Current Events

The Amazing (Ironic/Tragic) Debate

November 19th, 2011 // 2:15 pm @ Oliver DeMille

There is a truly amazing debate happening right now in the United States. It would actually be comical if it weren’t so potentially tragic for America’s future. This debate is not any—or all—of the Republican Presidential Debates. Nor is it some formal debate taking place on television, the Internet or a university campus.

It is a cultural debate, a large-scale argument playing out in millions of discussions online, thousands of opinions and rants from the talking heads in the media, and – most dramatically – fought indirectly between the Tea Partiers and the Occupy Wall Street crowds.

Most of this debate is taking place in emotional and passionately charged ways, rather than in clear, concise intellectual dialog. Still, a quick look at the two intellectual arguments is instructive.

Some say that the divide between the rich and the rest is increasing each year. More to the point, the structural division between the upper classes and the other classes is becoming less porous and less elastic. Social mobility—which was once the American keynote—is steadily eroding.

A majority of Americans now feel that their children will have a lower standard of living than they did; many feel that the rising generation in China will have more opportunity than our American youth. The American Dream is over in this view, and things seem likely to get worse before they get better—if they ever get better.

I wrote about this reality a few years ago in my book The Coming Aristocracy, and it remains one of the most significant challenges of our time. It is presently a major catalyst of current trends and of our evolving future. Unless things change direction, an aristocracy is coming to America. Indeed, it is already almost entrenched.

In a typical debate, the opposing view would argue that such a divide is not occurring, or that it is a good thing for America – or even that it is a minor trend that will be offset by some larger reality. But this is no typical debate. In an interesting twist, all sides of the current amazing debate accept this truth—the divide between the rich and the rest is real, and it is a major challenge in our century.

The debate is about how to fix this problem.

One side of the debate wants government to solve the problems, the other side wants government to get out of the way so the people can resolve things. It’s More Government against More Free Enterprise.

The More Government side argues for higher taxes, more government relief, increased government spending, more government jobs programs, increased government training options, improved government education, and more regulations. It is summed up in the title of Thomas Frank’s recent article in Harpers: “More Government, Please!”

In contrast, the More Free Enterprise side promotes fewer government regulations, reduced or at least no hikes in taxation, lower corporate rates to boost America’s competitiveness in the world economy in the, decreased government spending, less government borrowing and printing of money, and smaller government.

This side wants the era of big government to truly, finally, be over,[i] or, at the very least, for us to realize that our government must stop shutting down or undermining the free enterprise incentives that are the basis of all historical prosperity and freedom.

The More Government side tries to convince the nation that the Free Enterprise side “Hates Government,” or “Hates the Poor.” Too many on the Free Enterprise side characterize the ideas of the More  Government side as “Hating Freedom” or “Hating Small Business.” Both of these characterizations are flawed.

Many who argue mainly for government solutions also feel deeply the need for government to be checked and balanced, while many who support answers mainly by private enterprise feel great pride and trust in the potential for good by our government and consider its success vital to society. Most people on both sides care about freedom and also want to help the underprivileged and struggling. Most people on both sides want government and business to be successful. Most people from both sides want the government to be fiscally responsible. They just have an honest disagreement about the best way to do these things.

Some want to label one side of the debate Democratic and the other Republican, but this simply isn’t the case. Government spending, government programs, and the regulatory load increased drastically—drastically!—under the Republican administrations of Eisenhower, Nixon, Ford, Bush and Bush and also under the Democratic leadership F. Roosevelt, Johnson, Carter, Clinton and Obama. Note that these things also increased under Truman, Kennedy and Reagan, but at least these three presidents made a loud and energetic case for proper limits on government. In short, both political parties have proven effective supporters of the More Government side of the debate.

The one big difference, the most fundamental divide, between the More Government and More Free Enterprise sides is this: one believes we need more government force right now, the other that we need more freedom and incentives right now.

