Citizenship

Debts and Deficits: A Jane Austen Story

August 2nd, 2011 // 10:54 am @ Oliver DeMille

Chapter I: A Truth Universally Acknowledged

It is a truth universally acknowledged, that when a nation treats business badly, corporations with extra capital take it abroad and the home nation faces job losses and economic challenges.

Such nations experience widespread anxiety about their future, problems feel overwhelming, and the leaders seem unable—or unwilling—to find and implement effective solutions.

But the answers are actually quite clear, if only the people and their leaders have the courage to apply them.

When great nations struggling with debt, deficits, sluggish growth and high unemployment cultivate the most friendly global environment for business investment and economic growth, their economy booms and flourishes.

The current debate in Washington about debts, deficits, taxes, spending cuts and political parties is a lot like a Jane Austen novel.

There are attractive, well-spoken charmers who turn out to be villains, shockingly inappropriate self-promoters, and well-meaning individuals of influence whose personal flaws and arrogance cause problems around them—even as they are entertaining to the audience.

There are also regular, good people who stand to gain or lose a lot.

And, above all, there is the romance of important things happening, things which touch us on a level deeper than the intellect.

The most striking similarity, however, may be that the first paragraph of the story—and even the title—contain the whole answer.

Readers who carefully ponder the thoughts of the first paragraph of certain Austen novels get a preview and veritable overview of the whole plot to come.

In Pride and Prejudice, for example, the reader discovers in the first several sentences that the daughters of a modestly-situated family are in need of marrying well and that their prospects have just improved due to the proximity of a promising young man.

The plot is pretty much determined at this point.

The girl will get the boy, after some courtship, disappointments, major crisis, and so on.

And since we are told right off the bat that more than one girl needs to get a boy, we can be sure that at least some of them will succeed.

The title helps too: we can be fairly certain that the disappointments and crises will have something to do with pride, prejudice and misunderstandings, and that when these flaws are overcome the crises will be over and the story will find resolution.

The same is true of our current national narrative, which could be entitled Debts and Deficits.

Chapter II: A Rocket Science Conclusion

It really isn’t rocket science to conclude, even without going into detail, that deficits will be solved by spending less than we bring in, and that debt will be overcome either by not borrowing too much in the first place or by growing the economy to bring in surpluses that pay off the obligated amount.

Of course, it is in the details, dialogues, relationships and minutiae that the real fun is found.

Who will succeed?

Who will show their true colors?

Which characters will face reality and change?

How will the audience respond?

Still, whatever the particulars, the plot is generally known from the beginning.

Yes, it is within the realm of possibility that the whole thing could turn strangely off course.

The story could progress, develop and build toward crescendo only to suddenly go in some strange and totally unexpected direction, but only by refusing to overcome the debts and deficits.

These are what the story is about, after all, so dealing with them is vital—and eventually this is what will happen.

Americans want two things which seem to be in conflict with each other.

Chapter III: Greedy Americans

First, they want freedom, opportunity, prosperity, low taxes and non-intrusive government, and, second, they want a lot of government programs that provide significant benefits which they have become accustomed to enjoying—from roads and schools to trash collection, national defense, personal protection, prescription drug benefits, retirement checks, and much more.

At first glance, it seems impossible to simultaneously increase both.

Either government spending must go down or taxes must go up.

This is the crisis.

Darcy wants massive new programs that will require huge government spending increases, while Lizzie wants tax cuts and decreases in government red tape.

You can imagine the letters they would exchange on the subject.

As the disagreements escalate, both sides eventually resort to name calling: “inferior connections,” “lack of gentlemanly behavior,” “tax cuts for the rich,” “socialists,” “party of no,” “the President has no plan,” etc.

Still, the plot is basically set: overcome your pride or you won’t get what you want, realize that your prejudice has caused you to misread people and their real character, spend less than the nation takes in or see fiscal problems exponentially increase, become attractive to business investment and hiring or watch the economy and unemployment continue to sputter.

Mrs. Bennett’s behavior is shocking; no wonder Darcy feels pride in comparison.

The corporate tax rates in the United States are double those of our top competitors; no wonder jobs are scarce in the United States.

Sometimes the context tells the whole story.

