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Entrepreneurship

Quantity. Quality. Method.

April 12th, 2011 // 6:45 am @

How much?

How well?

How?

These three aspects of success in any endeavor can teach us a lot about government, freedom and prosperity. Most importantly, they can teach us about government for freedom—since most governments in history have had different goals than liberty.

Good government—which maintains freedom and opportunity for all citizens—must meet the tests of quantity, quality and method. We naturally use all three in governmental analysis, often without noticing it. For example, terms such as democracy, aristocracy and monarchy emphasize the quantity of leaders—many, few or one. In contrast, we emphasize the method of governance in terms like communist, capitalist, commercial, and limited governments—these all describe the process which drives their respective societies. Words such as oligarchy, confederation, socialist, mercantile, militarist, federal, national and empire deal with the qualities of a nation’s governance, the attributes that make it what it is.

Quality, quantity and method are different ways to analyze any governmental institution, power, program or proposal. All three are important. Before we tackle how this applies to government, let’s learn a little about these three perspectives using a few examples. In the Great Books, for example, the discussion of quality centers on primary versus secondary qualities: attributes that cannot be separated from a thing are primary qualities, while attributes that can be changed without changing the thing—like color, taste, number or temperature, etc.—are secondary.

As for quantity, a big debate through written history has been the question of why mathematics doesn’t directly apply to the real world. Engineers, inventors and others who use math in the real world have to calculate for various non-mathematical realities in order to apply math to real things. This has caused many arguments among the great thinkers, from Aristotle to Buckminster Fuller. Newton invented calculus in order to bridge the gap between the mathematical and physical universes.

Perhaps the most interesting point about all this is that the discussion of method, as opposed to quality and quantity, runs through the Great Books and great conversation of history at nearly every turn. Almost every topic covered by the great thinkers and leaders from ancient, medieval and early modern (1800s) times deals extensively with competing ideas of method. Amazingly, this significantly slows in modern times, especially after 1900. Somehow the general acceptance of scientific experts as the true authorities on almost everything caused, or at least coincided with, a reduction of the common people asking questions about method.

Consider some examples that most moderns have experienced. Let’s say you decide to lose weight or get in shape. One diet approach, the most frequent in the United States, is to focus on “how much” food you eat. The formula is simple: Cut Calories + Exercise More = Lose Weight. This view attempts to change your body by decreasing how much food you eat and increasing the amount of exercise you get. Quantity is the focus.

Another viewpoint emphasizes the quality of what you eat (e.g. no sweets or fats, more raw vegetables, fewer carbohydrates, etc.). This perspective holds that if you eat the right kinds of foods and cut out the “bad” foods you’ll get your desired result. Likewise, it suggests effective exercise, like certain weight-training routines, interval cardio workouts, or changing your exercise to keep your body constantly adapting. The emphasis here is on “how well” you eat or exercise rather than how much.

A combined perspective emphasizes both how much and how well you eat, exercise, study, sell or whatever you are trying to do. Most modern “how to” literature combines these, and there are many thousands of management, sales, health and other books and programs in many fields of life.

Only a few programs exist from the third perspective: method. This viewpoint cares less about “how much” or “how well” than about “how”. For example, it might recommend eating whatever you want, as much as you want, but chewing each bite 20 times and fully enjoying each mouthful. The fact that those who do this tend to eat a lot less (you get full with less food) and better food (when you really taste them, many junk foods lose their appeal), isn’t the point. The focus is on process or method. Again, this is less common than the quality and quantity approaches.

Another example is provided by college sports. One team might focus on getting the most fans (quantity), and consider this the measure of a successful sports program. More fans often means more money for the school, more donations, better community relations, and so on. Another school might emphasize getting the best, most talented, coaches and players (quality). A third might focus on the process of great practices, training, conditioning and preparation—trusting that doing the right things will bring the desired outcomes (method).

