Patriotism: Don't look to Washington for solutions

The solution to our nation's economic problems isn't in Washington. More government isn't the answer, but the problem isn't 'too much government', either.  There's a reason things aren't getting better:  people are looking for the government, one way or another, to solve the problem.

The solution to our economic woes is non-governmental.  The solution is more patriotism.

True patriotism has little to do with saluting the flag or reciting the pledge of allegience.  Patriotism is love of one's country, and acting based on this love.

Love is a feeling of connectedness with someone or something outside of yourself.  When you love someone, you feel pain when they feel pain.   When they are happy, it makes you happy.  You act in the interest of those you love, because you feel connected to them; helping them helps you.

Self-interest is the other end of the spectrum from love. An individual who is completely self-interested loves only himself or herself.  A completely self-interested man may help others, but only to the extent that such help is likely to benefit himself.  "You scratch my back, I'll scratch yours."  That's not love.  But more and more these days it's the way people think of their country.  "What's in it for me?" they ask.  Self-interest is killing our nation.  What we need is more people who truly love their country.

How can patriotism solve our economic woes without involving government?  It's a matter of simple economics.  What does our country need?  More American jobs!   If people consumed more American products, there would be more work for Americans to do.  Much of what Americans purchase is produced overseas.  If we Americans would increase our spending on American products by 20% while reducing what we spend on imported products by the same dollar amount, American businesses (at least those that don't export) would have to increase production by 20%.  This would have a significant, positive impact on our high unemployment.  And the money earned by the newly hired / re-hired workers would have a compounding effect on those workers' communities.  This is what our country needs.  And it has little or nothing to do with government policies.
Why aren't federal elected officials pushing this idea?  The answer is simple: they can't.  Encouraging citizens to 'buy domestic' smacks of protectionism and would upset our trading partners, most especially China, who owns a huge amount of our debt.  If President Obama, or even a Republican president, touted such a campaign, the consequences could be devestating.  (If China sold all its U.S. Treasuries, the interest rates on our $15+ Trillion debt would soar, and hyper-inflation would be a distinct possibility.)  So Washington can't suggest this simple solution. 

The other obstacle to the solution is our society's entrenched focus on individual self-interest, which competes with true patriotism.  A self-interested person looks at the cost of the solution, which is significant.  The truth is that American goods are (in general) significantly more expensive than foreign goods.  There are reasons for this.  Yes, many of those reasons directly or indirectly related to government regulations.  American workers are paid far more than workers in developing nations.  American workers receive more in benefits than counterparts in other countries.  American companies are required to meet certain environmental and safety standards that other countries don't require.  And for these and other reasons American-made products tend to be significantly more expensive than foreign-made products.  Therefore in order to consume 20% more American-made products, Americans would have to reduce consumption of foreign products by significantly more than 20%.  In short, consumers would get less while paying the same amount of money.  Self-interested people would say "This is a bad deal!  Why should I get less for the same amount of money?"  The answer, which self-interested people probably won't accept, is "you're doing it for your country."  Patriots should understand what this means.  Their love of country, their feeling of connectedness to their country, means the cost of the action is balanced by the benefit the country as a whole receives.

In summary, we are faced with a situation where patriotism is needed, but the traditional idea of patriotism (following the government's lead) doesn't apply.  Our nation has given us freedom; it's time for patriots to use that freedom to help our nation out of these dark economic times.  It's not a matter of taking up arms; it's not a matter of supporting one political party or another; it's not a matter of increasing or decreasing the size of government; it's a matter of using our economic freedom in a way that helps our country, even though it requires some sacrifice on our part.  As the song says, freedom isn't free.  This is an opportunity to help pay for it without joining the military.

Give holiday gifts that support U.S. jobs

I don't know the author of the following, but I wholeheartedly agree with his/her ideas:

Christmas 2011 -- Birth of a New Tradition

As the holidays approach, the giant Asian factories are kicking into high gear to provide Americans with monstrous piles of cheaply produced goods -- merchandise that has been produced at the expense of American labor. This year will be different. This year Americans will give the gift of genuine concern for other Americans. There is no longer an excuse that, at gift giving time, nothing can be found that is produced by American hands. Yes there is!

It's time to think outside the box, people. Who says a gift needs to fit in a shirt box, wrapped in Chinese produced wrapping paper?