For this reason, I am on the side of free enterprise.

The government has a vital role to play in our society. Without it, none of our freedoms will last. But government power must be wisely limited, and the best articulation of the right level of limits on our government is found in the U.S. Constitution. More to the point, the government today may or may not be too big, but its massive regulatory load and anti-business policies are clearly hurting the economy and fueling an increased class divide in society. They are keeping our economy down because they don’t incentive economic innovation or growth.

The reason I call this debate “amazing” is simple: It is both surprising and indeed shocking that anyone who has read history can believe that force is a more effective way to freedom than free incentives. One side of this debate seems committed to using government force to fix our economic problems, even though all through history free economies, minimal regulation and limited governments have consistently been the forerunners and partners of economic success and high economic mobility.

It is simply amazing that we still haven’t figured this out. Perhaps the most astonishing thing about this debate is that anyone still argues that more government force in our current model will spread more freedom, prosperity, or social mobility. There is no historical evidence for this, and overwhelming evidence of the opposite.

Freedom works. Why is anyone arguing that we give more support to government force? If the Republican Presidential Debates, and the ongoing responses from the White House, are about real solutions, they will be all about the government effectively incentivizing free enterprise. If the Tea Party and Occupy Wall Street events are about real solutions, they’ll promote ways to more effectively incentive free enterprise.

As long as government force is the dominant factor in our economy, things are going to get worse. The Bush-Obama economic environment we live in combines stifling regulations with massive government spending and uncertainty about what Washington will do next. This dis-incentivizes growth, hiring, and investment in the U.S.; meanwhile, business moves to foreign economies with better incentives.

Unemployment lingers above 9%, and the real number when we include all who are underemployed is pushing 20%. The mortgage bubble may not have reached its lowest collapse, and inflation or deflation appear imminent. In response, the White House now recommends more government spending, regulations and programs.

This is a truly amazing debate. The more the government regulates and spends, the worse the economy fares. As a result, the government seeks to spend more. And a lot of the American people think this is a good idea.

Many Americans were shocked into political activism by the Great Recession, where the average household lost 3.2% of its income.[ii] Since the Great Recession ended, during the so-called Recovery, the average household has lost an additional 6.7%.[iii] Are we simply scared into submission? Are we crying out to the government to fix things, because we are deeply terrified that nobody else will? Is that why so many people believe that government force is more likely to boost our economy than free enterprise?

The amazing question remains: Given all of history, how can anyone take the Force side of the current great debate?

Seriously?

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

He is the co-author of 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 : Aristocracy &Blog &Current Events &Economics &Entrepreneurship &Generations &Government &Prosperity

Capitalism vs. Free Enterprise

October 10th, 2011 // 11:18 am @ Oliver DeMille

The New Culture War

During the Cold War, people came to equate the three ideas of democracy, capitalism and free enterprise.

This made sense at some level, since the whole world seemed inescapably divided into authoritarian, totalitarian, socialist and communist nations on the one hand and democratic, capitalistic and free enterprise nations on the other.

In the decades since the Berlin Wall fell, as CNN’s Fareed Zakaria has pointed out, there has been a growing divide between the nations emphasizing democracy and those focused on capitalism.

The differences between these two groups are both interesting and significant to world events.

But an even more nuanced and impactful division is the difference between capitalism and free enterprise.

I wrote about this in my book FreedomShift, but it is a point of great magnitude in our current society and bears repeating.

Unfortunately, very few people have considered the differences.

Most still equate capitalism and free enterprise, even in the post-Cold War era.

This is a weighty mistake with a high potential for negative ramifications in the 21^st Century.

A simple defining of terms points out the crucial importance of the distinction between these two brands of economics.

To summarize: capitalism gives special government-supported benefits to capital and those with capital (wealthy individuals, families and business entities).

This is the opposite of socialism, which promotes special government-supported benefits to those without capital—the proletariat, as Karl Marx put it.