The most successful programs—like the most effective sales techniques, educational systems, and governments, etc.—will encourage all three: quantity, quality and method. If a team becomes the best recruiter in the nation but puts very little work into conditioning or practice, it will likely not win very often. On the other extreme, teams which ignore recruiting probably won’t flourish either. All three perspectives are needed.

Two more quick examples: Imagine a school or church which focuses only on numbers without regard to knowledge or truth, or exclusively on truth while refusing to share it with anyone. Few modern institutions seem to focus on greatness—on the methods and processes of, say, being a great student, a great teacher, or a great believer. The scientific method lends itself to experts, and it seems that in the wake of accepting this reality our society has decided to leave most issues of method to the specialists.

There are many examples of all three perspectives in business, science, art and beyond, and method remains a small minority in most fields. Quality and quantity rule the day. As stated above, this is the opposite of nearly all recorded history.

Let’s consider how these concepts apply to government. One way to measure the effectiveness of a government is how big or small it is (quantity). If it is too small, it is naturally weak, and it if it is too big it is naturally tyrannical—so argue the authors of The Federalist. A second viewpoint asks how “good” our leaders are, or how “effective” a government program is (quality). Both of these are legitimate ways to analyze our government.

A third perspective is to analyze government by process (method). For example, does it have a written constitution? Does this constitution separate the legislative, executive and judicial powers in a way that all three are independent, generally equal with each other in power, and effectively checked and balanced? Does this constitution separate (or fit into a separation of) national, provincial and more local governments—with most sovereign powers left to the lower governments and the people? Was this constitution ratified by the people? Do the regular people deeply understand this constitution today? Does the government always follow the constitution?

Any nation that does not follow these methods will not long maintain widespread freedom or prosperity. Free citizens who expect to remain free must carefully analyze and lead their government utilizing all three of these perspectives.
Unfortunately, nearly all current discussion of government centers around one thing—debates about the quality of our elected leaders and the effectiveness (or not) of various government programs. The quantity and method questions are seldom mentioned by anyone.

There are many examples of how this drastically impacts our freedom and prosperity. Consider taxes. Following the modern trend, most current debate about taxes centers on quantity (e.g. How much is too much?, How can government tax the people more?, or, Don’t we need to raise taxes to pay down our deficit?) or quality (e.g. Should we tax the wealthy or everyone equally?, or, Are income, sales or other kinds of taxes best?).

In contrast, the American founding generation used a method approach to taxes: Many kinds (quality) and levels (quantity) of taxes were constitutional, but the federal government could only assess taxes from the state governments—never from individuals or households. When we changed the method, we saw the rise of government that is too big, too inefficient and increasingly out of control.

This same argument (that we are mostly ignoring the method approach to government and that all three approaches are important) can be applied to many of our most pressing current issues, from education or health care to energy policy, immigration, fiscal and monetary decisions, the national debt and deficits, etc.

Quality government matters, certainly, but the quantity and method questions (especially method) are ultimately more important to the freedom and prosperity of the people. If the regular people want to remain free, they must understand and act on this.

***********************************

odemille 133x195 custom Egypt, Freedom, & the Cycles of HistoryOliver 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 : Aristocracy &Blog &Citizenship &Constitution &Culture &Economics &Education &Entrepreneurship &Government &Politics

Ten Important Trends

March 16th, 2011 // 10:42 am @

The obvious big trend right now is that oil prices threaten to reverse economic recovery across the globe.[i] The recent problems with nuclear power in Japan only promise to exacerbate the oil crisis. And the concern about a second mortgage bubble lingers.[ii] Food and other retail prices are increasing at alarming levels while unemployment rates remain high. In addition, some trends and current affairs promise to significantly influence the years ahead despite receiving little coverage in the nightly news. Here are ten such trends that every American should know about:

