and broke) nations as outmoded, quaint and passé.
For example, most U.S. mortgages were intended for sale while nearly all mortgages in Canada are still held by the banks where they originated.
In other words, Canadian bankers only made loans to people they intended to have as long-term customers; the happy result is that when the housing bubble burst such banks remained solvent.
Of course, all nations were hurt by the global economic downturn. Certainly, Canada, Israel, and other nations have their share of problems, but simple financial frugality and common sense are never old-fashioned.
What We Can Learn
There are at least two important lessons America should learn from this.
First, the traditional models of either liberalism or conservatism seem better for America than the modern, partisan styles of liberals and conservatives.
The commonsensical use of government combined with a free and flourishing private sector is vital to the future of freedom and prosperity. And the ideal is found in earlier American history rather than modern Canada, India or China.
Still, when China incentives free enterprise more effectively than the United States, the results are predictable. Freedom works, and when America ignores its own legacy it loses its strength and economic resiliency.
Second, technology doesn’t trump wisdom.
We live in a world where checks can be deposited through cell phone cameras, current events are taught better on QRANK than the nightly news, and mobile phone applications like Avoidr “allow Foursquare users to select the ‘friends’ they want to avoid” (and their phones keep them abreast of where their friends are at any given moment).
Amazon sells more books on Kindle than in hardback, and online media is causing many newspapers and now book publishers to disappear.
On a macro level, nanotechnology makes surveillance, theoretically, ubiquitous — it is becoming ever-present, everywhere, always.
As Graeme Wood wrote in The Atlantic:
“If the past several years in the shadow of a war against terrorism have taught us anything, it is that, once available, surveillance technologies rarely go unused, or un-abused.”
And governments are pursuing increasingly deeper rings of secrecy even though technology makes transparency possible.
All of these are ultimately the tools of human values and decisions. Indeed, the more powerful the technology, the greater the need for wisdom, limits, checks and balances.
It matters whether we learn these lessons or not. When the global economy broke down in 2008-2009, many businesses, industries and even states were bailed out by the federal government.
But the next round of major decline could easily force Washington to follow the majority of non-industrialized nations and even European countries like Greece, Spain, Portugal, and France in turning to international lenders for bailouts.
If this comes before 2012 or even 2020, as it certainly could, we will have to borrow from those who have money to lend — meaning banks in nations such as China, Israel or Canada.
Of all the possible candidates, we will most likely go hat in hand to Canada.
Revisionist History
The other option is simply to adopt fiscal responsibility on our own. A little common sense — both the conservative and liberal kinds — can go a long way.
Unfortunately, the opposite seems to be gaining momentum. After the end of the Cold War in 1989, the common wisdom seemed to be that capitalistic nations had overcome their communistic rivals.
But for many, the Great Recession has revised this conclusion. Now the theme seems to be that Soviet-style communism and Americanized capitalism are just the age-old battle between power and greed.
The emerging winner appears to be government-run industry, what The Economist called “Leviathan Inc.: The State Goes Back Into Business.” Indeed, these are the models followed by nations like China, Israel, Brazil, India and Canada that fared better than most in the recession.
Some leaders in Washington are taking note:
“[F]rom Berlin to Brussels, demand for industrial policy is back. Japan’s new government is responding to what it sees as the increasingly aggressive policies of foreign competitors by deepening the links between business and the state.
In America Barack Obama, the effective owner of General Motors and a chunk of Wall Street, has turned his back on the laissez-faire approach of the past: a strategic-industries initiative is under way.”
Unfortunately, the politicians are ignoring the rest of this report:
“Yet the overwhelming reason for China’s miracle is that the state released its stifling grip and opened the country to private enterprise and to the world…
India’s wildly successful software and business-process-outsourcing industries blossomed not because of help from the government, but precisely because its [government] did not understand these nascent fields well enough to choke them off…
In the rich world, meanwhile, the record shows, again and again, that industrial policy doesn’t work.”
The Real Need
I’ll take traditional liberalism or conservatism – either one – over the current modern Democratic or Republican models.
Commonsensical uses of government spurring a free economy, or a truly free-enterprise system with a limited government effectively taking care of the basics—either would be much better than the current reality.