In contrast to both capitalism and socialism, free enterprise establishes good laws and government policies that treat the rich, middle and poor the same.

Some people may believe that this is the system we live under in the United States today—that the law treats all the same.

Such an assumption is incorrect.

The U.S. commercial code has numerous laws which are written specifically to treat people differently based on their wealth.

For example, it is illegal for those with less than a certain amount of wealth to be offered many of the best investment opportunities.

Only those with a high net worth (the levels and amounts are set by law) are able to invest in such offerings.

This naturally benefits the wealthy to the detriment of wage earners.

This system is called capitalism, and it is a bad system—better than socialism or communism, to be sure, but not nearly as good as free enterprise.

In a free enterprise system, the law would allow all people to take part in any investments.

The law would be the same for all.

If this seems abstract, try starting a business in your local area.

In fact, start two.

Let the local zoning commissions, city council and other regulating agencies know that you are starting a business, that it will employ you and nine employees, and then keep track of what fees you must pay and how many hoops you must jump through.

Have your agent announce to the same agencies that a separate company, a big corporation, is bringing in a large enterprise that will employ 4,000 people (or, in a more urban setting, 24,000 people)—all of whom will pay taxes to the local area and bring growth and prestige.

Then simply sit back and watch how the two businesses are treated.

In most places in the United States, one will face an amazing amount of red tape, meetings, filings and obstacles—the other will likely be courted and given waivers, tax breaks, benefits and publicity.

Add up the cost to government of each, and two things will likely surprise you: 1) how much you will have to spend to set up a small business, and 2) how much the government will be willing to spend to court the large business.

Of course, I don’t really suggest that anyone announce such a fake business.

But imagine, theoretically, what would happen if you did.

Our current mentality in government is to treat big business better than small business.

This is the natural model in a capitalist system.

Capital gets special benefits.

In free enterprise, in contrast, the costs and obstacles would be identical for the two businesses.

In free enterprise, the operative words are “free” and “enterprise.”

Note that American business and ownership stayed mostly small—with most people owning family farms or small businesses—until the 1960s.

It was debt (often promoted by government) which wiped out the farming culture that dominated the South and Midwest, and the rise of big corporations over family-owned businesses came after the U.S. commercial code was changed by law to a capitalist rather than a free enterprise model.

If we altered today’s laws at all levels so that government entities treated all businesses and citizens the same, regardless of their level of capital, the natural result would be the spread of more small businesses.

Note that nearly all major growth in America’s economy since 1985 has come from small business.

Today, small businesses are struggling under a veritable “mountain” of regulatory red tape—the result is economic downturn.

And, while some in government hold an anti-business attitude, even many of those ostensibly promoting pro-business policies are more aligned with Wall Street corporations than the needs of small business.

Capitalism, sometimes called “Corporatism”, is not the same thing as free enterprise.

Both are certainly preferable to socialism or communism, but free enterprise is considerably more conducive to freedom and widespread prosperity than capitalism.

History has proven the following: 1) Under capitalism, the divide between rich and poor naturally increases; 2) In a free enterprise system, the prosperity, freedom and dignity of nearly everyone in the society inevitably rises.

Alexander Solzhenitsyn pointed out that while modern American capitalism was clearly better than Russia’s twentieth-century communism or Europe’s contemporary attempts at socialism, the U.S. implementation of capitalism left much to be desired.

For example, he noted, under American capitalism the question of, “is it right?” became less important to many people and companies than, “is it legal?”

Likewise, the culture of capitalism frequently asks, “is it profitable?” before (or instead of) asking, “is it good?”

American capitalism, Solzhenitsyn said, created a nation more materialistic than spiritual, more interested in superficial success than genuine human progress.

Note that Solzhenitsyn was adamantly anti-communist and anti-socialist.

But he also found capitalism lacking.