Everyone -- yes EVERYONE gets their hair cut. How about gift certificates from your local American hair salon or barber?

Gym membership? It's appropriate for all ages who are thinking about some health improvement.

Who wouldn't appreciate getting their car detailed? Small, American owned detail shops and car washes would love to sell you a gift certificate or a book of gift certificates.


Are you one of those extravagant givers who think nothing of plunking down the Benjamines on a Chinese made flat-screen? Perhaps that grateful gift receiver would like his driveway sealed, or lawn mowed for the summer, or driveway plowed all winter, or games at the local golf course.


There are a bazillion owner-run restaurants -- all offering gift certificates. And, if your intended isn't the fancy eatery sort, what about a half dozen breakfasts at the local breakfast joint. Remember, folks this isn't about big National chains -- this is about supporting your home town Americans with their financial lives on the line to keep their doors open.

How many people couldn't use an oil change for their car, truck or motorcycle, done at a shop run by the American working guy?

Thinking about a heartfelt gift for mom? Mom would LOVE the services of a local cleaning lady for a day. 

My computer could use a tune-up, and I KNOW I can find some young guy who is struggling to get his repair business up and running.

OK, you were looking for something more personal. Local crafts people spin their own wool and knit them into scarves. They make jewelry, and pottery and beautiful wooden boxes.

Plan your holiday outings at local, owner operated restaurants and leave your server a nice tip. And, how about going out to see a play or ballet at your hometown theatre. 

Musicians need love too, so find a venue showcasing local bands.

Honestly, people, do you REALLY need to buy another ten thousand Chinese lights for the house? When you buy a five dollar string of light, about fifty cents stays in the community. If you have those kinds of bucks to burn, leave the mailman, trash guy or babysitter a nice BIG tip.

You see, Christmas is no longer about draining American pockets so that China can build another glittering city. Christmas is now about caring about US, encouraging American small businesses to keep plugging away to follow their dreams. And, when we care about other Americans, we care about our communities, and the benefits come back to us in ways we couldn't imagine.

THIS is the new American Christmas tradition.

Copy this and send it to everyone on your mailing list -- post it to discussion groups -- throw up a post on Craigslist in the Rants and Raves section in your city -- send it to the editor of your local paper and radio stations, and TV news departments. This is a revolution of caring about each other, and isn't that what Christmas is about?

   

Three Scenarios: Productive Societies

Imagine a world where 10% of the population can produce everything needed by everyone on the planet.

Now imagine that you are sent to rule this planet as a benevolent dictator. 

Scenario (1):
When you arrive you find that 90% have the people have the enslaved the other 10%, forcing the minority to work, while the majority take it easy and live off what the minority produces.

You immediately call a meeting of all the people.  "This isn't fair!  Nine out of ten people are living off the backs of the few that are doing all the work!"

The non-workers respond: "The workers get exactly the same share that the non-workers get, share and share alike.  And there's not enough work to keep everyone busy; SOMEBODY has to do the work.  And this is the system we've worked out."

You're the (benevolent) dictator.  What do you do?

Scenario (2):
When you arrive you find that although 10% of the people are producing enough to support everyone on the planet at a comfortable level, what they produce isn't supporting everyone at a comfortable level.  The workers live luxuriously in walled cities, with every comfort and convenience they can imagine.  Outside the walls 70% of the planet's population lives in unemployed poverty.  The remaining 20% are employed in the cities at low wages, serving the productive 10%.

You immediately call a meeting of the leaders of the productive 10%.  You say, "This doesn't seem right!  Have you seen conditions outside your walls?"

The productive 10% reply: "There's nothing wrong with our system.  We're the ones doing all the work!  We have a right to consume what we produce.  Most of the people outside the walls don't do anything.  Why should we support them?  The fact that the 70% can survive at all is mostly due to the fact that we employ the 20% in our restaurants and shops.  If it weren't for us, the 90% would starve!   It's unfair for you to suggest that what we produce should be taken from us and given to people who aren't producing anything.

You're the (benevolent) dictator.  What do you do?

Scenario (3):
When you arrive you find that 10% of the people are producing enough to support everyone on the planet at a comfortable level, and those 10% are living at a comfortable level, but the other 90% are split into two distinct groups:  87% live in dire poverty,  but the remaining 3% live in great luxury.