  1. “In the wake of the financial crisis, the United States is no longer the leader of the global economy, and no other nation has the political and economic leverage to replace it.”[iii] Increased international conflicts are ahead.
  2. The new e-media is revolutionizing communication and fueling actual revolutions from the Middle East to North Korea.[iv]
  3. The new media is also differentiated by both political views and class divisions,[v] meaning that people of different views hardly ever listen to each other. This is creating more divisiveness in society.
  4. In response to the rise of the Tea Parties, some top leaders of American foreign policy feel that Washington must find ways to promote a “liberal and cosmopolitan world order” and simultaneously “find some way to satisfy their angry domestic constituencies…”[vi] The disconnect between the American citizenry and elites continues to increase. So does the wage disparity between American elites and everyone else.[vii]
  5. The evidence suggests that “teams, not individuals, are the leading force behind entrepreneurial startups.”[viii] This has been a topic of debate for some time, and a new book (The Invention of Enterprise by Landes, Mokyr and Baumol[ix]) outlines the history of entrepreneurship from ancient to modern times.
  6. As Leah Farrall put it, “Al Qaeda is stronger today than when it carried out the 9/11 attacks. Accounts that contend that it is on the decline treat the central al Qaeda organization separately from its subsidiaries and overlooks its success in expanding its power and influence through them.”[x]
  7. One trend is outlined clearly by a new book title: Alone Together: Why We Expect More From Technology and Less From Each Other.[xi]
  8. In contrast to popular wisdom, democracy and modernization are significantly increasing the influence of religion in many developing regions around the world.[xii]
  9. More people are using Facebook to connect more with their children—in one survey this included 64% of those surveyed.[xiii]
  10. While governments—at national, provincial/state and local levels—are increasingly strapped for cash and struggling to balance budgets and service looming debts, many multinational corporations “sit on enormous stockpiles of cash…”[xiv] This reality is giving strength to the argument in some circles that the future of governance should be put in the hands of corporations rather than outdated dependence on inefficient government.[xv]

[i] “The 2011 oil shock,” The Economist, March 5th, 2011.

[ii] Consider the ideas in “Bricks and slaughter,” The Economist, March 5th, 2011.

[iii] Ian Bremmer and Nouriel Roubini, “A G-Zero World,” Foreign Affairs, March/April 2011.

[iv] See James Fallows, “Learning to Love the New Media” and Robert S. Boynton, “North Korea’s Digital Underground,” The Atlantic, April 201.

[v] Op. cit., Fallows.

[vi] See Walter Russell Mead, “The Tea Party and American Foreign Policy,” Foreign Affairs, March/April 2011.

[vii] See “Gaponomics,” The Economist, March 12th, 2011.

[viii] See Martin Ruef, The Entrepreneurial Group, 2011, Kauffman.

[ix] 2011, Kauffman.

[x] Leah Farrall, “How al Qaeda Works,” Foreign Affairs, March/April 2011.

[xi] By Sherry Turkle, 2011, Basic Books.

[xii] See book reviews, Foreign Affairs, March/April 2011.

[xiii] Redbook, April 2011.

[xiv] See op. cit., Bremmer and Roubini.

[xv] See the following: Shell Scenarios; “Tata sauce,” The Economist, March 5th, 2011; Adam Segal, Advantage: How American Innovation Can Overcome the Asian Challenge, 2011, Council on Foreign Relations; and “Home truths,” The Economist, March 5th, 2011.

Category : Blog &Current Events &Economics &Entrepreneurship &Family &Foreign Affairs &Government &Independents &Information Age &Politics &Science

Why are We Still in Recession?

February 10th, 2011 // 4:39 pm @

Why was it that scientists were so excited to discover facts that farmers had known for generations and generations?” —Brandon Sanderson, The Way of Kings

The Wisdom of Crowds or Crowns?

There is a technical definition of economic “recession,” but many Americans don’t know exactly what it is. Nor do they accept the experts’ assurances that the Great Recession is really over.

Indeed, in the view of many, it was the experts who led us into recession while predicting something else.

The same experts promised that stimulus would fix things, and now they continue to confidently promise and predict as if their record should somehow bolter our trust.

