Politics

American Decline

November 3rd, 2011 // 3:00 pm @ Oliver DeMille

Is it Avoidable or Inevitable?

“We’re not going to bail our way out of this crisis, we’re not going to stimulate our way out of this crisis, we are only going to educate, ultimately, and imagine and invent our way out of this crisis.”
—Thomas L. Friedman, Meet the Press

“By 2020, the U.S. will be spending $1 trillion a year just to pay the interest on the national debt.
Sometime between now and then the catastrophe will come. It will come with amazing swiftness.”
—David Brooks, The New York Times

On the same week[i] the White House released its prediction that unemployment will get even worse every year in 2012, 2013 and 2014, Friedman and Mandlebaum’s book entitled That Used to Be Us focused the national dialogue on the deepening decline of the United States.

Fortunately, Freidman and Mandlebaum also outline a plan for how America can come back soon.

Harry S. Dent’s newest book, The Great Crash Ahead, further elaborates on this topic.

Friedman and Mandelbaum’s argument goes something like this: the United States is in serious trouble because of four great trends that are bringing massive change.

Our decline didn’t start with the housing crisis in 2008, but back in the late 1980s at the end of the Cold War.

Four Trends

First, according to Freidman,[ii]

“We made the worst mistake a country or species can make, at the end of the Cold War, when we misread our environment. We interpreted the end of the Cold War as victory…not understanding that it was actually the onset of one of the biggest challenges we’ve ever faced as a country.

“We had…unleashed two billion people just like us. But the nineties turned out to be quite a party thanks to the peace dividend, thanks to the massive productivity boost of the Internet and thanks, most importantly in many ways, to the collapse in oil prices, which was like a huge tax cut.”

Second,

“9/11 set us on a really bad course. We spent the last decade—in many ways necessarily, in many ways excessively—chasing the losers from globalization rather than the winners.

“And we made up for a lot of the fall behind…by basically injecting ourselves with steroids. Just as baseball players did it to hit home runs, we injected ourselves with credit steroids, creating a huge housing boom and construction boom to create jobs.”

Third,

“The number of people who can compete, connect and collaborate exploded in the last decade. You know,”

Freidman continued,

“I wrote a book in 2004 called The World is Flat, which was about this connecting of the world. We’ve gone from connected to hyper-connected…. When we sat down to write this book, I actually went back to The World is Flat, I looked in the index, and I realized that Facebook wasn’t in it.

“When I said ‘the world is flat,’ Facebook didn’t exist, or for most people it didn’t exist, Twitter was a sound, the Cloud was in the sky, 4G was a parking place, Linked In was a prison, Applications were what you sent to college, and for most people Skype was a typo…

“That all happened in just the last seven years. And what it’s done is taken the world from connected to hyper-connected. And that’s been a huge opportunity, and a huge challenge.”

Fourth, we’ve witnessed a huge generational shift.

“We went from the Greatest Generation, whose philosophy was basically to save and invest, and we are still living off their saving and investing, to basically the Baby Boomer generation, whose philosophy turned out to be ‘borrow and spend.’

“And we’ve really shifted from a generation born in the Depression, World War II and the Cold War—these were serious people, they wouldn’t think of shutting down the government for a minute—to a generation…that is much less serious.

“We’ve gone from basically the values of the Greatest Generation…to a Baby Boomer generation whose values are situational….

“You put them all together, and I think you really account for a lot of the hole we’re in right now…”[iii]

The book goes in more depth on each of these themes. More importantly, the book outlines some well-considered solutions.

For example, major employers, according to Friedman, are “all looking for the same kind of employee now: Someone who can do critical reasoning and thinking…who can adapt, invent, and reinvent the job, because in this hyper-connected world change is happening so fast. You know, there are companies now in Silicon Valley that do quarterly employer reviews…because their product cycle is changing so fast. You can’t wait until the end of the year to find out you have a bad team manager.”[iv]

Clearly, Freidman argues, education has got to change—it’s been too rote, and now it needs to prepare thinkers, leaders and innovators.

This is a hard job for an industry made up of mostly non-entrepreneurial, deeply security-minded types.

“What we argue in the book…going forward there really are just going to be two kinds of countries in the world: HIEs and LIEs: High-Imagination-Enabling countries and Low-Imagination-Enabling countries.