You call a meeting of the rich 3%:  "What's going on here?  Why are you so wealthy when 87% of the population is impoverished?"

The rich 3% explain: "The only reason that 10% of the population can produce so much is that our parents and grandparents were clever and inventive and industrious.  They developed techniques and machines and organizations that increase productivity immensely.  There's nothing special about the 10% who are now working, and we can prove it!  We can fire any of them at any time, and replace them with someone from the impoverished 87% without any trouble at all!  It's our machines that do the work.  Our grandparents and parents sacrificed a lot to develop these machines for the benefit of us, their children.  We deserve the things our families' machines produce.  The 10% are lucky to be working at all.  And the 87% aren't doing anything; they don't deserve anything.  If any of them want something, they should be like our grandparents and create a machine that is as productive as our machines.  They're free to do that anytime they wish.  But bear in mind: if they want to play in the big leagues, they better come prepared to play!  Productivity is the name of the game, and we're the most productive people in history!  That's why 10% of the people can produce so much, and that's why we deserve every dollar we earn from our factories.  It's not our job to help competitors."

You're the (benevolent) dictator.  What do you do?

Economic growth and more jobs aren't always good for the nation

There's an incorrect assumption that economic growth and more jobs are always good for the nation. Here's a simple counter-example:

 

The majority of people in the U.S. are overweight or obese. Clearly many people eat too much, and too much of the wrong things. But think of the impact of this overeating on economic growth and job creation: Overconsumption of food means we have to create more food; creation of more food means more jobs. Obesity has negative health effects: more injuries, more heart problems, more diabetes, and more complications when treating illnesses and injuries. This requires more people in the healthcare industry: more jobs! So over-eating results in economic growth and job-creation while at the same time reducing the overall health of the nation.

 

If we had a choice between between

• (a) employing people to produce extra food, and to take care of people suffering from overconsumption of food, and
• (b) having a healthier population, and eliminating all the work involved in overfeeding and caring for the overfed,

why would we want to choose option (a)?  Focusing on economic growth and job creation does lead us to choose option (a)!

 

One explanation for choice (a) is that we shouldn't be a 'nanny state': if people are foolish enough to make bad decisions, we don't have any business telling them they're wrong. (We literally 'have business' resulting from their foolish choices!) The free market says that everyone should be free to make their own choices. The problem is that in our example, encouraging people to make bad decisions is good for the economy. Is that what we want to do?

The real issue concerns distribution of resources. All the people employed to overfeed and care for the overfed 'qualify' to be part of the economy. The overfed pay their wages, if they can. If the overfed can't pay their wages, then the rest of us end up doing so. It would be more efficient for the overfed to eat less, and simply pay the overfeeders, healthcare professionals, and caretakers for doing nothing. But if the overfeeders, healthcare professionals, and caretakers weren't doing anything, how would we distinguish them other people who aren't employed? In effect, we're paying people (including some highly trained healthcare professionals) to do 'busy work', at the cost of our nation's overall health. This is foolish.

 

I'm not saying that alternatives are obvious, or than any alternative system must be superior to what we have now. What I am saying is that alternatives should be imagined and considered.

The assumption that economic growth and more jobs are always good for the nation is incorrect. Our focus needs to be on doing what is good for our nation (and the world). This is not the same thing as promoting economic growth and job creation, despite what economic leaders want you to believe (and probably believe themselves).

The economy isn't everything

A lot of attention is paid to growth of the economy. When the economy grows, people celebrate. Economic growth means more jobs and increased prosperity. So many people, especially policy-makers, pay a great deal of attention to economic growth. They use it as a measure of the economic health of the nation. And perhaps it is. But perhaps the economic health of the nation is not necessarily the same as the well-being of the nation.

Sometimes we assume that "the economy" includes everything important that people do in our country. That's a bad assumption. It's possible for things to occur outside the economy, and they do. We need to remember that. The assumption that the economy is everything can get us into trouble, and can make us overlook possible ways to get out of trouble.

A simple example of activity outside the economy is the making my bed in the morning. Nobody pays me to do it. When I make my own bed I have absolutely no impact on the national economy.

So what? Why does it matter that making my bed is outside the economy? Here's the answer: One way the economy grows is by pulling activities that are outside the economy into the economy. So economic growth doesn't necessarily improve our well-being!