In many ways, America’s elites consider regular Americans uninformed and ignorant. But there is another kind of wisdom, not based on expertise and therefore seldom understood by the elite class (most of whom were convinced some time before or during college that erudition is a matter of credentials, titles and peer consensus).

The “other” wisdom is based on an innate or experiential understanding of principles, of knowing things like these: Increased government size and spending is out of control; and like the housing bubble, the big-government bubble will have to burst at some point.

In the governmental model as erected by the American Founders, the wisdom of the masses is a critical and even central feature of republican government.

The American founders so trusted this type of wisdom above that of experts that they put the regular citizens in charge of elections and our direct representatives in charge of the nation’s purse strings.

They also gave the federal government only 20 specific powers and left the rest to the states and people.

Many, especially the upper classes of Europe, argued that such an arrangement could not succeed, that nations must be led by elites and their specialized agents.

History proved the Founders correct in this debate.

A Second Type of Recession

There is also another kind of “recession” not defined by economists but very real nonetheless — a recession where most people feel deep and overwhelming economic anxiety, where few families have as much money now as three years ago but more expenses, and where the majority feels deep down that things will get worse before they get better.

This kind of recession doesn’t move charts or graphs, but it does operate on a real logic: When the experts are wrong over and over, stop following them.

It should be noted that the people who use this type of reasoning generally have great respect for expertise and the experts, but not a blind faith.

Such wisdom holds that if individuals, households and businesses must tighten their belts, live within their means, and rise to a more self-reliant and entrepreneurial approach now that times are hard, the government needs to do the same.

If Washington refuses such common sense, it is deluding itself — and forcing us to pay the bill.

This “other” wisdom realizes that we have lived beyond our means for some time, and that we can only really build a new model if the old system is deeply changed.

The far Right and far Left argue that such progress can only come from the ashes or ruins of our broken system “after it falls,” while more moderate voices believe that a few fundamental shifts in worldview and policy can get us back on track.

We can move from nanny state to free enterprise, according to this view, from big government to smaller and more effective government, from a nation of dependents to a nation of innovators.

Such arguments sometimes sound untrained and unsophisticated to elite ears, partly because the privileged class wants America to look good to the European eye — but mainly because these type of arguments are often untrained and unsophisticated.

But we should not make the mistake of considering them naïve or ineffectual.

Sometimes the simple solution is best — especially when one of the most daunting problems is how complex our government and economy have become.

Expecting any single expert or government official to have a full grasp of it all is truly unrealistic, and depending on large teams of specialized experts doesn’t work without leadership from those who grasp the entire reality and envision something better.

Citizen Leadership

Grassroots wisdom from the people as a mass accomplishes this more effectively than any party, politician or intellectual class. This is the linchpin of freedom. The citizens must truly lead, or freedom does not last.

In times of crisis, wisdom is more important than expertise. Both are essential, but wisdom is most vital.

The American people, however uninformed they may appear to elite tastes, have wisdom in spades. They make mistakes, as Jefferson and later Tocqueville put it, but they always correct them.

In the governmental model as erected by the American Founders, the wisdom of the masses is a critical and even central feature of republican government.

One central reality stands out right now: People are struggling a lot more than the experts admit or the numbers show.

The economy may be in a slow recovery, but the American people are stuck in recession. And they know it.

Families and communities are experiencing more hurt than gets reported, and many people feel that things are getting worse. The middle-class standard of living is collapsing, and the worst of the housing bubble appears to still be ahead. Moreover, the government bubble is real and eventually it will burst.

Unemployment is worse than the numbers show. For example, many of the job losses are in middle- and high-paying jobs while most new jobs are low-paying. With the real unemployment rate (which includes those who have given up even trying to find a job) over 12 percent and the underemployed rate above 18 percent, we are more than halfway to a depression (traditionally defined by 25 percent unemployment).

Yet our leaders spend, borrow, and spend. The Chinese have continued to lend us more, as we figuratively hung ourselves and our posterity with an unyielding cord of debt.