“Forget Developed and Developing….

“We’re not going to bail our way out of this crisis, we’re not going to stimulate our way out of this crisis, we are only going to educate, ultimately, and imagine and invent our way out of this crisis.”[v]

Friedman and Mandelbaum’s analysis is much needed in our current nation.

We train our youth not to take risks, and to get the “right” answer rather than the wise answer.

These two big problems are a serious challenge.

Without wise risk, prosperity and leadership are impossible.

Friedman’s 5 Pillars

The authors of That Used To Be Us note that the United States won at every major historical turn because we followed what Friedman called “the 5 Pillars”:

1-“Educate our people up to and beyond whatever the level of technology is…

2-“Immigration. Attract the world’s most talented and energetic people…

3-“Have the world’s best infrastructure…

4-“Have the right rules for incenting, capital formation and risk taking…

5-“Government-funded research.”[vi]

Note that these five form a powerful private society where the government maintains the right rules and incentivizes free enterprise.

All five have significantly decreased since the year 2000, really since 1989, and today the Right is strongly against 2 and 5 while the Left is adamantly against 4.

Both are caught in the trap of trying to accomplish 1 and 3 using the same old methods that haven’t worked for over two decades.

No wonder we’re in decline.

We’ve stopped doing the most important things that brought America’s original and lasting successes.

The Left pushes too strongly for government-only solutions while the Right rejects any government role.

As journalist Paul Gigot noted,

“The irony is, of the past thirty, forty years, that the prestige of government has collapsed most rapidly when government has tried to do…far more than it is capable of doing.

“Government prestige increased under Ronald Reagan, the great supposed enemy of government, because he showed when you focused on a couple of things and did it well, and got the economy growing, that people said, ‘You know what, they’re competent there. It’s working.’”[vii]

We need government.

We need it to protect equal rights for everyone and maintain a system where all are treated equally before the law.

This encourages free enterprise, economic growth and improved prosperity.

Societies without such governments have little freedom.

Of course, the danger is that good government can become overbearing and put a damper on economic growth and success.

Today we have government that has clearly over-reached in a number of ways, and a backlash from the Right that wants little or no government.

We need to adopt a middle approach, good government that is, in a phrase used in the American founding, “strong and limited.”

Actually, in The Federalist Papers the term was frequently “vigorous and limited.”

We want a strong government, and at the same time we want a limited government. That is what good constitutional government is all about.

Many from the Right may consider the Friedman/Mandlebaum book a push for too much government just as many from the Left will wonder that it doesn’t push for more government solutions.

American citizens should take a step back and consider the proposals on their merits, however.

I don’t agree with every suggestion in this book, but I find a number of them to be well considered.

On the big topic, the broad concept that both government and the private sector must work together in their proper roles in order to get our nation back on track, I think the book is right on.

On the subject of education, this book is especially valuable. In truth, as the authors affirm, bailouts and stimulus packages—as necessary as they may be in certain crisis situations—will not solve America’s problems.

Real solutions depend on wise policy from government and mostly from innovation and leadership in the private sector.

Indeed, the best government can do is remove the current regulatory pressure on small business and allow the entrepreneurial American spirit to get our economy growing again.

Another recent book addresses these same issues from a different perspective.

Doom-and-Gloomers

I have long been a fan of the work of Harry S. Dent because his predictions, like those of John Naisbitt and Alvin Toffler, have been strikingly accurate even though they have been more specific, and therefore more likely to fall short, than those from most other forecasters.

Dent argues in his latest book, The Great Crash Ahead, that “the great economic crisis of 2008 will likely return in 2012, or 2013 at the latest, and will be even worse.”

His analysis is alarming, but interesting. Note that Dent is not a doom-and-gloomer.

Remember, when multiple authors in the mid-1990s were predicting a major crash ahead, Dent published The Roaring 2000s, which forecast that the stock market would boom for the next decade.

He also said that the boom would increase until a shock and downturn in 2008.

For most of his career, Dent has taken on the doomsayers and offered a counter-intuitive forecast of economic boom ahead.

The fact that he said the cycles would turn in the other direction in 2008, and that now he says they’ll get even worse, should concern every American.