David Cote said on Meet the Press:

“Right now the problem we’ve got is uncertainty of demand. Businesses don’t add until they’re sure that somebody is going to want to actually buy something. To that we’ve added uncertainty of regulation, and when you combine those two it just causes businesses to say, ‘I’m going to wait a little bit.’ And I always find it interesting when I hear government say, ‘We need to create jobs…’ Actually, government doesn’t create jobs. Government can create an environment where jobs can be created, and I think it’s important to start to distinguish between the two.”

Ohio Governor John Kasich added, in the same conversation:

“In my state, where we faced an $8 billion deficit, we wiped it out and eliminated it, and here’s the interesting thing: we have just been taken off of negative watch [credit rating]. In the middle of this we also have jumped—according to CNBC—11 places in terms of business friendly [states]. We’ve been able to cut taxes, improve and reform government, and you know why? We looked it square in the eye because Ohio was dying, and we are beginning to really become business friendly. That is what they’re not doing here in D.C. right now.”

Ohio faced a massive deficit, and overcame it by becoming business friendly, by attracting business growth.

As a result, they were able to cut taxes and drastically improve their economy.

But Washington has yet to make such changes.

As Senator Marco Rubio said on Face the Nation,

“If you talk to job creators, not politicians, not presidents, they will tell you…they’re looking for some regulatory reform….because they think these regulations that are being imposed make America a more unfriendly place to do business. When people tell you, ‘communist China is a better place to do business than America,’ you know you’re in trouble.”

As Jack Lew, Director of the White House Office of Budget and Management said on This Week With Christiane Amanpour,

“It’s not enough for us just to do what we have to do. We have to do as much as we possibly can to deal with the fiscal challenges.”

Chapter IV: A Strategy for Washington

The strategy for Washington is clear.

Become business friendly.

Cut spending to get our fiscal house in order.

Cut the corporate tax rate to make America’s business environment competitive with other nations.

That’s the only jobs program Washington needs.

I recently heard a radio talk-show discussion that suggested the United States can’t make the needed changes without a huge crisis.

Unless we engage a massive military conflict, one commentator argued, the American people will never be willing to fund the level of government spending needed to get our economy turned around.

This kind of thinking is entirely wrong.

Yes, Darcy must have become even more attached to Lizzie by facing the Wickham crisis and bringing it to resolution, but every indication is that he would have fully pursued her anyway—and everyone would have been better off without the crisis.

We may need crisis to get us to do the right thing with our economy, but we really should just do it without waiting for calamity.

The Great Recession, continued unemployment and our sluggish economy are crisis enough.

And, again, the solutions are clear.

They were inherent in the plot before the economy ever started struggling.

When you spend more than you have, stop.

When you need more than you have, become attractive to business opportunity.

Pay your bills.

Don’t default.

Don’t keep increasing the debt without reducing spending and following a valid plan for fiscal prosperity.

Make hard choices because they are the right thing to do, regardless of what the Lady Catherines or Mr. Collinses of the world will think.

There is only one way this can end: We have to get our fiscal house in order.

Chapter V: Happily Ever After or…Not So Much

Image Source: Pride and Prejudice, A&E. 1995.

We can do this right now, with celebrations and smiles, or we can refuse to make the right choices and let world markets force our government spending, regulation and excesses to change.

But change they will.

We can marry Darcy or Wickham, but marry we shall.

That ending was foreshadowed when the first page was written.

The story of the United States right now is Debt and Deficits, and there can only be one ultimate conclusion.

Debts and deficits are real, we have them, and we must overcome them—by choice or natural consequences.

How much we suffer between now and the last page depends on us.

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Oliver DeMille is a co-founder of the Center for Social Leadership, and a co-creator of Thomas Jefferson Education.

He is the co-author of the New York Times, Wall Street Journal and USA Today bestseller LeaderShift, and 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 : Blog &Citizenship &Constitution &Economics &Featured &Government &Leadership &Politics

Our Government Isn’t Broken

August 1st, 2011 // 10:22 am @ Oliver DeMille

The Third Party Solution

Our government isn’t broken.

It is just caught in the past.

Specifically, the current divide between the parties is a mirror image of the country.

Politics is a reflection of society, and the bickering right now in Washington is a direct projection of the nation.

There is one big exception.

The nation is divided into three major political camps.

The problem is that the two smallest camps (Democrats and Republicans) have party representation in Washington while the largest camp (independents) does not.

In short, it’s not that our government is broken, but rather that we are stuck in a twentieth-century structural model even though the society has fundamentally changed.

Instead of a two-party nation sending its representatives to Washington, we now have a three-party society where the biggest “party” must divide its representation between the two smaller parties.