Washington regulates more roadblocks to business growth, and tells us that 10 percent unemployment is the new normal. Then politicians pile on more regulations that hinder global investment in the U.S. and send it to friendlier markets.

American firms go abroad and find lower taxes, reduced regulatory environments, and more plentiful capital.

As unemployment lingers in the wake of these policies, we are assured that more government programs will care for those without jobs.

Most Americans find this more alarming than comforting. Consumers don’t spend. Businesses close. A drive down Main Street, Anywhere, USA is a museum tour of boarded-up windows.

We elect one party’s leaders with high hopes, then we try the other party—back and forth, without lasting success. Things worsen. Inflation may follow, as the Fed prints more money and further devalues our currency.

Many Americans feel the afterglow right after a major election, but the anxiety returns when the bills keep coming and they try to balance their checkbooks and plan for the years ahead. Call this recovery if you want, but the American people aren’t convinced.

Next Steps

The good news is that when pushed the American people take note and take a stand. The great American entrepreneurial spirit is rising, and it is our only real hope.

Elections come and go, but cultivating the values and skills of free enterprise in ourselves and others builds for the long term. It creates a solid foundation that works.

The election of 2010 is over, and the elections of 2012, 2014, 2016 and beyond will not have near as much impact on America’s future as the entrepreneurial spirit (or the lack of it) among the mass of regular citizens.

To the extent that elections help free the economy for growth, they can greatly benefit our prosperity and freedom.

But ultimately America’s success and affluence will depend upon the initiative, innovation, creativity, tenacity, resiliency, ingenuity, enterprise and entrepreneurial spirit of the regular people.

This is the true wisdom of crowds, and only the regular people can make this happen.

China may rise in prominence and even to superpower status in the decades ahead. If so, it will do so by applying these very entrepreneurial traits. The same is true of India, Brazil, Europe, other places, and the United States.

Our future depends on the rise of these entrepreneurial values and characteristics. The adoption of these will signal a true economic Recovery and put a real end to the Great Recession.

Whatever the politicians, parties and experts say, the world of 2020, 2030 and 2040 will be a world of our making, and the nations which rise in prosperity, freedom and power will be those where the entrepreneurial spirit flourishes.

With this in mind, I am convinced of at least two things: Our future is bright, and there is a lot of work ahead for all of us.

***********************************

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 : Business &Economics &Entrepreneurship &Featured &Government

The Declining American Dream

January 31st, 2011 // 9:55 am @

We still hear about the American Dream. But more and more it seems we’re in a Matrix-like dream state where our perceptions are being manipulated. It’s actually a pretty common plot in cinema: The Minority Report, The Sixth Day, Total Recall, Inception, The Adjustment Bureau and others riff on this theme. We’re living in a reality out-of-synch with some truth we’ve lost, and we don’t even realize it. Somehow our collective memory and our assumptions of “normal” are slowly morphing, and our definition of the American Dream at present is so far removed from the original concept as to be a pretty fair Doublespeak[i] idiom.

Back when the Cleavers[ii] and even the Bradys[iii] were the icons of American families, what was the definition of “The American Dream”? What did it mean to be “middle class”? There are some features of it that were fairly well accepted once upon a time:

1. Home Ownership I

Perhaps the most traditional measure of middle class and the American Dream is the ability for every man to be the king of his own castle. In this the U.S. was a beacon to the world, and other countries even began to adopt the value that every person might aspire to own his own dwelling. The historical and sociological significance of home ownership includes the moral and political empowerment of being “landed,” and affiliation with the natural aristocracy. Homeowners were believed to have a deeper sense of responsibility to invest in their property improvement, an elevated pride in and loyalty to their neighborhoods and communities, and a higher commitment to the good of society in general.

