Miscellaneous Essays

Obama Versus Romney Who Will Win? And Does It Matter?

No Comments

Over the past several weeks, readers have expressed their interest in the upcoming presidential election and its impact on America’s future. More particularly, many readers see this election as a contest between freedom and capitalism and some newfangled version of socialism… and they are worried that if Obama wins, they will become a lot poorer.

Well, here’s what I think. As far as your financial future is concerned, it doesn’t matter who is elected. Despite differences in ideology and rhetoric, our next president will take essentially the same path in terms of “saving” the economy.

I’m not saying that there is no difference between the candidates’ economic views. Obama wants to redistribute wealth. Romney wants to diminish social spending. But neither of them will make much long-term headway at realizing their ambitions. What they will succeed at is what both Republicans and Democrats have been doing nonstop since World War II: expanding the federal government by increasing its debt.

I’m not an economist. In analyzing our country’s economic policies, I take a businessman’s perspective. Businesses have many goals, some altruistic and some selfish, but they are all ruled by the logic of the balance sheet. Without a positive balance sheet, no business can last.

The Economy Is Out of Control

Our economy, I’m sure we can agree, is in ruins, and our federal government has unprecedented levels of debt. On top of our outstanding debts, we keep spending more money than we’re taking in. But only a partisan fool would suggest that this is due to Obama. The national balance sheet was already $9.9 trillion in the red when he took office. He has done a good job of pumping that up to $15.9 trillion. But had McCain been elected in 2008 we would be in roughly the same place.

The reason for that is simple. Every modern-day president knows that his only chance of being elected or re-elected depends on the economy. If the electorate believes that the president is “doing a good job” with the economy, it will re-elect him. If it believes he has made things worse, it will elect his opponent, who will be arguing that he can fix it.

But today there is no way to fix the economy.

Continue Reading

Miscellaneous Briefs

Van Gogh and the Protestant Reformation

No Comments

Van Gogh would never have been the unique genius he was, Rene Huyghe argues in Van Gogh (a monograph in the Crown Art Library series), were it not for the Protestant Reformation.

This is a stretch but it is not absurd. I’m talking about the effect of the Protestant Reformation in secular terms. We normally think of the Protestant Reformation as a religious movement – an effort to reform the bad practices of the Roman Catholic Church and/or break away from the dominance of the papacy. But it also gave people the idea that they could think for themselves.

One of the primary issues on the reformist agenda was the “right” of individuals to be able to read and interpret the Bible. Until then, church ceremonies were conducted in Latin and, except for songs, recited silently by priests. Churchgoers had no idea what was being said. This suited the clergy since their knowledge of the Bible gave them power.

One of the great ideas of Luther and his fellow revolutionaries was that every man had the God-given right to draw his own meaning from the Bible. By seeking to put Bibles into the hands of ordinary people and eventually have the Bible translated into English, the reformists were providing an extraordinary tool for individual liberty and creativity.

Continue Reading

Miscellaneous Essays

Hidden Dangers in the National Parks

No Comments

K and I are spending a few days at the Mammoth Hot Springs Hotel in Yellowstone National Park.

The hotel is run by a private operator that has, our tour guide told me, a long-term concession from the federal government. That pretty much amounts to a government-run business, so I wondered what it would be like.

From the outside, the old hotel was inviting – a rambling, wood and stucco building painted lemon yellow and set among pine-covered hills. Just a few hundred yards away were the oddly beautiful hot springs that looked like the dark side of the moon.

Once we stepped inside the hotel, that inviting feeling began to evaporate.
The lobby was an undecorated box of a space, randomly “furnished” with small, cheaply made booths. One booth sold coffee and cake, one was covered with brochures, one sold souvenirs, and another turned out to be the reception desk. In between the booths, people of every ethnicity (presumably patrons of the hotel) sat at formica tables.

I took it all in, thinking, “Whoever designed this place must never have been inside a beautiful hotel.” (In fact, I wondered if he had ever been in a hotel at all.)

“Perhaps the lobby is being renovated,” I told myself. “The rest of the hotel must be fine.”

After spending 15 minutes acquiring our room key from a pleasant young woman who didn’t seem familiar with the computer she worked at, we set off for our room. I was happily anticipating a quaint mini-suite with spectacular mountain views.

My anticipation dissipated in the hallway – an eerily dim corridor that had been spray-painted with that pebbly paint that was so popular in the 1970s. Ugly, incandescent lamps illuminated the ancient plumbing that ran along the ceiling. Doors peeked open as we passed. The experience was disturbingly reminiscent of The Shining, where Jack Nicholson prowled a similarly creepy hotel.

Continue Reading

Miscellaneous Briefs

Three Rules of Wealth Distribution

No Comments

Three rules of wealth that everyone should memorize:

1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.

2. The government cannot give to anybody anything that the government does not first take from somebody else.

3. You cannot multiply wealth by dividing it.

Continue Reading

Miscellaneous Essays

How to Get a Good Job Now… Even If You Are Fresh Out of College

No Comments

 

Liam O’Reilly, a recent graduate from the University of Maryland, told The New York Times that he had applied to 50 employers. He was looking for a job as a paralegal or as a researcher for a policy organization or as an administrative assistant. He got a few interviews and no offers. So he took a minimum-wage job selling software.