Canada, Greece, Israel, China, Britain, France, Portugal, Spain, Germany, many other nations, and the United States — all could use a free-enterprise upgrade.
A constitutional, free enterprising, federal democratic republic which believes in freedom and applies its principles sounds like a utopian dream.
Or, it could just be a nation run by a truly educated, wise and active citizenry.
Without citizens who are effective overseers of the government, freedom doesn’t last anywhere. Because of this, even those nations which were less hurt by the Great Recession face difficult futures.
It remains to be seen what nation (or will it be a tribe, or something else?) in the world will become the new standard of freedom.
Such leadership will naturally flow to the society whose common citizens become a new generation of great citizens—like the American founding generations.
***********************************
Oliver DeMille is the founder of the Center for Social Leadership, and a co-creator of TJEd..
He is the author of A Thomas Jefferson Education: Teaching a Generation of Leaders for the 21st Century, and The Coming Aristocracy: Education & the Future of Freedom.
Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.
Category : Current Events &Economics &Foreign Affairs &Government &Leadership &Politics &Technology
Is Government Broken?
October 26th, 2010 // 4:00 am @ Oliver DeMille
Is our government broken?
More and more people think so. The current presidential administration makes periodic claims that we are in an economic recovery, but at the same time growth is still slowing and unemployment figures stay around ten percent.
With more American deaths in Afghanistan during the last week of July than any week to date, things seem to be deteriorating at home and abroad.
To make matters worse, few people believe that the opposing Republican Party has much more to offer than the Democrats.
With neither side poised to really fix things, few Americans have a lot of hope for the future of government leadership. Here a few of the issues vexing citizens.
A Missing Recovery
First, even though many politicians have been claiming that we are experiencing an economic recovery, it doesn’t feel like it to most Americans.
The Obama White House doesn’t seem very friendly to small business.
Most of the entrepreneurs and businesses who do hold cash aren’t about to hire or expand in an environment where their taxes and regulatory burden could be increased at any point by an unfriendly Administration.
Ironically, Washington is responding by promising to increase taxes and regulations. Understandably, those who hire are skittish.
Treasury Secretary Timothy Giethner said in July that we’ve reached a point where private hiring—rather than government spending—is the answer to economic growth.
But until the government starts supporting small business, and as long as it refuses to incentivize free enterprise, the economy will struggle.
Author Arthur Brooks argues that the nation is 70% in favor of free enterprise and about 30% opposed, but that the 30% are in charge.
The 30% has gained much influence over citizens by convincing them that it was private business that caused the recession in the first place.
Somehow, this view has successfully convinced much of the public that the Bush Administration, big banks, Wall Street and all small businesses are the same group.
Those who read the fine print, however, are clear that policies from the Clinton and Bush Administrations led to the mortgage crisis.
Moreover, big government and big business together caused the recession. In the meantime, both ignored small business and continue to do so.
As a result, the 70% is confused and unable to keep the 30% in check. So more government policies hurt the economy and make it unwise or unfeasible for small businesses to hire and grow.
In the meantime, much of the Right is busy labeling Democrats as “socialists” rather than helping incentivize growth and prosperity.
Both sides seem to mean well, but one has unbounded faith in government and the other is preoccupied attacking that faith.
While the two sides posture, the plight of small business is sometimes discussed but remains unaided.
What the Citizens Want
Second, this problem is deeper than most people realize.
Since World War II, the United States has promoted a mixture of free enterprise and big government. In history, societies typically emphasized one or the other.
When big government ruled, enterprise was highly regulated and taxed; where free enterprise was the focus, taxes were small, regulations were minimal, and governments were limited in size, scope and budget.
But in modern America, no politician from any party can claim success unless he/she has “done something in office.”
And to nearly all Americans, “doing something” means increasing government action to benefit the pet cause or regional constituency.
If President Obama doesn’t pass much of his agenda, his political friends and competitors alike will label him ineffective.
Americans in general want their politicians to do a lot and are disappointed when officials fail in this.
The irony of the American voter is that “doing a lot” immediately earns most politicians a place on the voters’ list of officials to vote out.
Americans today want the impossible: low taxes and lots of government programs.