2. Home Ownership II

Now we have to dig a little deeper into our genetic memory. Home ownership a generation or three ago meant not only that you weren’t renting from somebody else, but after a maximum of thirty years in your home you weren’t renting it from the bank, either. A 30-year mortgage left the likes of Ward and June Cleaver without a house payment right about when the grandkids started showing up, and they were able to be a boon to their young married children as they were starting out. If the idea of Home Ownership I as a definition of “The American Dream” is still generally accepted (and I believe it is), the Home Ownership II definition has been deleted from our collective memory. Not only do we have a 30-year mortgage that gets refinanced ad infinitum, but we have seconds on our vanishing equity—and our seniors are living on the funds derived from reverse mortgages.

3. One Income

For the Cleavers and the Bradys, Home Ownership I and II were accomplished on one income. Dad had evenings and weekends for leisure; mom could volunteer with the PTA and community service organizations. Both could participate in book clubs, bowling leagues, gardening and other vocations. The Women’s Lib movement sent the modern woman into the workforce by choice; now Home Ownership II is entirely out of reach for the middle class, and Home Ownership I requires a minimum of two incomes—and often multiple jobs for an individual worker—in order to be a reality.

4. Two Cars

The family had a car—and later two. They were American made with pride, and they were built to last. Paid with cash from savings, or with a little help from the local bank, they were paid off long before they were sent to the salvage yard. Some families even scandalized the neighbors by giving each of their teens a car as soon as they were legal to drive.

5. College for Kids

Part of the understanding for middle class families was that they would be able to pay for their kids to get a college education. Now all that’s left of that understanding is the guilt for failing to live up to it. No one seriously expects one-income families to be able to pay off the house and cars and simultaneously send several kids to the University. Scholarships, loans, grants and lingering debt into the career years are now the means for those who want a college education.

6. Discretionary Income

With all of the above, it was still an expectation that a married couple could live within their means and have savings, investment, yearly vacations with the whole family at some destination spot, and still have a few dimes to rub together at the end of the month.

7. Retirement

Ah, and after all this came the golden years. The Cleavers could now spend their expanded leisure time, afforded by an empty nest and the retirement from the company (complete with gold watch honors), in community service and nurturing the rising generation. They had savings, investments and retirement income to fall back on, a house and car paid free and clear, and the greatest resource: Leisure Time. They were elders in their community, and relied upon for wisdom.

The percentage of families enjoying these luxuries shrinks every year. Where did our American Dream go? Somehow, point by point, it has slipped away from us, and taken with it our definition of “middle class.” Would that we could wake up and reclaim the best of that dream; instead, we’ve awakened to a reality where our elusive American Dream is just out of reach; and these seven points that were once considered the legacy of any hard-working family are being deleted from our list of aspirations. If they are middle class expectations, the majority of America is no longer middle class.

[For a follow-up article on the how and why the middle class is shrinking, and how to reverse the trend, read Oliver’s article, “The Rule of Leisure,” featured in the February 2011 monthly newsletter for The Center for Social Leadership.


[i] See Orwell, Nineteen Eighty-four.
[ii] From the 1950 – 60s classic sitcom about the traditional nuclear family of Ward and June Cleaver, “Leave it to Beaver”.
[iii] From the classic 1970s sitcom about the non-traditional nuclear family of Mike and Carol Brady, “The Brady Bunch”.

Category : Blog &Community &Culture &Economics &Entrepreneurship &Family &Generations &Politics &Postmodernism &Producers &Prosperity

Building With Kryptonite: Small Business “Bailout” and the Future of the American Economy

January 3rd, 2011 // 4:00 am @

When recessions make things difficult for a lot of people across the nation — especially when accompanied by high unemployment — many turn against markets and seek government solutions to economic challenges.

This is both predictable and understandable.

But one group typically responds in a different way that is surprising to most modern Americans: Many small business leaders and entrepreneurs, instead of seeking government bailouts, turn instead to ingenuity, innovation and flexibility.

Small business people believe in the free market. They believe that when things change in the economy they need to change the way they are doing business to deal with the new realities.