It’s not broken, it just acts like it.

The Great Fall

This situation began to develop when the Berlin Wall fell in 1989.

Up to that point, the two-party model was a natural reflection of a nation engaged in a long-term Cold War with an enemy capable of destroying our entire civilization.

This omnipresent reality colored all policy for over four decades.

Having sacrificed greatly to overcome major conflicts in WWI and WWII, the large majority of citizens from both parties stood firmly together against the Soviet threat.

When the Cold War menace significantly decreased, Americans took a long sigh of relief, and then they reassessed their priorities for government.

Some felt that the needs of big business were the top priority, others considered moral issues the lead concern, while still others deemed an increase in social justice the major challenge.

The first two pooled resources in the Republican Party, while social liberals and those emphasizing social justice combined in the Democratic Party.

The largest group of Americans rejected both of these extremes, feeling that government should indeed fulfill its role to corporations, societal values, and social justice, but also to a number of other vital priorities including national security, education, and fiscal responsibility.

But, because independents come from many viewpoints and also because they have no official party apparatus in Washington, the biggest political group in our nation today has little direct political power except during elections.

The consequence is that subsequent elections tend to sway widely in opposite directions.

When independents put Republicans in power, they are naturally (because they are not Republicans) frustrated with how the Republicans use that power.

When, in contrast, they vote for Democrats, they find themselves discouraged with what Democrats do in office.

This is a structural problem.

When Democrats elect a Democrat, the elected official can swing to the center once in office because while supporters may dislike their Democratic official’s actions they will almost always still vote for him/her in the next election—after all, in their view the Republican would be worse.

The same applies to Republicans electing a Republican.

All of this changes when independents put a Democrat, or a Republican, in office. Naturally, the elected official will disappoint supporters in some way, and independents are as likely as not to believe that a candidate from the other party will do better.

Historical Realignments

When similar historical realignments of politics with cultural shifts have occurred, a major new political group in society reformed one of the big parties to fit its new views.

For example, when the Declaration of Independence and hostilities with Britain changed the old Tory versus Whig debate, the Loyalists mostly joined the new Federalists while the Whigs split between the Federalists and Anti-Federalists.

When the new U.S. Constitution changed the makeup of society and made the Federalist versus Anti-Federalist debate obsolete, most of the Anti-Federalists joined the Jeffersonian Democratic Republicans while the Federalists split between the Democratic Republicans and the Federalists.

Other such changes have happened several times in American history, most notably in the 1830s, 1850s, 1910s, 1930s and 1960s.

Note that in the twentieth-century shifts the names of the parties (Democrat and Republican) did not change even though political philosophies were significantly altered during these periods of realignment.

The current repositioning may or may not adopt a new name for one of the parties, but a philosophical shift is occurring nonetheless.

Some believe that this shift is fundamentally rooted in social concerns, from issues of gender and sexual preference to values debates and immigration.

But this is a view left over from the twentieth-century style Democrat-Republican argument.

The rise of independents is not a morality-driven movement.

It’s mostly about the economy.

The New Party

The new party of the twenty-first century will emphasize economic growth and getting our financial house in order.

Many independents will flock to this party, whatever its name—Democratic, Republican, or something else.

This is the party of the future.

And while analysts say that independents are not joiners, it is likely that many would join such a party.

Note that a real three-party system is not likely to last.

A third party may arise, as Thomas L. Friedman and others have suggested, but history suggests that t will eventually take the place of one of the top two parties.

There is an important reason for this.

The American framers did not want the U.S. President to be elected by a plurality of the nation, so they wisely structured the Electoral College in a way that the President can only be elected by a majority of electoral votes.

This means that any third party will eventually have to gain the support of one of the other parties in order to win the White House.

This constitutional reality is one of the most important things keeping America strong.

Without it, any extreme party might win a given election and take the nation in even more drastic directions than we’ve witnessed to date.

To sum it up, the frustration with two-party infighting is a positive thing.

The framers rightly foresaw that the greatest danger to America would be an apathetic citizenry, and the Electoral College requirement for majority has caused a no-party or two-party structure and also incentivized citizens to stay informed and involved.

When a powerful third party arises in America, it has always come in response to a change in society and it has always worked to reform the two existing parties in ways that better reflected the desires of the people.

This is a huge positive, as chaotic as it may seem at times.

Seriously?

Today, it is independents that most dislike the party bickering, and as a result independents are more actively involved in government.

