Delivering the Goods

The United States rose up from a handful of rebellious colonies to become the richest and most powerful nation in the world. Why? Because we led the world in production. For 200 years, America delivered the goods.

But, in the 1970’s, all that suddenly changed. For the first time in history, the U.S. started having trade deficits. That means our net consumption exceeded our net production. And, every single year since 1975, our nation has consistently consumed more than it produced. It doesn’t take a rocket scientist to know that’s not sustainable.

The depressing truth is America is no longer a world leader in production. We are trailing the pack. We are now a debtor nation, and our biggest creditor is China. — What the hell happened? And how will we ever recover? And, the more disturbing question is, what will happen to America if we don’t?

If we ever want to restore America to its proper place in the world, the first thing we need to understand is why we no longer have a productive economy. It’s pretty simple, really. — Because we no longer produce. Why not? – If we take a good hard look at the nature of production, maybe we can figure that out. The three key elements of production are capital, labor, and raw materials.

First, you need capital for research and development. To develop a new product that meets a real need in the marketplace takes a lot of research. It may take many years to develop. Research and development is extremely expensive, and there’s no guarantee of success. There has to be an enormous potential return on investment to justify that kind of risk.

That kind of return on investment is what our current administration refers to as “excessive profits.” And they have this notion that “excessive profits” should be punitively taxed. When government puts a lid on the potential for return on investment, what happens? The investors take their capital and invest it someplace else, — someplace that welcomes production, and wants to build up their economy and provide employment for their population. (Unlike the United States, it would seem.)

The second thing you need for production is raw materials. No matter what you want to produce, you need some combination of raw materials to produce it, whether wood, paper, metal, glass, fiber, or petroleum products. All raw materials come from the earth; they don’t come out of the air, or some genius’ imagination, or the printing presses at the Federal Reserve. They all come out of the ground, either through timber, mining, or agriculture.

Here, in Southern Oregon, we live in one of the richest areas in the country, in terms of natural resources. We’re rich in timber. We’re rich in minerals. But, if this part of the country is so rich, why is it so poor? Why is unemployment so high? Because we’re not allowed to use the natural resources with which we’re abundantly blessed. Overregulation, and the endless environmental litigation it has spawned, has all but curtailed the timber and mining industries, — the very industries that provide raw materials for every sort of production on which our economy relies. And the overregulation doesn’t stop there. It’s hobbling the manufacturing industries, too.

The third thing required for production is labor. We’ve actually got a surplus of that. Look at our unemployment numbers, nationwide. Private sector jobs are steadily declining because our industries are stymied by excessive regulation and punitive taxation. So how does our government address that issue? It tries to replace the jobs lost due to declining production by creating new jobs in the public sector.

The trouble is those jobs do nothing to restore our national productivity. Public sector jobs and service jobs don’t create any new wealth. They just swirl money around in the economy. And, as that money swirls around, more and more of it leaks out to other countries, as we buy foreign-made products because we can’t or don’t produce enough at home.

As the real wealth leaks out of our economy, the Fed prints up more and more new money, which only dilutes the value of the money we already have in circulation, leading to higher and higher inflation. As long as we consume more than we produce, there is no way to add real value back into our economy, and our currency will continue to lose whatever value it has. We must restore production to have a sustainable economy.

This country was founded on the sacred principles of liberty and freedom. Not just individual freedom, but economic freedom. America became a world leader because America delivered the goods. That’s what it’s all about. That’s what it’s always been about. We have to stay solvent to preserve our liberty. If our economy fails, we’ll lose our freedom. Stifling production smothers the economy. And that’s what our government is doing.

Contact your Congressmen and Senators and tell them we want our economy back. Government can’t solve this problem. Government is the problem.

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Entitlement, Dependency, Control

Responsibility isn’t something people are born with. It’s learned. It’s learned by prioritizing, making tradeoffs, weighing the benefits, costs, and risks of alternative courses of action, and dealing with the consequences of one’s decisions.

When an overprotective parent spoils their child by shielding them from hard lessons, or gives the child whatever it wants so the child will love them more, they fail to instill in the child a sense of responsibility. Instead they encumber it with a false sense of entitlement to whatever the child desires. Later, the child is faced with a rude awakening when thrust into a world where it has to compete with others who are accustomed to making hard choices and working for the things they desire.

Once a sense of entitlement is engrained in someone’s belief system, it’s difficult to overcome. Developing a sense of responsibility is counter to their conditioning, and they cannot easily grasp the notion that they are really not entitled to anything they haven’t earned. When something doesn’t come easily, instead of getting fired up with a sense of determination to work harder and make the necessary sacrifices to achieve their goal, they feel resentful that it isn’t provided for them. Whatever nominal effort they put into it seems like it ought to be enough. They feel a deep sense of personal injustice that they can’t have things that other people have, oblivious to the tradeoffs and sacrifices others have had to make to acquire those things.

In the real world, nobody is entitled to own a house. If you can’t afford a house, the responsible thing to do is to work and save and sacrifice until you can afford to buy one. By encouraging people to buy houses they really can’t afford, the government sets them up for failure later on when the house payments become a burden they cannot sustain. And when that time comes, the “homeowners” won’t consider that, until their mortgage is paid in full, the house isn’t actually theirs. Instead, they’ll feel entitled to the house in which they’re living, and deeply resentful of losing it.

A person who buys a house incurs a responsibility. If they’re shielded from the full impact of the responsibility they’re incurring, by making it easier than it would be (in a free market) for them to assume it, it gives them a false sense of security and makes the responsibility seem lighter than it is. That is not a wise thing to do. And the current economic crisis is a perfect illustration of that folly. Yet the government is going down the same path again, with the FHA taking on the role once played by AIG.

This is just one of many examples of the government fostering an entitlement mentality in its citizens. Perhaps, like the parent who spoils their child in an attempt to buy its love, politicians see this as a way to buy votes. But, like overprotective parents trying to make life easier for their precious dumplings, when government shields people from the onus of personal responsibility, it does not strengthen them; it weakens them. And it not only weakens the individual beneficiaries of the government’s largesse, it weakens the entire economy, and the underlying moral fiber of our nation.

For years, our government has been actively encouraging people to become less and less self-reliant. By the same token, it has been making us more and more dependent on government. The flip side of dependency is control. The more dependent one is on another, the more control the other has over them. Perhaps the underlying motivation is not so innocent as politicians trying to buy their constituents’ love. Perhaps it’s far more insidious.

The current crisis in our nation is not just an economic crisis. It has far broader implications. The only way out of this crisis is to bring about a fundamental change. — Not the kind of change that accelerates the crisis, leading to ever more weakness, dependency, and state control, but a return to the once deeply-held values that made this country great: personal responsibility, individual sovereignty, and economic freedom.

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