They also believe in free enterprise: the idea that their work, resourcefulness and risk can turn any challenge into a positive.

As one report pointed out, General Electric, Hewlett and Packard, Microsoft and CNN all started (or were brand new and really got going) during recessions.

Small business people have gotten us out of nearly all modern recessions — not by waiting for others to fix things or turning to government, but rather by applying leadership, inventiveness, creativity and originality. They look around, assess the situation and the needs, and put themselves (and others) to work.

Those with little experience running businesses, establishing start-ups or meeting payrolls often think that what small business needs is easier financing terms, government credits or bonuses.

The truth is that what they really need is less government regulation to deal with and lower taxes on their profits (which makes the risk worth the effort).

So why did the Bush and Obama administrations try to boost small businesses by making credit more available but increasing regulations and (in the Obama era) seeking to raise taxes?

“Thanks,” many small businesspeople are saying, “but no thanks. Forget the government credits and loan programs, and just get rid of all the bureaucratic red tape and high taxes which make it hard to build businesses, hire employees and meet our payroll.”

The Problem With Washington

Small businesses need consumers to buy their products, and that means stability from the government — not an on-going agenda of governmental change, change, and more change that creates increasing uncertainty and kills investment and consumer confidence.

They also need investment. As Nobel Laureate in economics Joseph Stiglitz said, there is a lot of investment money globally right now, but as investors are asking where is the best place to invest, the primary answer is “not in the United States.”

The on-going stimulus programs and other over-use of government interventions in the U.S. economy are driving away capital.

Experts say the housing crash hasn’t hit bottom yet and the unemployment rate will increase. The real unemployment rate is actually over 12 percent.

Government intervention is not solving the problems, and in fact the governments around the world that are intervening the most in their economies are struggling more.

It may be argued that these countries obviously have a greater need for remediation; but it must also be acknowledged that government has been the go-to in the U.S., and its sound-bite friendly solutions have been conspicuously shy of either restraint or principle.

When the crisis hit, most experts agree that government intervention helped stabilize falling markets. We are all glad things didn’t get even worse.

Thank goodness for President Obama’s leadership aura at the end of 2008 and the first few months of 2009. We may well have been headed for a depression but for the positive sense of leadership he brought to the nation. It was short lived, it is true, but it helped when we needed it.

The McCain team at that point simply did not have the national support to lead us through that challenge. We needed a president-elect and new president with “the leadership thing,” and Obama had it. I think this is why so many independents supported the Obama campaign in 2008 election.

Now, however, we have now reached a point where, as Treasury Secretary Timothy Geitner said, we need business to lead out in healing our economy.

The best thing government can do now is get out of the way and let small businesses innovate, hire and grow. Unfortunately, this is unlikely to happen unless Washington stops increasing regulations, taxes and other blocks to business growth.

The recent growth of government spending has been drastic, and it creates a drag on growth in the private sector.

For example, Reagan increased government spending by 2.6 percent, the first Bush by 1.8 percent, and Clinton by 1.5 percent.

But since 2000 we have increased spending with Bush at 4.7 percent and the Obama Administration at a whopping 12.7 percent (actually 22.5 percent if you include money approved under Bush but spent under Obama!).

In 2006 and 2008 independent voters swept Republicans out of office as a response to high government spending and a loss of trust in the decisions of the White House. Republican leaders now concede that they “got fired” by independents largely because of overspending.

Now independents are deeply frustrated that Democratic leaders have spent even more. Not surprisingly, given the unpopularity among independents and moderates of massive government spending, Americans now rate Barack Obama and George Bush almost equally — a major change from one year earlier where Obama had a 23 percent lead over Bush.

Only 20 percent of Americans are now pleased with Washington; 80 percent of Americans are disappointed or upset with Washington. Time magazine recently ran a cover report on conversations with Americans across the country.

The reporter Joe Klein noted that “There was a unanimous sense that Washington was broken beyond repair.”