This is a powerful check on the aristocratic-political class, and shows once again the brilliance and inspired effectiveness of the U.S. Constitution as established by the framers.

Our government isn’t broken, but the current two-party system is outdated.

Neither party truly represents the views of the largest political “group” in America—independents.

Until this problem is fixed, the entire political system will look untenable and appear unable to solve major American problems.

But such realignment is already occurring, albeit slowly, and the future belongs to whichever party—Democrat, Republican or a third party—gets serious about three things:

A moderate view that government has an important role to play in society and that it must also be limited to the things it really should do like national security, schools and basic social justice
Actually getting our financial house in order
Creating the environment for widespread enterprise and a true growth economy

The party that effectively and consistently champions these things will be the leading political group in the years ahead.

In other words, some major shifts in the parties are ahead.

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Oliver DeMille is a co-founder of the Center for Social Leadership, and a co-creator of Thomas Jefferson Education.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

Category : Blog &Citizenship &Constitution &Current Events &Featured &Government &Independents &Leadership &Liberty &Politics &Statesmanship

Meritocracy is Elitism

July 19th, 2011 // 6:01 am @ Oliver DeMille

Modernism dislikes all types of elitism– except for meritocracy.

When elite status is merited, according to this view, it is a good thing.

In such a society, our elites are:

“…made up for the most part of bureaucrats, scientists, technicians, trade-union organizers, publicity experts, sociologists, teachers, journalists, and professional politicians. These people, whose origins lay in the salaried middle class and the upper grades of the working class, had been shaped and brought together by the barren world of monopoly industry and centralized government.”

Cool quote, right?

This was written by George Orwell in his description of Big Brother’s society in Nineteen Eighty-Four.

Some may think that a meritocracy is the same as Thomas Jefferson’s “natural aristocracy,” but in fact the roots of the two are quite different.

In a meritocracy some rise to elite status through their individual merit, which is determined by the institutions of society.

In short, the current elites get to choose their successors—those of merit determine which people in the rising generation are to be people of “merit.”

In contrast, Jefferson’s natural aristocracy rose because of their “virtue, wisdom and service” to humanity.

And the current societal servants don’t choose tomorrow’s natural servants—they arise naturally according to their service.

Meritocracy offers special perks and benefits for those who are accepted by the current generation of elites.

A natural aristocracy looks around, sees needs and gets to work meeting these needs.

Meritocracy is the best way to choose elites (far better than basing it on land ownership or heredity, for example), but elitist society of any kind is far from the best choice.

Leaders arising naturally through genuine merit is a different thing than meritocracy.

Government by the people is a real concept, not just an idealistic dream.

It gave us the most free and prosperous nation and society in history, and it can do so again.

To repeat: merit, not meritocracy.

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Oliver DeMille is a co-founder of the Center for Social Leadership, and a co-creator of Thomas Jefferson Education.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

Category : Aristocracy &Blog &Citizenship &Culture &Education &Featured &Leadership &Postmodernism

Where is Wisdom?

July 8th, 2011 // 7:18 am @ Oliver DeMille

Throughout the history of Western Civilization, a high priority has been placed on Wisdom.

The great classics are the Western world’s repository of wisdom, and the application of wisdom to governance, art, science, business and all fields has resulted in success and progress.

Over time these two children of wisdom (progress and success) started their own traditions and today they are competing schools of thought replete with their own unique literature, institutions and promoters. Unfortunately, both have largely lost touch with their original connection to Wisdom.

In politics, the left is dedicated to progress and the right to success. Nearly everything conservative politics supports is based on the goal of achievement and success, while most of the liberal agenda cares primarily for social progress.

In science and the arts this division fuels the split between artists/scientists and mere marketers, and religion has found a role in modernism partly as a voice against excesses of the search for progress and success.

Professions in business, law, medicine, journalism and education have long been places where leaders could promote success and societal progress, but in recent decades the emphasis on wisdom in the professions has waned.

Attorneys, doctors, professors, journalists and executives are very different people when they are earning than when they are learning, as an attorney friend told me.

As a group, the professions have split—some professionals on the conservative, success-oriented side of the ledger with its focus on achievement and others on the liberal, progressive side and its belief in institutional power and government programs.

The fact that in all of this the goal of a wisdom society is almost lost is a modern tragedy. Unless it is reversed, it will only be the first tragedy of many—societies which lose their focus on seeking and applying wisdom inevitably lose their prosperity, freedoms, strength, power and standard of living.

