A Challenge to My Right-leaning Friends

Two years ago, I laid down this challenge to my left-leaning friends – What, specifically, to you expect of President Obama and the Democrats in control of Congress over the next two years such that if these things are not accomplished you will consider it a failure?

I received the following answers (with my assessments):

  • Close Gitmo – (Nope.)
  • End the war in Iraq – (Nope.)
  • End the war in Afghanistan – (Actually has expended it.)
  • Nationalize healthcare – (I would say no, but I think it is more of a mess now.)
  • Increase taxes on the wealthy, roll back the Bush tax cuts – (Will happen after January 1, 2011 when they expire according to the original law, I would call this a no!)
  • Reduce unemployment to 6 percent – (Nope.)

Today, I make this same challenge to my right-leaning friends – What, specifically, to you expect of the Republicans in control of the House over the next two years such that if these things are not accomplished you will consider it a failure?

For those of you in Texas, I will add – What, specifically, to you expect of the Republicans in control of the entire state government by an overwhelming margin to do over the next two years, such that, if these things are not accomplished you will consider it a failure?

Singapore and Jamaica

In 1959, Singapore and Jamaica were economic and population equals. Over the next 40 years something incredible happened. Singapore has become an economic powerhouse while Jamaica has stagnated.

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In the above Gapminder graph, the yellow dots plot Jamaica’s course while the red dots chart Singapore’s. What could possible explain this?

I believe the answer is in supply side economics. While both nation have similar needs from a population and climate standpoint, only Singapore has focused on creating supply for others. Jamaica’s belief has been, “We need, so it should be given to us,” while Singapore’s has been, “We have created and provided, and it has been given to us.”

The Haircut

My uncle sent this to me today and I thought it would be appropriate to post on my blog as election day in the United States is tomorrow.

I have sourced the original with the exception of the last sentence swifttallon to eBaum’s world.

One day a florist went to a barber for a haircut. After the cut, he asked about his bill, and the barber replied, ‘I cannot accept money from you , I’m doing community service this week.’ The florist  was pleased and left the shop. When the barber went to open his shop the next morning, there was a ‘thank you’ card and a dozen roses waiting for him at his door.

Later, a cop comes in for a haircut, and when he tries to pay his bill, the barber again replied, ‘I cannot accept money from you , I’m doing community service this week.’ The cop was happy and left the shop. The next morning when the barber went to open up, there was a ‘thank you’ card and a dozen donuts waiting for him at his door.

Then a Congressman came in for a haircut, and when he went to pay his bill, the barber again replied, ‘I can not accept money from you. I’m doing community service this week.’ The Congressman was very happy and left the shop. The next morning, when the barber went to open up, there were a dozen Congressmen lined up waiting for a free haircut.

And that, my friends, illustrates the fundamental difference between the citizens of our country and the politicians who run it.

A Review of The Israel Test

Even the thought of summarizing the premise of George Gilder’s new book, The Israel Test, causes my mind to reel.

To attempt: The cause of the conflict between Israel and the neighboring Arab countries is not religion (although there are certainly elements) nor racism (although there are certainly elements), but rather it is caused by envy. Israel, in the 60 plus years of its existence, has been extraordinarily successful and the perception is that it has done so by taking from the Palestinians. In short, the conflict is about the zero-sum thinking of demand economics versus positive-sum thinking of supply-side economics. It is about the jealousy felt against people who have attained success and the belief that the only way they could have attained that success is by taking from others.

“The real issue is between the rule of law and the rule of leveler egalitarianism, between creative excellence and covetous ‘fairness’,’ between admiration of achievement versus envy and resentment of it,” Gilder says.

In Part One, Zerizus, Gilder, in his best and most brilliant prose since Wealth & Poverty, develops this premise and destroys any and all arguments against it. He posits his Golden Rule of Capitalism – The good fortune of others is also one’s own. One of the troubles with government, indeed with even democracy, is that government (transfers of wealth) and democracy (elections)  are zero-sum, while the economic system, capitalism is positive-sum. This influences the thinking of all leaders in democracies that they need to create an equity of outcomes, not just an equality of opportunity. He terms these people, “handi-capitalists!”