The Economist summarized it this way:
In the end, the question of whether a country is governable turns on how much government you think it needs. America’s founders injected suspicion of government not only into the constitution but also into the political DNA of its people. And even in the teeth of today’s economic woes, at least as many Americans seem to think that what ails them is too much government, not too little.
“But there is a catch. However much Americans say they want a small government, they seem wedded to the expensive benefits of the big one they actually have…With deficits running at $1 trillion a year, and in order to stay solvent, they will have at some point to cut spending, pay more taxes, or both….To balance the books, politicians have sometimes to do things the people themselves oppose—even in America. That will be the true test of whether the country is governable.”
Americans must either choose big government and be willing to pay for and submit to it, or they must move toward smaller, less intrusive government and be willing to enjoy fewer government programs.
When voters want the prosperity of freedom along with the bread and circuses of massive government, every election is a referendum on incumbents.
Eventually, though (and the day of reckoning appears to be close on the horizon), something will have to give.
Unfortunately, few societies make such hard choices until they are forced upon them by war, depression, pandemic or other major crises.
Sadly, few nations have the leadership or the fortitude to adopt the simple solution of spurring major growth and prosperity by de-regulating, de-taxing and freeing up the economy.
Freedom works, but few in history have been willing to adopt it.
Lost Leaders
We are unable to overcome these and many of our deepest challenges because of the way we distribute leadership in our society.
The American founders envisioned a truly great educational system, built around schools in every locale, to train their youth in the great ideas of mankind’s history, as well as the latest practical arts and sciences.
They built the early American schools to train empowered citizens who would protect freedom, foster prosperity, leadership, and character in all walks of American life.
They wanted an educational system that prepared their youth to become effective in their families, communities, and careers.
This vision helped create a nation that by 1946 produced over half of the world’s goods and services with only 6% of the globe’s population.
Freedom works, and the success of the American constitutional-free-enterprise model was spectacular. In the process, this system over time addressed, and — in some cases, even began to resolve its biggest negatives, including slavery and other inequities.
Unfortunately, by the late 1930s, the citizens and leaders who built this great model of success, freedom, and prosperity sent their children and grandchildren to schools which rejected this system, and instead adopted a new style of education focused mostly on career training.
Sadly, these American schools established by the our founders were replaced after World War II by the German model which was based on socio-economic class divisions.
In the “new” system, the elites still received leadership education (like all citizens had before 1939) while the middle and lower classes were educated only for jobs.
As this system grew, a Germanic-style grading system reinforced class-society advancements among the youth.
The maladies of credentialism, class divisions, and reliance on experts made their way into mainstream American culture. From 1939 to 1979, these contagions grew and infected the Founders’ classless and “free American” vision.
In such a system, the motto was: “A students work for B students.” The concept of “The Company Man” spread and Americans became addicted to big institutions.
Freedom and entrepreneurial values gave way to competing for executive positions and benefits packages. The goal of employeeship replaced the American dream.
Career became the purpose of schooling in almost everyone’s mind, and ownership and leadership values begin to literally disappear.
Eventually big institutions became truly massive, and anything except employeeship was considered inferior and backward.
In this environment, young people with a sense of leadership, idealism and ambitions to make a great impact on society split between the Left and the Right.
Those coming from traditionally conservative families tended toward majors and careers in business, while youth from more liberal backgrounds leaned towards the media and legal professions.
Most of today’s national leaders were part of this split.
The Reagan era ushered in a revolution of support for and promotion of free enterprise ideas and values.
Numerous non-traditional business models (like multi-level and network marketing) put individuals at the center of building a personal business rather than working as an employee, and eventually non-traditional educational options (from private and charter to home and online opportunities) grew in popularity.
Employeeship was still the dominant view, but a rising minority embraced the freedoms and prosperity of entrepreneurship. The dot.com boom and Roaring 90’s soon followed, and the entrepreneurial sector slowly grew.
Today a new culture of education and business is evolving out of the Great Recession and all that led up to it. A new maxim seems to be much more complex than in past generations:
- B students work for C students
- A students teach or work in government
- Those who cared little for grades and a lot about learning are building small businesses
Note that “those who cared little for grades and a lot about learning” often come from non-traditional private, charter, home and online learners, as well as from immigrants who are leading in entrepreneurial successes. And more than a few come from the traditional schools.