Here's an absurd example: Suppose I make a deal with my neighbor, Joe, that I'll pay him five dollars a day to make my bed, and he'll pay me five dollars a day to make his bed. And assume that 100 million American households make the same deal with their neighbors. Overnight, the U.S. economy would grow by $500 million per day. Instant economic growth! 100 million new part-time jobs would be created! But we wouldn't be any better off. The same number of beds would be being made. No one would have any extra money. All we would have done would have been to pull activities that had been outside the economy into the economy. This would help the economy, but it wouldn't help us.

In recent generations many activities that used to be outside the economy have been drawn into it. Two-income families used to be the exception; now they're the norm. Much of the work done by 'stay-at-home moms' was outside the economy; now households pay others to cook for them (restaurants and convenience foods) and to take care of their kids. This is neither bad nor good. And that's the point. We assume that economic growth is vitally important. But it doesn't have to be. The possibility exists for the economy to shrink without negatively affecting our national well-being. An activity doesn't necessarily disappear because it leaves the economy. We need to remember this, especially in light of sustained high unemployment rates. We shouldn't assume that people don't and can't do anything unless they have a job.

Comparing Federal Budget to a Household

The following letter to the editor appeared the San Antonio newspaper recently.  I think the letter-writer had a good point, but overlooked something, too.  Here's the letter, followed by my response:

"I want to provide some interesting information regarding the federal budget.

At the end of June, the government's income was $2.17 trillion. The budget was $3.82 trillion. New debt was $1.65 trillion. National debt was $14.27 trillion and recent budget cuts ($38.5 billion) totaled about 1 percent of the budget.

Now, let's take the above figures, cut off nine zeros and apply the results to a fictitious clan called the “Smith family.”

Total annual income of the Smith family is $21,700.

The amount of money the Smith family spent is $38,200.

The amount of new debt added to the Smiths' credit card is $16,500.

The outstanding balance on their credit card is now $142,710 and the amount they cut from the family budget was $385.

Do you know any family that would cut $385 from its budget in order to solve $16,500 in deficit spending? America's economic situation becomes more frightening with each passing day.

Harold Estep"

Here's my (unpublished) comment on Mr. Estep's letter:

Harold Estep's letter (The'Smith Family', 9/3/11) that puts the federal budget in terms of a family budget is helpful and apt. A family spending $38,200 a year while earning $21,700 DOES need to cut spending dramatically. But it would be stupid for the parents to say "it's unfair to ask us to work any harder: after all, we're bringing in $21,700, and the children aren't bringing home a thing! We can save a lot of money by dumping the kids and Grandma and moving to a tiny apartment."


We shouldn't expect the parents to suddenly start earning an extra $16,500 a year. But we also shouldn't assume that all $16,500 of their expenses are unnecessary. There's a middle ground somewhere: less spending AND more income. At the federal level, we need a committment to balancing the budget, not a committment to 'no new taxes.' Mr. Estep is right: we DO need major cuts in spending. But that's not the entire solution."

We must make do with less

We've been living beyond our means, both as a nation and as individuals.  But our public discourse ignores this fact as we search for solutions that allow us to continue to live beyond our means.  Living beyond our means is a major cause of our problems; it can't be part of the solution.

We need to scale back.  We need to accept the fact that we can't solve our problems without changing the way we live.  Resources we've been consuming need to be redirected toward creating jobs for one another and paying off previously incurred debts, both public and private.  This redirection of resources will appear as higher prices and/or higher taxes.  We'll have less left over, and therefore less "stuff".

The good news is that we don't need nearly as much stuff as we've been consuming.  Current levels of consumption aren't necessary for happiness; if they were, our great grandparents would have killed themselves before they had time to reproduce.  We can be happy with less.  But no one is willing to speak the truth.

The fear is that reducing consumption will make jobs disappear, and this will make the economic situation worse.  But this doesn't have to be true.  Reduced consumption doesn't have to mean reduced spending.  Part of the solution (at least for the U.S.) is for people to be willing to pay higher prices for goods created by American jobs, even when cheaper products are available from foreign sources.  In effect, this is voluntary inflation, which is better than the involuntary inflation we will experience if we don't take action to resolve our current problems.