“Had I realized it would be this bad,” he said, “I would have applied to grad school.”

My Number Three Son was due to graduate this year. But when he got accepted into a five-year BA/MBA program at his school last month, I encouraged him to do it. Like Liam O’Reilly, his prospects for employment are limited. They might not be better next year, but at least he can approach the market with another year of learning and an MBA to boot.

In 2006, when I wrote Automatic Wealth for Grads… and Anyone Else Just Starting Out, the economy was still bustling, American businesses were going strong, and unemployment was low.

Back then, any kid fresh out of college could have his pick of good jobs in preferred locations with plenty of perks.

Today, the economy is a mess, businesses are floundering, and unemployment is record high. As a result, college graduates are taking what they can get.

Many, not finding jobs, are forced to continue living with their parents.

(The situation is considerably better for kids with engineering and computer degrees, but otherwise the landscape looks bleak.)

Recently, I received this e-mail from a young reader:

“My name is Eric Ryczek. I am a sophomore at Drake University in Des Moines, majoring in International Business and Finance.

“I am currently reading your book Automatic Wealth for Grads — which my uncle bought for me as part of my 18th birthday/graduation present — and am loving every minute of it. And last week, he forwarded me an excerpt from your book The Pledge, and I am eager to read the rest of it.

“But I’m wondering if I am still too young for The Pledge, even though I am trying to do everything I can and gain as much knowledge as I can now to invest in my future. And I am hoping you will tell me that the book is beneficial for anyone, no matter how old they are.

“I know you have millions of e-mails to respond to, so if I do not get a response I will purchase the book anyway. I think it will be a good investment for my future.

“Hope to hear back from you.”

I’m worried for Eric’s generation. They are facing, without a doubt, the worst job environment since the Great Depression.

The economy is in shambles and, despite what the government is saying, it’s not getting better. In fact, it will get worse. Possibly a lot worse.

Continue Reading

Miscellaneous Briefs

Sweet and Savory

No Comments

I’ve heard it said that the best way to classify wines is to put them in one of two categories: sweet or savory.

California Pinot Noirs, because of their fruitiness, are sweet.

Old school Bordeaux and Barolos are savory because of their earthy flavors. So are Rieslings.

California Chardonnays and dessert wines are sweet.

Continue Reading

Miscellaneous Essays

Being Happy

No Comments

Most people, when confronted with an obstacle, suffer some degree of shock and dismay. Even if they don’t consciously acknowledge the problem, their bodies respond in ways that make them less capable of bouncing back.

You may find it interesting to know, for example, that scientists have found that testosterone – the hormone that drives us to work hard and win – actually drops measurably in people who run into unanticipated problems. This clues the body to move into a defensive mode. We feel the impulse to slow down or shut down or run away.

Sophisticated scans have shown similar responses in the brain. The pleasure center becomes less active, as do the parts of the brain that promote the will to act and take risks.

Our bodies are designed to be energized when things are going well. But when things turn against us, they are programmed to retreat.

These are deeply ingrained instincts. Evolutionists tell us that we developed them in order to survive life-threatening situations such as famine, extreme cold, and attacks by predators.

And though these retrenching responses are necessary for survival when the threats are mortal, they can work against us when the challenges are less serious.

That is why we so often feel defeated by soluble problems – the sort of problems we run into when we attempt to enhance our lives and build our careers.

Continue Reading

Miscellaneous Briefs

When Great Men Lie

No Comments
Ray Kroc, McDonald's Mastermind

When entrepreneurs reach the pinnacle of success, they are often asked to explain how they got there. When they do, they usually lie. They attribute their success to luck and the people around them. They pretend they were simply along for the ride.

They lie in order to appear humble. But there is no virtue in modesty when it is misleading. The truth is that, with rare exceptions, entrepreneurs do not believe in luck. Luck, they know, is what gamblers count on. And entrepreneurs do not gamble. Instead, they take calculated risks. They are always looking for the best risk/reward equation. If they had their druthers, they would take no risk at all. But they know that their job is to create newness and newness brings with it some risk. Most of their thinking is devoted to reducing risk, not gearing themselves up to take more of it.

Some quotable mendacities:

  • “I attribute my success to two things. I am not afraid of taking risks – big risks. I prefer to take big risks because that’s the only way to score big returns.” (David Paschal, president of Paschal Petroleum Inc.)
  • “Every time we’ve moved ahead in IBM, it was because someone was willing to take a chance.” (Thomas Watson, CEO of IBM)
  • “Risk is the force of entrepreneurship – because where there’s risk there’s also a reward.” (Karl D. Bays, chairman of Baxter Travenol Laboratories.)
  • “Entrepreneurs are risk takers, willing to roll the dice with their money or reputation on the line in support of an idea or enterprise.” (Victor Kiam, president and CEO of Remington Products)
  • “If you’re not a risk taker, you should get the hell out of business.” (Ray Kroc, McDonald’s mastermind)

The other way entrepreneurs lie is to pretend that they were motivated by noble thoughts and never compromised their ethics.

Continue Reading