Since small business accounts for 80% of America’s economic growth, this is a significant development. Unfortunately, the number of people in the entrepreneurial sector is still very small.
Whether purposely or as a side effect, we are still training the overwhelming majority of our youth to believe that being A students means getting a good job and that employeeship is the greatest goal for education and even lifestyle.
Satirist P.J. O’Rourke addressed the problem this way:
America has made the mistake of letting the A student run things. It was A students who briefly took over the business world during the period of derivatives, credit swaps, and collateralized debt obligations. We’re still reeling from the effects…
“It was a bunch of A students at the Defense Department who planned the syllabus for the Iraq War….The U.S. tax code was written by A students….Now there’s health care reform—just the kind of thing that would earn an A on a term paper from that twerp of a grad student who teaches Econ 101…
“A students must do what teachers and textbooks want and do it the way the teachers and texts want it done….Such brisk apple-polishing happens to be an all-too-good preparation for politics. This is because a student’s success at education and a politician’s success at politics are measured mostly by input rather than outcome.”
Perhaps even more disturbing is that most of our Idealistic youth with ambitions to improve the world are still going after jobs in big business or big government.
The thing is, working for a big corporation or in a government job are unlikely places to really make a positive difference in the world.
We are distributing leadership in the way aristocratic and socialistic societies always have, and the future will unfold accordingly unless something changes.
We desperately need a rebirth of the entrepreneurial ideal.
The New Religion: Employeeship
Unfortunately, it’s not just the schools and universities that are continuing this outdated focus on jobs as the end-all of education and life.
Movies and television often demonize entrepreneurs while dedicating most of their time to stories about employees.
Full-time sports channels seem to dedicate as much time to the business side of athletes as to the entertainment, making sports role models as valued for their lucrative contracts as for their abilities on the playing field.
Even elected officials more typically refer to their role as a job than as public service.
Recent administrations and the media have referred to the constitutionally-titled commander in chief as the nation’s CEO. There are many other examples.
Because the “job-is-life” view is so prevalent, it has even become normal for successful entrepreneurs to see their work as done as soon as they can live comfortably.
In earlier generations (those that built and maintained American freedom), such successful entrepreneurs considered it their duty to spend the second half of their life helping society greatly improve.
Perhaps only parents and community leaders can effectively counter this trend and help more youth who want to help improve the world seek a true leadership education and seriously consider engaging in entrepreneurial careers.
Repairing the Break
So, to answer our question, yes, government is broken. The break is repairable, but it will take some major work and effort on the part of this generation.
When freedom is decreasing through constantly increasing regulations, government is broken. When the free enterprise system is under attack from our own government, government is broken.
When a tenth of our working society can’t get a job, and when the government responds by increasing taxes and regulations on those who could provide the jobs if they were free to do so, government is broken.
When two parties hold a monopoly on government, and where both increase spending and regulation no matter who is in office, government is broken.
But all of this misses the real point.
When most of society seeks employeeship above all else and every facet of life revolves around employeeship, much more than government is going to be broken.
Employeeship certainly has a place in effective nations, but it should be prioritized behind things like family leadership, citizenship, and private ownership.
Another name for these is life, liberty and the pursuit of happiness (or alternatively, as Jefferson originally wrote, “life, liberty and property”).
A successful society is made up of at least the following things:
- Effective parents, grandparents and other family leaders who help raise good, wise and industrious adults to take their place
- Citizens who are well-educated in freedom and leadership and who keep government, business and other officials in check so the society can remain free and prosperous
- Owners who improve the prosperity of society, in a free enterprise system where all can be owners
- A constitutionally guaranteed freedom where all are treated equally before the law and all are protected in their inalienable rights
How the President Can Repair the Economy
In the 2008 election President Obama was supported by the Left (who loved his promises of economic liberalism), but he was elected by independents who saw in him a possible end to the corruption of the Bush years and a potentially great leader for the United States.
The “Leadership Thing” swept him into office. Now, the Obama Administration could greatly boost the economy by deeply promoting entrepreneurship—both symbolically and in reduced taxes and regulations.
Such incentives would spur more hiring, investment and expansion, and a recovery would follow that Americans could really believe in.