In every particular, however, Solzhenitsyn’s criticisms of capitalism don’t apply to the free enterprise model of economics. When the law treats all people and businesses the same—regardless of their size, connections, power or wealth—an interesting consequence occurs.

Put succinctly:

• In socialism the government ignores, downplays and literally abuses prosperity and freedom to the point that both are lost for nearly everyone.

• Under capitalism, the laws promote the wealth and license of a few above the freedom and prosperity of all, with the cultural result of valuing attainment of wealth above almost everything—including virtue, compassion, and the liberty of all.

• In free enterprise, the laws treat everyone the same, thereby incentivizing freedom, prosperity and enterprise (as long as such enterprise doesn’t violate the inalienable rights of others). The application of this model is rare in human history, but the results when it has been applied are nothing less than spectacular (see Ancient Israel, Athens, the vales period of Switzerland, the Saracens, the Anglo-Saxons, and the United States—which by 1944 had 6% of the world’s population and produced over half of its goods and services).

The lesson?

Freedom works.

Enterprise works.

And the outcome when the two are combined is breathtaking.

We are capable of so much more than we’ve accomplished so far, and free enterprise is the most powerful economic system yet to be tried by mankind.

Isn’t it time for an end to the outdated debate about socialism versus capitalism and a national return to the free enterprise system which made America great?

During its first century-and-a-half of application, free enterprise brought us major wealth, a standard of living for most citizens that rivals or surpasses the lifestyles of history’s royals, world power, major technological and medical advancements, and the end of slavery.

It also brought the repudiation of racism, male dominance, religious persecution and a host of other ills that have existed for millennia.

With all these areas of progress, imagine what we could do if we re-adopted the free enterprise values and culture in our time.

Laws that give special benefits to wealth and capital while withholding such opportunities from the rest can never bring the progress, advances, freedom and prosperity that free enterprise will.

It’s time for a change, and the first step is for all of us to start using the phrase “free enterprise” a lot more.

We need to study it, think about it, discuss and debate its various applications, and make it a household topic rather than an obscure economic reference.

The future of America is inextricably linked with the future of free enterprise.

We will sink or swim exactly as it does, whether we realize it or not.

Isn’t it time to admit this reality and make it the leading topic in our national dialogue?

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

He is the co-author of 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 : Business &Community &Culture &Current Events &Economics &Entrepreneurship &Featured &Government &History

A U.S. GRAND POLICY

October 10th, 2011 // 10:54 am @ Oliver DeMille

The Jobs Plan We Need

In the furor over the national debt, deficits, stimulus programs, the Obama Administration’s proposed jobs plan and the Republican responses, we are missing a simple reality.

America right now is in desperate need of a clear, simple, overarching Grand Policy.

The Grand Policy would look something like this:

• Every new proposal in government that in any way impacts business and/or the economy will be measured by its likelihood of incentivizing economic growth, increased investment, and higher levels of quality employment. Only proposals which effectively encourage these things will become law or policy. Period. No exceptions.

• That’s Phase I. Phase II is to comb through all regulations that were adopted during the last ten years that affect business or the economy and apply the same standard. Any laws and policies that don’t incentivize economic growth, increased investment and higher private-sector hiring will be revoked.

• Phase III will carefully analyze each of the cancelled policies and determine if any are validly good for the nation. Those that meet this test will be reconsidered by Congress.

Some might argue that such a re-evaluation of our economic and business policies would be unwieldy, costly and time-consuming.

But this line of reasoning actually supports the need for this Grand Policy.

The reason this re-evaluation would certainly be unwieldy, costly and time-consuming is that far too many regulations have been adopted during the past decade.

This fact is a major cause of our national economic problems.

To reiterate the point, implementing such a Grand Policy would definitely be unwieldy, costly and time-consuming, but not nearly as unwieldy, costly and time-consuming as leaving such policies in place and seeing increased economic downturn, continually high unemployment, lessened investment, and most likely an inflation problem in the near future.