The likelihood of Washington fixing this problem is very slim—Washington is, in fact, the epicenter of the problem.

The party of progress and the party of success constantly block each other’s goals, ignoring wisdom in a battle which has kept the nation in a rut now for decades.

As a society, we seem to want our political leaders loyally partisan rather than notably wise.

If politicians won’t solve our problem, where will wisdom leadership come from in our society? Go to a major bookstore—a few shelves of success literature are surrounded by many shelves promoting societal progress.

The coffee shop, small reading tables, and dress of the shoppers point to progressive society.

The occasional suit enters briskly, finds what he wants, and exits. Too busy to lounge with the other readers, he often skips the store and sends an assistant or gets his books online.

This description is, by the way, a precise depiction of our university campuses.

The thinking style of life and the active style are too seldom combined, and a result is that wisdom is too often lacking. This needs to change, or the future of freedom will suffer.

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Oliver DeMille is a co-founder of the Center for Social Leadership, and a co-creator of Thomas Jefferson Education.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

Category : Blog &Citizenship &Culture &Education &Featured

The Little Fix

May 4th, 2011 // 2:45 pm @ Oliver DeMille

Sometimes small and simple things make all the difference. Malcolm Gladwell called this “the tipping point,” and an old proverb speaks of mere straws “breaking the camel’s back.” In my book FreedomShift I wrote about how three little things could—and should—change everything in America’s future.

Following is a little quote that holds the fix to America’s modern problems. This is a big statement. Many Americans feel that the United States is in decline, that we are facing serious problems and that Washington doesn’t seem capable of taking us in the right direction. People are worried and skeptical. Washington—whichever party is in power—makes promises and then fails to fulfill them.

What should America do? The answer is provided, at least the broad details, in the following quote. The famous Roman thinker Cicero is said to have given us this quote in 55 BC. However, it turns out that this quote was created in 1986 as a newspaper fabrication.[i] Still, the content of the quote carries a lot of truth:

“The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt.”

Consider each item:

Balance the budget. There are various proposals to do this, nearly all of which require cutting entitlements and also foreign military expenditures. Many do not require raised tax rates. But most Americans would support moderate tax increases if Washington truly gets its outrageous spending habit under control. Paying more taxes in order to see our national debts paid off and our budgets balanced would be worth it—if, and only if, we first witness Washington really fix its spending problem.
Refill the Treasury. This is seldom suggested in modern Washington. We have become so accustomed to debt, it seems, that the thought of maintaining a long-term surplus in Washington’s accounts is hardly ever mentioned.
Reduce public debt. This is part of various proposals, and is a major goal of many American voters (including independents, who determine presidential elections).
Temper and control the arrogance of officialdom. This is seldom discussed, but it is a significant reality in modern America. We have become a society easily swayed by celebrity, and this is bad for freedom.
Curtail foreign aid. The official line is that the experts, those who “understand these things,” know why we must continue and even expand foreign aid, and that those who oppose this are uneducated and don’t understand the realities of the situation. The reality, however, is that the citizenry does understand that we can’t spend more than we have. Period. The experts would do well to figure this out.

The question boils down to this: Is the future of America a future of freedom or a future of big government? Our generation must choose.

The challenge so far is that the American voter wants less expensive government but also big-spending government programs. Specifically, we want government to stop spending for programs which benefit other people, but to keep spending for programs that benefit us directly.[ii] We want taxes left the same or decreased for us, but raised on others. We want small business to create more jobs, but we want small businesspeople to pay higher taxes (we don’t want to admit that by paying higher taxes they’ll naturally need to reduce the number of jobs they offer).

The modern American citizen wants the government programs “Rome” can offer, but we want someone else to pay for it. We elect leaders who promise smaller government, and then vote against them when they threaten a government program we enjoy.

Over time, however, we are realizing that we can’t have it both ways. We are coming to grips with the reality that to get our nation back on track we’ll need to allow real cuts that hurt. The future of America depends on how well we stick to our growing understanding that our government must live within its means.

[i] Discussed in Gary Shapiro, The Comeback: How Innovation Will Restore The American Dream.

[ii] See Meet the Press, April 24, 2011.

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Oliver DeMille is a co-founder of the Center for Social Leadership, and a co-creator of Thomas Jefferson Education.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

Category : Blog &Citizenship &Culture &Economics &Education &Foreign Affairs &Generations &Government &History