In fact, the President could probably accomplish this without changing any policy at all, simply by warming to small business and genuinely becoming friendly to entrepreneurs.
As a friend, a member of a minority, told me about President Carter:
“I didn’t agree with his politics or policies, but I just feel that he loved me and my people and cared about us. I never felt that from Reagan or Bush, and so I voted Democratic even though I was more aligned with the politics of the Republicans.”
An old advertising proverb says that people make choices emotionally and then use logic to defend it.
No matter what Washington says, and no matter what the economic numbers show, most entrepreneurs are unlikely to increase jobs and boost the economy through investments as long as they think the man in the White House basically dislikes and mistrusts them.
Even liberal-leaning businessmen are worried that the President isn’t supportive.
The White House could drastically help the recovery simply by changing its bias against small business. If this is just a perceived dislike of business, not a real one, they can simply change their message.
If, on the other hand, the Administration really does mistrust or dislike small business, it should reconsider. After all, unlike Wall Street, big banks and big corporations, small business simply cannot be blamed for America’s economic challenges.
It has been the victim of the mistakes made by both big business and past government. Yet it keeps plugging along, keeping the recession from being much worse.
And small business certainly is the group most likely to overcome high unemployment.
Indeed, when the economy does make a serious comeback, entrepreneurs will be leading the way. Hopefully, the Obama Administration will extend its “Yes, We Can” philosophy to those who have the most potential to drastically grow our economy.
Conclusion
It is time for all Americans—from the White House to our individual living rooms—to pour out a deep, genuine and heartfelt admiration and “thank you” to those who run small businesses.
Whatever the politicians of any party do, the greatest need is for parents, grandparents and all of us to rekindle an excitement for entrepreneurship in the youth.
The future of America’s freedom and prosperity may well depend on it. As long as free enterprise isn’t flourishing, our government will be broken.
***********************************
Oliver DeMille is the founderof the Center for Social Leadership, and a co-creator of TJEd.
He is the author of A Thomas Jefferson Education: Teaching a Generation of Leaders for the 21st Century, and The Coming Aristocracy: Education & the Future of Freedom.
Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.
Category : Business &Constitution &Culture &Current Events &Economics &Education &Entrepreneurship &Generations &Government &History &Leadership &Liberty &Politics
Why We Need a Renaissance
October 22nd, 2010 // 4:00 am @ Oliver DeMille
The problem with revolutions is that they throw out the good with the bad.
Promoters of revolution gather support by peddling hate of the current system and those who lead and benefit from it, so when they get around to making changes they have actually discredited much of what is good in society.
Indeed, this is why some scholars have argued that the American Founding was not truly a revolution like those in France and later Russia.
Reforms, many thinkers rightly suggest, are gentler than revolution and can still result in positive improvements.
Unfortunately, reform thrives by re-empowering entrenched institutions, systems and even groups that are often more than just a little invested in doing things without change.
Reform tinkers with the edges while leaving the majority of the failing system intact.
Making reforms can certainly bring needed improvements to an organization or society, and sometimes little changes are enough.
The rule of thumb is to avoid revolution unless those things you hold most dear are under attack and clearly threatened, and to rely on reform when the issues and consequences aren’t quite so drastic.
Revolution throws out the good and bad of the past and replaces it with an all new system, while reform leaves the system mostly unchanged but alters certain procedures, institutions or personnel.
There is another option which approaches things very differently, and which can bring major change without the pain of revolution.
This option is Renaissance.
Renaissance is unlike revolution and reform in many ways, but can often deliver the positive results of both.
Renaissance operates from a very different premise than the other two, because it focuses on drastically changing people instead of things.
It changes people from the inside, and then leaves it to them to alter their lives, choices and actions in ways that reform the past and revolutionize and redirect the future.
When societies emphasize progress through revolution or reform, they focus on institutions, laws, policies, funding, credentials, resources, and other manifestations of the physical world.
In contrast, renaissance emphasizes the soul.
When people change their ideas, feelings, goals, dreams, loves, beliefs, passions, ideals, objectives, wishes, relationships and other intangibles, the future is forever impacted.
While these may seem ethereal to some, their impact on history is certainly concrete and momentous.