As to the question of who will do this work, what could be a better use of Congress’s time than to reboot economic growth by encouraging investment, growth and the resulting jobs?

Until these things are addressed, do we really want Congress working on other things?

We’re going to pay their salaries and those of their staff anyway, so why not put them on productive projects like revitalizing the economy.

In short, we need a Grand Policy that incentivizes economic growth, increased investment and more private-sector hiring.

Every policy affecting business and the economy must encourage these things.

It really is that simple.

If government policy discourages growth, investment and hiring, the result is less growth, investment and hiring.

This is where we are right now.

America is at a fork in the road, so to speak. If we take the road that continues to de-incentivize growth, investment and hiring, we’ll get less growth, investment and hiring.

I apologize for using such repetitive and basic language, but for some reason Washington doesn’t seem to grasp this reality.

For example, increasing regulations and taxes on small businesses and small-business owners—America’s proven job creators—is going to discourage growth.

Obviously, the three phases listed above are too simplistic—there is more complexity to such a change than is outlined here.

But it’s a good place to start.

Whatever the intricacies and difficulties of change, we simply must take on a national project of incentivizing business growth, investment and private-sector hiring.

If not, our economic problems are just beginning.

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

He is the co-author of 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 : Business &Current Events &Economics &Featured &Government

Review of Don Peck’s “Can the Middle Class be Saved?”

August 29th, 2011 // 2:00 pm @ Oliver DeMille

This article in The Atlantic by Don Peck is a must-read for those who are interested in the future of American freedom and prosperity. Highlights from the article include:

• The United States is “now composed of two distinct groups: the rich and the rest. And for the purposes of investment decisions, the second group” doesn’t matter.
• The new name for this state of society, coined by three analysts at Citigroup, is “plutonomy.”
•  “A 2010 Pew study showed that the typical middle-class family had lost 23 percent of its wealth since the recession began, versus just 12 percent in the upper class.”
• The lifestyles of non-professional college graduates now more closely resemble those of high-school dropouts than of the professional class.
• The meritocracy is increasingly only a meritocracy of the upper classes.
• “Among the more pernicious aspects of the meritocracy is the equation of merit with test-taking success.”
• “For the most part, these same forces have been a boon, so far, to Americans who have a good education and exceptional creative talents or analytic skills.”
• Most Americans don’t want the middle class to disappear or continue to shrink, and such a development would certainly bring a drastic change to the people-based freedom that has characterized the historical successes of the United States.
• These trends, and the growing divide between the rich and the rest, are increasing the longer the economy remains sluggish.

Peck gives a number of suggestions for improving this situation, including:

• Increasing the funding for effective job training and education.
• “Removing bureaucratic obstacles to innovation is as important as pushing more public funds toward it.”
• Changing our public policy to accelerate innovation.
• Significantly improving our schools.
• Creating clear paths of training and skilled work for those who don’t go to college.
• Altering current immigration policy to allow more “creative, highly skilled immigrants” to come to the U.S. more easily.

Whether or not you agree with Peck’s recommendations, one reality is clear: The success of these things ultimately depends on incentivizing entrepreneurship, innovation, creativity and economic growth.

By spurring significant economic growth, we will directly and indirectly address most of our national economic problems.

On the other hand, if government policies continue to thwart major innovation and growth, little can be done.

Peck makes a case for higher taxes, but hardly mentions that Washington has a serious spending problem.

Democrats typically argue for tax hikes, while Republicans now mostly champion spending cuts.

Most Independents, in contrast, would likely support both—as long as the tax hikes on the professional class were used not to increase or maintain federal spending but rather to directly help put America’s financial house back in order.

Whatever your view on this debate, it is a discussion desperately needed right now.

Too much of the rhetoric on this topic is just that—two sides deeply entrenched and firmly committed to one view only.

We need fresh ideas and inspiring leadership to move beyond this gridlock.

With all this said, Peck’s article is mandatory reading. Every American should think about its main points.