Dent wrote:

“Debt and stimulus is like any drug: it takes more to create less effect.”
“Deflation is the only possible scenario in the decade ahead.”
“The U.S. Dollar will appreciate and be the safe haven—not gold, silver, the Euro or the Swiss Franc.”
“Home prices will fall by 55% to 65% from the top before this crisis is over.”
“Stock [will] crash to between 3,300 and 5,600 on the Dow by the end of 2013, or 2014 at the latest.”
“Also, the crash will be worldwide, not just in the United States and Europe, as the dramatic China bubble comes to an end.”
“The trends for the coming decade are crystal clear: we are going to experience a deeper downturn and deflation in prices, not inflation. We call this the Winter season; it comes predictably once in a lifetime, currently every 80 years, which means that very few people will understand what is happening.”[viii]

Whether we face massive inflation ahead, as Ken Kurson has argued,[ix] or the deflation Dent predicts, the economic future promises to be challenging.

As Dent notes, from 1775 to the year 2000 Americans accumulated $20 trillion in private debt.

From the year 2000 to 2008 (latest numbers), we accumulated $22 trillion more—for a total of $42 trillion.[x]

No doubt this trajectory has increased since 2008.

Since the economic difficulties ahead follow patterns that we haven’t witnessed since the 1930s, most of the current common wisdom on economics is lacking or just plain wrong.

“Unlearning is the key to times of change and transition,” Dent wrote. “What worked in a boom does not work in a downturn.”[xi]

Here are some of the things which have changed:[xii]

“It is your father’s economy”!
Don’t buy a bunch of new stuff—get out of the spending habit.
Make do with what you have.
Expect lower wages and lower prices.
Realize that debt is going to get a lot more expensive than it used to be.
Realize that assets and savings will be worth more over time.
Start thinking in terms of multiple streams of income.
“In the new world, management is the problem, not the solution.”
Entrepreneurship is in: “the coming decades and century will be seen as the age of the individual and the entrepreneur.”
Keep your business “lean and mean.”

Dent’s charts, arguments and analyses are a great read.

Add to this view the following thoughts from Friedman and Mandelbaum’s book, and we have an important look at the probable future in the years just ahead:

“No one should ever have to say ‘I am moving from America to Singapore because it is more hospitable to innovation and entrepreneurship.’ Just the opposite should be true. ‘You will know you’re successful,’ said PV Kannau, the India outsourcing entrepreneur, ‘if new companies in China and Brazil say, ‘We want to move our headquarters to America because that is the best place in the world to do business.’’

That’s not happening right now, because our regulatory and tax scheme is far from the best in the world….

“Twenty years ago, even ten years ago, a report such as this one would never have been commissioned. The United States was the best country in the world for business of any kind, the one with the largest and most open market, the most transparent legal system with the strongest property rights, the biggest and most efficient financial system, the most modern infrastructure, and the most dynamic ongoing research and development in almost every field. It was a magnet for capital and talent. No company of any size, indeed no company that merely aspired to international growth, could afford not to operate there, and none needed a consultant to tell it that.

“Now, alas, things are different. Over the past decade especially, American has changed, and not for the better.”[xiii]

How many more voices need to say the same thing before Washington listens?

Until we free up the American economy, reduce the red-tape and taxes on small business, and become the most inviting economy on earth, our economic problems will continue.

Many believe they will get worse—much worse.

The real tragedy is that all this is avoidable.

Free enterprise works.

America knows how to incentivize and encourage business growth. It’s time to get serious about restoring our free-enterprise economy—and soon!

The United States has one of the highest business tax rates in the developed world, and one of the most burdensome regulatory schemes.

Of course we can’t compete in such circumstances.

The question every American should ask is simply, why?

Why would the country that stands most for freedom in all world history now turn its back on the principles of freedom that made it great?

Why would we put our trust in bureaucracy, regulation and government rather than the proven dynamism of American enterprise?

We Can Only Ask, “Why?”

Whatever the answer, unless we make changes quickly the economic forecast ahead is dismal.

Friedman said America is like a nation turned upside down.

At the bottom is an enterprising people passionately seeking to overcome economic challenges with innovation, ingenuity and tenacity, while at the top is a government consistently blocking the entrepreneurial efforts of its people.[xiv]

Again, we can only ask, “Why?”

When Paul Kennedy wrote The Rise and Fall of the Great Powers over two decades ago, many scoffed at his prediction that American hubris was leading to our eventual downfall—in the way so many great nations and empires of history have declined.