Two Models
In times of consistent economic growth, plentiful jobs and easy capital, the characteristics of success are often consistency, schooling, training, expertise, steadiness, reliability, obedience, compliance and longevity.
Schools in such environments teach memorization, fitting in, impressing superiors, and excelling within the guidelines, and jobs tend to reward these things.
But when the economy is struggling, jobs are difficult to get and keep, employers are laying off and reducing costs, and/or capital is scarce and minimizing risk, a different set of values dominate.
Traits like capability, skill, ability, initiative, resiliency, optimism, inventiveness, ingenuity, ability to inspire others, frugality, resourcefulness, tenacity and especially enterprise are most valued by the economy.
Schools and parents in such times need to help students increase creativity, imagination, originality, individuality, mental agility, emotional resolve, innovation, risk and entrepreneurialism.
We have been in a general growth period for nearly fifty years, and we are now in a struggling economic era, so the values are in transition from the first list to the second.
Parents and grandparents are still likely to dispense advice from the old economy, emphasizing things like test-taking, credentials and impressing superiors over the new economic realities such as initiative, individuality, originality and entrepreneurialism.
The government is stuck in the same rut, trying and failing to fix major societal challenges with trivial, albeit expensive, reforms.
Where they do attempt to make huge changes, such as in health care and financial reform, their symbolic and revolutionary-style agendas are creating more anger, frustration and deficits than actual solutions.
Tea Party responses further fuel the revolutionary rhetoric in the media and on Capitol Hill–but things remain mostly unchanged.
This lingering “business as usual” in Washington is alarming in a society with significant problems and major challenges in many fields of life.
From the obvious economic problems to unending international quagmires in Afghanistan (now the longest war in American history), Iraq and a number of other places, to a decaying infrastructure of roads and bridges, rising health care costs (unsolved and further complicated by the new health care law), decreasingly effective schools, high unemployment, unsolved levels of crime, and so on, we need real leadership and solutions that actually remedy our national problems.
Revolution is not the answer.
There is much that is good in America, and we want to surgically solve our problems without undoing the many positive things we have built into our society.
But the reform mentality isn’t working either, and the problems have been piling up for over a decade.
We need to drastically improve society, deliver solutions to overcome our most pressing problems, and simultaneously maintain the things which are already working.
Despite the attachment of both political parties and nearly all of our major public and private institutions to reform thinking, we need something much more effective.
We need change from within, a drastic alteration of attitudes and goals and thinking across our nation.
We need people to imagine a better future, to really believe in the reality of what we can do, and to take action.
We don’t need more stirring speeches from the President or any other leader so much as we need millions of individual Americans to get work–alone and in small groups–on solving our problems.
In short, we need a renaissance. And we need it soon.
The Power to Change
Fortunately, the greatest power in all of this may simply be individuals taking action and parents discussing the new values (initiative, ingenuity, tenacity, entrepreneurialism, and so forth) with their children and youth.
In fact, the American spirit of resourcefulness, optimism and enterprise is alive and well. More of us just need to take the leap.
The difficulty, of course, is that the old values were against risk.
In the old economy, the one that dominated from 1945 to 2008, risk was scary and often unrewarding.
A lot of people made small to large fortunes in entrepreneurial ventures, small businesses, network and multilevel marketing, and other non-traditional enterprises, but a lot more lost money in such attempts and ended up dependent on jobs like nearly everyone else.
The lesson for many people was just to get a decent education, a regular job, and a secure benefits package.
Like in Defoe’s classic Robinson Crusoe, many parents shared the advice not to aim too high or too low, but just to be content with “the middle station” in life.
A decent house, two cars, cable television, a good grill and a family membership at the local rec center — these were the dreams of two generations of Americans.
Robert Kiyosaki develops this theme in various interesting dialogues in the best-selling Rich Dad, Poor Dad (affiliate link).
But in the new economy, such a course is likely to create permanent economic struggles in your life. In this economic environment, without risk few people get ahead.
Entrepreneurial thinking, originality and initiative are the new credentials.
Tenacity, ingenuity and enterprise are the new job security.
This is true even among much of the traditionally employed population. The stakes are higher now and success is more difficult across the board, and thinkers, leaders and innovators are needed.
Early Adapters
But how to get the population on board with the new values? Most of us were raised, educated and lived our careers in the old economy, and shifting to the new realities is proving troublesome.