Most will find things to disagree with, perhaps, but the dialogue is needed.

If the middle class is to survive and thrive, it must increase its role of deeply considering, thinking about and making its views felt on important economic and other national issues.

Freedom only works when involved citizens of all socio-economic levels actively participate in such important national discussions.

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

He is the co-author of 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 : Aristocracy &Book Reviews &Community &Culture &Current Events &Economics &Family &Featured &Statesmanship

The 5 P’s

August 26th, 2011 // 6:00 pm @ Oliver DeMille

The Criteria

Pollster Frank Luntz says that to be real contenders for the U.S. Presidency, candidates

must have what he calls “the three P’s”:

1-A credible Plan to lead the nation

2-The Political prowess to be elected in the general election

3-The fight to stand for the values of the Party base

Add to this a fourth and fifth P, and you have good criteria for measuring the candidates:

4-The reality that the swing voters in the 2012 election will most likely be, as George Will put it,  “independents in Northern cities” and Florida (most of whom are Professionals)

5-Comes across Positive to the voters

For example, President Obama has 2 and 3, but is weak on 1 and 4. Still, this puts him ahead of almost everyone else.

A clear, concise White House plan for America’s economic growth and a Positive approach to leadership could make him strong in 1, 5 and possibly even 4.

Expect his advisors to steer him in this direction in the months ahead.

The Contenders

According to recent polls:

• Paul is strong on 1, weak on the rest
• Romney is strong on 2 (and maybe 4), weak on the rest
• Huntsman is strong on 2 (and maybe 4), weak on the rest
• Bachman is strong on 3, weak on the rest
• Perry is strong on 3 (and potentially 2 and/or 4), weak on the rest
• Santorum is strong on 3, weak on the rest
• Cain is strong on 3, weak on the rest
• Palin is strong on 3, weak on the rest
• J. Bush is strong on 2-3, weak on 1 (though this could be remedied), and very weak on 4
• Giuliani is strong on 2 and 4, weak on 1 and 5, very weak on 3

There is, of course, a lot of time left before the election and things will likely change more than once.

For example, Romney could outline a strong national economic/jobs plan to counter the Obama jobs plan (if one is presented) and also work to become the voice of Positive in the election.

Perry would need to downplay the socially conservative issues (his Party base would vote for him anyway) and strongly emphasize his record on jobs (under his leadership Texas created over 1/3 of the new jobs in America during the recovery).

There is real potential for Perry to become stronger on 1, 2 and 4, Romney to become stronger on 1 and 4, or Huntsman or Bachman to gain strength on 1 and/or 4.

To win, Bachman would also have to become strong on 2 and Huntsman would have to become strong on 3.

Note that two potential candidates who haven’t joined the race yet are doing the best of all.

• Christy is strong on 1-4, weak on 5
• Ryan is strong on 1-3, might become strong on 4-5

Whether Christy or Ryan will run, and whether either would remain strong in the challenges of active campaigning, remains to be seen.

Ryan could probably become the voice of Positive and economic growth, while Christy would probably do best to push business-friendly economic policy and jobs as loud as possible.

Either could likely run on a strong economic platform with good results—the same is true of Perry, Romney, Huntsman and maybe Bachman.

What It All Comes Down To

If Luntz is correct (4 is really just a function of 2, and 5 doesn’t really matter to voters—despite what they say in the polls), the strongest positions right now belong to Obama, Christy, Ryan, Romney and Perry.

If it all comes down to 4, Christy or Ryan have a slight edge over Obama while Obama is ahead of Perry and Romney right now.

Still, there is a lot of campaigning yet to come, and some polls have both Romney and Perry ahead of Obama in head-to-head contests.

It is unclear exactly how this will all work out, but as we get closer to the election the savvy voter will do well to keep an eye on how each candidate measures up to these 5 criteria.

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

He is the co-author of 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 : Current Events &Featured &Government &Leadership &Politics