Even the leading voice of anti-decline, Joseph S. Nye, has suggested that many of Washington’s policies are making it difficult for the U.S. to remain the world’s economic leader.

Hopefully the solution won’t be as drastic as Friedman, Mandelbaum and Dent predict.

“Shock therapy,” they suggest, may now be the only effective way to change our country.

If this is true, we are in for rocky times ahead.

One thing is certain.

Friedman and Mandelbaum rightly argue that the best way out of this is not so much to study the fall of Rome, the Ottoman Empire, or other historical examples of what not to do, but to make a national focus of studying what worked best in our own American history.[xv]

We know the answers, because they are part of our national heritage.

It is time to put aside our modernist sense of superiority and admit that we want what past generations had economically and learn what worked for them.

It will work again, if we are willing to learn and make the needed changes, because the principles of freedom are timeless and powerful.

Decline is not inevitable, but only a wise people well-studied in the principles of historical success can avoid it.

We must become such a people.

[i] September 1-7, 2011

[ii] Meet the Press, September 4, 2011

[iii] Ibid.

[iv] Ibid.

[v] Ibid.

[vi] Ibid.

[vii] Ibid.

[viii] From Harry S. Dent, The Great Crash Ahead.

[ix] See Ken Kurson, “Let Them Eat iPads,” Esquire, May 2011.

[x] Op. Cit., Dent.

[xi] Ibid.

[xii] Ibid.

[xiii] Thomas L. Friedman and Michael Mandelbaum, That Used to Be Us.

[xiv] Op. Cit., Meet the Press.

[xv] Op. Cit., Freidman and Mandelbaum.

Category : Aristocracy &Business &Citizenship &Constitution &Culture &Featured &Government &Leadership &Liberty &Politics

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

19 Questions Answered in FreedomShift

August 13th, 2011 // 1:56 pm @ Oliver DeMille

Following historical cycles and trends, we have recently experienced a significant recession and major unemployment. According to the patterns of history, what is the third major economic challenge which is just ahead? (Learn what it is so you can prepare for it before it comes.)
Based on the lessons of past generations which faced major economic problems, what are the twelve things every family should do to deal with the economic challenges ahead?
What are the three major choices which American citizens need to make to overcome our nation’s economic problems and restore economic growth and increased freedom?
Where did Tocqueville say that the greatness of America lies? (The answer may surprise you.)
What exactly is a FreedomShift and how is one accomplished?
What is “the Law of the Vital Few?”
How is this law drastically changing America today?
What are the three top problems that are keeping America from fixing its problems right now?
What are six predictions of the Anti-Federalists from the founding generation that have come true today and are causing major problems in Washington D.C.’s ability to lead the nation?
Is our society being run by the cultures of our Elementary Schools, High Schools, Colleges & Corporations, Government Officials, or the Adults in our society?
How can we move back to adult culture, especially in Washington?
What are the three major groups in the Republican Party, the three major groups in the Democratic Party, and the other major groups running our nation politically?
(We are much more complex than the historical two-party system that dominated during the Cold War, and only those who understand these splits in the parties will know what is really going on in the nation.)
Who is the new group that is literally running the United States now? (Hint: it’s not the Tea Party, socialists, environmentalists, the religious right, liberals or even conservatives. The answer is surprising and deeply important.)
What are the nine types of people who run both of the two major political parties?
How will they impact the election of 2012?
What should we expect in the upcoming election?
What are the eight kinds of freedom, and which have we already lost in America?
Which of the eight are we now losing?
What does this loss mean directly for your family and the economy?

These challenges can be dealt with positively, but only if we know what is coming in the decade ahead.

For the answers to these questions and more on how “regular” people like you and me have all the power to refresh our liberties, read FreedomShift: 3 Choice to Reclaim America’s Destiny, available in paperback, pdf and Kindle editions. (Audiobook version, read by the author, coming soon!)

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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 : Aristocracy &Blog &Citizenship &Community &Culture &Current Events &Economics &Entrepreneurship &Featured &Government &Independents &Leadership &Liberty &Mini-Factories &Politics &Prosperity &Tribes

The Party System’s Newest Flaw

August 6th, 2011 // 10:08 am @ Oliver DeMille

Ungovernable

I recently watched a televised debate on whether America’s two-party system is making our nation ungovernable.