This is not surprising in a nation where every baby born today “owes” the federal government over $43,000 to pay off the debt. For the first time in generations, many [some would say most] Americans are concerned that their children will inherit a worse nation and economy than they did.

The Solution Class

With all this government spending and constantly increasing regulations on business, it wouldn’t be surprising to see entrepreneurs and small business simply giving up; no doubt many do.

Most big venture capital is going abroad to places like Brazil, Israel, India, Britain, etc. All of these places are cutting government spending in order to incentivize small business growth.

Even France, Germany and Sweden are following this strategy. Indeed, France’s financial minister said on October 10, 2010 that unless nations reduce public deficits through reduced government spending, consumers will buy less and producers will produce less.

Nations, including France, who are following this policy are now seeing unemployment rates decrease. And when such a central-control powerhouse as France has an admonishment for us on this point, we ought to take notice.

At the same time that our growth money is going abroad, the U.S. government is increasing its debt to other nations.

For example, China holds 11 percent of our Treasury debt, Japan 9.5 percent, OPEC nations 3.5 percent, Brazil 2 percent, Russia 1.4 percent, there are significant holdings by North American and European lenders, and domestic lenders carry about 52 percent of the government’s debt.

Imagine what would happen to our economy if the government defaulted — and it does happen. In fact, the cost to insure our debt against default has risen 30 percent since August — just two months ago.

In short, the government owes too much to too many, but instead of incentivizing business growth in America it is attacking the very ones who are trying to fix things — small business.

Still, the American entrepreneurial class is fighting to overcome any and all challenges — even those posed by their own government.

Ken Kurson wrote:

“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.”

In order to overcome the downturn and slow growth, entrepreneurs are asking what will sell in this economy and going to work providing it.

If past business strategies won’t work in the new reality, they are changing their businesses and seeking what actually will succeed. They see the economic meltdown and its aftermath as an opportunity, not a crisis. Instead of whining about what they’ve lost or asking for more government help, they are tightening their belts and getting to work.

Our New Super Heroes?

But, amazingly, Washington seems determined to make it harder for the very small businesspeople who are most effectively taking on our national economic problems.

Government is rewarding those who are currently the least productive while making it more difficult for those who are actively fixing the problems.

Democrats want to raise taxes in order to avoid cutting hyper-regulatory government problems (and because regulating business is popular in this anti-Wall Street environment), while the Republicans are allowing the tax hikes in the name of facing off with the Democrats.

Democrats claim that only by raising taxes on the top 2 percent of earners can we balance budgets. But “…75 percent of the families that would be affected by this tax hike are making between $250,000 and $500,000 a year…A lot of these people are small business owners, and that would hurt job creation.”

By increasing taxes on the very group that creates nearly all growth in America — small business owners — we guarantee that unemployment will tend to rise. And as the two major parties fight in Washington, taxes are now set to increase for everyone.

Some say that a tax increase is required to pay down debts and balance budgets, but in a down economy the real solution is to leave taxes as they are and cut unnecessary government spending. Neither party seems willing to do this, despite paying lots of lip service to the idea.

And month after month, increased regulations from Washington make business growth, hiring and increased economic success more difficult for small businesses.

In the parlance of the Comic-Con generation, it’s like the government trying to shut down Superman when he is protecting us from the end of the world. It makes absolutely no sense.

This is the crisis! Difficulty getting credit, slow growth, high unemployment, low consumer confidence—these are challenges entrepreneurs can overcome with hard work, smart risk and tenacious teamwork. This is precisely what entrepreneurs do!

But in addition to these major difficulties, Washington is now requiring small businesspeople to fight the government too! Why? In what evil parallel universe does building with kryptonite make any sense?

It’s time for a true small business bailout — a drastic reduction in costly red tape and an easing up on the tax rates for those who pull success out of seemingly impossible circumstances.

We need Superman, and entrepreneurs are up to the task. If only the two major parties in Washington would get out of the way.

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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.

 

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