In Part Two, Israel Inside, Gilder introduces us to Jewish and Israel scientists and entrepreneurs who have had a profound influence on the world as we know it and a few, who he believes, are about to have even great influence. Intel’s latest microprocessors, they are coming from Israel; Petaflop networking, from Israel; Wireless high-definition interface standards, from Israel; Algorithms which map the human genome, Israel.

In Part Three, The Paradox of Peace, Gilder puts forth his by far most controversial and thought provoking  postulate – the Peace Now movement inside and outside  Israel, condemn themselves to Peace Never. Gilder quotes Nobel Laureate Robert Aumann, “If you want peace now, you may well never get peace. But if you have time – if you can wait – that changes the whole picture; then you might get peace now.” Gilder states, “Peace requires the imposition of penalties on aggression.”

Simply said, The Israel Test is not a easy read, but it is absolutely a must-read.

Huffington Misses the Target, But She Hit the Tree

Paul Dunn tweeted about an piece posted on April 6 by Arianna Huffington in which she criticized the Obama Administration for its bank-centered approach to dealing with the current economic situation. In the article she analogizes the Administration’s banking solution with that of Ptolemy’s thinking about the Earth-centered universe, “like Ptolemy, they are really smart, they are really good at rationalizing.” The problem, of course, is that if your underlying theory is incorrect, any thinking you have done will lead to false conclusions.

While Huffington does a great job a destroying the Obama argument, she unfortunately proposes and equally faulty solution of her own, which is a variation on Keynesianism. To further her own analogy, she has replace the Earth-centered view of the universe with a Sun-centered one, but she concludes the sun is the center of the universe, i.e., all heavenly bodies revolve around the sun. She misses the fact that the sun itself revolves around the center of the Milky Way and that the Milky Way is one of billions of galaxies in a cosmos with no center.

The real solution to our current situation is to allow the entrepreneur a freer reign in an even freer market. Just like the cosmos there is no center per se. Whereas Huffington proposes a government-centered view of the universe to replace the bank-centered one. I suggest an open free moving cosmos in which entrepreneurs serve of the matter and energy, freely forming into heavenly bodies as the see fit. Some will be stars burning brightly, some planets, some comets – all influencing each other.

Like the cosmos, any attempts to organize must be self regulated and not insist on an anything-centered approach.

Where the Economic Recovery Will Come From

Despite what you are hearing the media about the plans of governments and large corporate entities, the economy will recover in any large part not due to their efforts, but rather from the efforts of small businesses – from entrepreneurs. They have been,are, and always will be the creative force in the world.

Whereas large corporations tend to worry more about the numbers (mostly their costs), small businesses focus on the creation of value for customers.

Whereas governmental agencies can only spend money that they have first taken from others, small business risk everything even their own personal nest eggs in their belief in that their product, service or knowledge is of value to others.

Entrepreneurs are the ultimate altruists. They are the most purely other-centered people on the planet. They believe that their ideas will make the world a better place.

To see the economic recovery in action, look no further than your neighborhood.

Advancing the Dialogue

I genuinely believe that most people in the world desire only good thing for their fellow man and are trying to do good. What is disturbing is that we all tend to dismiss any facts that are contrary to our own belief system, rather than investigate them further and resolve the contradiction. To quote Ayn Rand, “Contradictions do not exist. Whenever you think you are facing a contradiction, check your premises. You will find that one of them is wrong.”

As a consultant one of the first things I learn about a prospective customer is if the are open to the possibility that they are wrong. Not that they necessarily are wrong, but just if they are open to the possibility. I will not work with anyone who does not respond positively to this idea. Of course, I reciprocate and state that I am open to this possibility myself.

One of my all time favorite quotes is from a little know business/psychology author named Edwin Friedman. He opens his book A Failure of Nerve: Leadership in the age of the quick fix, with this gem, "The colossal misunderstanding of our time is the assumption that insight will work with people who are unmotivated to change."

He demonstrates how this applies to all levels of human relationships: parent/child, spouse/spouse, neighbor/neighbor, employee/boss, company/company, citizen/government official, country leader/country leader. It is only through lowering our own level of anxiety, thereby increasing our own ability to think creatively and remaining connected to those we hope to change, can any transformation occur.

Advancing the dialogue requires the ability to self regulate your own anxiety level.