During the debate, New York Times columnist David Brooks said something fascinating.

He mentioned that political scientists keep track of how much cooperation there is between the two parties in Congress, and that while there have been periods of major party fighting such as the 1860s and 1960s, we are at an all-time low in partisan cooperation to get deals done.

Then he noted that the major difference in our current party system is that always before each party included a wide variety of viewpoints.

Within the same tent of the Democratic Party, for instance, many views and policies were suggested, debated and decided.

The same diversity existed within the Republican Party.

Today, however, this is not the case—at least not when it comes to policy proposals.

“The problem is that each party has become more rigid in my own lifetime of covering this,” he said. “When I came to Washington in the early 1980s, I could go to back ventures like Jack Kemp or Newt Gingrich on the Republican side. They had all these weird ideas they were trying to push on leadership. That doesn’t happen [anymore]—the leaders control everything now. The nature of the parties has changed.”

In their drive to win, the party leaders have organized around single, central themes and strongly demanded that congressmen stay within the accepted partisan bounds on nearly all topics.

Most of our elected officials are reasonable and dedicated, and if we put a group of them in a room without party labels and the goal of solving a given issue—say debt, deficits, immigration, or health care—they would almost certainly be able to propose sensible and plausible solutions in a relatively short time.

But attach a party label to each person in the room, especially with the historical baggage now attached to the parties, and the cost, timeline and likelihood of success would suddenly and permanently change.

This is a serious problem for modern America.

Racism of Red and Blue

Calling someone a Democrat or a Republican today is fraught with danger—they may well take offense.

I once watched a man stand at a public meeting and make a suggestion on how to solve the problem before the group.

The officials at the front of the room asked him several questions, and he answered them with common sense and a clear understanding of the situation.

A few members of the audience stood to add their support and small suggestions to improve his idea.

The room was moving toward consensus, when another participant asked if the speaker was a Republican.

When he answered that he was a registered Democrat, the mood in the room changed.

A few argued with him (making the point that they were Republicans, which literally had nothing to do with the topic at hand).

This fueled anger among Democrats and within minutes the room was deeply divided.

The official running the meeting took the floor and pointed out to everyone that the man’s idea had been almost universally supported before his political affiliation was mentioned, and tried to get the group back to discussing the merits of the idea.

But it was too late: the Republicans in the room now disliked his idea and the Democrats supported it.

Many had to change their minds to get to this point, but it seems that was easy once they knew which party he belonged to.

This kind of divisiveness is all too common.

Even online, many, perhaps most, American citizens who engage in political conversation limit themselves to groups where the other people agree with their views.

Few discussions on political topics are inclusive or open to learning from diverse perspectives.

Squabbles and Solutions

Fortunately, the solution to this starts at the ground level.

Each of us can listen to the views of people who disagree with us on politics.

I don’t know when the idea that discussing politics is impolite came into vogue, but it has only hurt our freedom and prosperity.

Right now, today, we can learn from other political views, not to debunk them immediately and angrily like most people do, but rather to really understand their point.

This is not the same as forgetting one’s beliefs—it is in fact the opposite process of strengthening one’s most important beliefs by increasing your understanding of the world.

A move to a European-style multiparty system is not the answer, since this would create a structure where the winner still runs the whole government but is usually a lot more extreme than moderate.

Ideally, America could adopt a non-partisan model like that suggested by many of the American framers.

The Constitution is actually designed for a nonparty system.

In the absence of a major shift to a nonpartisan model, the best reform to our system would be for more American citizens to ignore party spin and think independently—and openly listen to and learn from others who do the same, even if they disagree with your ideas.

We all have more to learn, and in fact significant political learning is more likely when we are listening to those whose views differ from the thoughts we’ve already had.

New ideas spark increased thinking, even when you disagree with the details.

Of course, people shouldn’t simply accept ideas they find problematic or wrong, but free citizens need to be good listeners and open-minded thinkers.

Such maturity is needed in any free society, and especially in one where ideological political parties dominate the discussion.

Our leaders, deeply mired in partisan squabbles, are unlikely to make this change, so it is up to regular Americans to take the lead in discussing and promoting needed solutions for many of our biggest challenges.

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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 &Culture &Featured &Government &Leadership &Liberty &Politics

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.

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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