If the Great Recession is just a blip in history and the days of easy credit and consistent growth return for a decade or more, people will justify this refusal to transition their thinking.
But if, as all indications and evidence seem to suggest, the times of high unemployment, a difficult growth environment and a sputtering economy are here to stay for a while, we are kidding ourselves and hurting our futures by refusing to adapt.
No policy, institutional plan or governmental debate is likely to shift the national mentality from employee thinking to entrepreneurial values.
A renaissance is needed. Our vision must change, and our dreams must imagine the great opportunities available in the new realities of the future economy.
We must, as a people, engage a massive migration toward the new economy.
We can lead the economies of the world, but we have to embrace the new reality and get to work. Until a mental renaissance occurs, we are stuck in a rut of old thinking.
Of course, even if the majority refuses to move forward in this new world, each of us can make these changes and get started on our own journey.
In fact, those who get started first are more likely to benefit and profit than the latecomers. This is true in any nearly any industry and endeavor. The early bird gets the worm.
And, as the early adapters get to work, it is empowering to those who are waiting for validation or credibility to justify the risk so they can get on board as well.
There are already a few who are pioneering and building in the new economy. For example, the “downshifter” trend took successful people from the coasts to small towns to build an entrepreneurial new economy starting in the late nineties.
Likewise, homeschooling and the organic foods movements addressed problems in education and health care using new economy thinking long before the 2008 economic meltdown.
Both continue to grow as the rest of the economy unsuccessfully grasps for solutions. Indeed, few whole foodists were (or are) too concerned about health care reforms–because they are, simply, healthy.
Participatory religion continues to grow, as the old-line religions dependent on Priests and Professionals watch their numbers dwindle.
Public schools and teacher unions are increasingly concerned with the growth of charter and other non-traditional educational offerings, and the rise of for-profit career colleges has the old educational bureaucracy hiring lobbyists and badmouthing these “upstart” competitors.
With just one of these schools, The University of Phoenix, quickly becoming the largest university in the world, the old system sees its monopoly fading.
There is a shortage of new economy thinking because the whole nation needs to make the shift, but there are numerous examples of leaders and groups making the transition.
Indeed, literally thousands of online “tribes” are slowly moving (and many are going more quickly) in the right direction.
A few guidelines for transition to the new economy and values include:
- Start young, or if you are older, help the young get started
- Don’t seek to impress the old elite, but rather go after real results
- Get past the old value of not taking risks
- Be experimental, not limited by old systems, methods or models
- Don’t be limited by old obstacles like office space or business cards
- Don’t get stuck on hierarchies, titles and power struggles
- Think virtual, tribal and international
- Be inclusive, open and interconnected
- Be mindful of the way information grows
Conclusion
In the Information Age, revolution would cause as many problems as it might possibly fix, and reform has proven too feeble to really bring necessary change.
We need a massive internal renaissance of the great explorer, frontier, pioneering, and entrepreneuring values which took Pilgrims to the Mayflower, 49’rs to the plains, and led generations of Americans to build the businesses, families, schools, churches, and communities that made our nation great.
We need to accept that we live in a new economy and embrace the new values which bring success in our new environment.
Chief among these are initiative, cheerfulness, persistence, and an enterprising mentality. We need to engage the powerful flow of information in this age, and help it spread and lift the plight of peoples worldwide.
Each of us has a vital role helping the future emerge, and it is time to take the leap and get to work on those things we have always felt we should do.
Or, if we are already hard at work doing our part, it would be well to smile, laugh more often, and give our full attention to watching a sunset or contemplating a tide as it comes in.
It is time for a renaissance, and if the whole nation doesn’t lead out, each of us can embrace it anyway.
Above all, it’s time to take a deep breath, exhale any doubts, and sit down with our youth and share our vision of the new world and the renaissance ahead.
***********************************
Oliver DeMille is the founder of the Center for Social Leadership, and a co-creator of TJEd.
He is the author of A Thomas Jefferson Education: Teaching a Generation of Leaders for the 21st Century, and The Coming Aristocracy: Education & the Future of Freedom.
Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.
Category : Economics &Entrepreneurship &Featured &Government &History &Information Age &Leadership
