Yesterday’s Wisdom Applied to Today’s Problems
- 4 January 2009 by Author 0 Comments
Yesterday’s Wisdom Applied to Today’s Problems
By Richard Larsen
Published – Idaho State Journal, 01/04/2009
With the plethora of wise men and women who have preceded us in this mortal sojourn, perhaps this time of transition provides an opportune time to review some of the astute and prudent insights offered by great minds from previous generations. Certainly some of the challenges facing our nation and our society this coming year can be seen through the lens of proven wisdom. In this light I thought I’d cherry pick a few of those quotes that have been validated by history to provide a little sagacious insight for the context of what our politicians are threatening to do for the next few years.
Winston Churchill once declared, “For a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.” With all the talk of our incoming politicians intent on increasing taxes, creating up to an additional trillion dollars worth of stimulus (national debt), and a massive infrastructure building program to “stimulate the economy,” (more national debt) Churchill’s statement seems, well, “Churchillian.”
Unemployment stands currently at 6.7%, and most economists anticipate it could rise to 8% before it begins to stabilize. That could be another 2.5 million lost jobs before the hemorrhaging stops. That’s the same number the new administration has declared they want to create with a New Deal type rebuilding program. I just have a hard time visualizing all those unemployed bankers and wizards of Wall Street out there building bridges and highways.
Racking up more federal debt will not apply the desired tourniquet to the jobs hemorrhage. Even after the stock market collapse of 1929, and the depression settling in by 1931, our nations’ biggest industrial collapse actually occurred in 1937, five years into the New Deal of FDR. In 1939, after a full decade of frantic federal spending, unemployment was still over 17%. FDR’s Treasury Secretary, Henry Morgenthau, lamented, “I say after eight years of this administration we have just as much unemployment as when we started.”
I think Churchill was correct. Government can’t create an economy. The best thing government can do is create an environment that is conducive to growth, with reduced taxes and a regulatory environment that facilitates private sector growth.
George Bernard Shaw, although a self-avowed socialist, was nonetheless bright enough to observe, “A government that robs Peter to pay Paul can always depend on the support of Paul.” Reviewing the electoral map by county of the last election lends tremendous credence to Shaw’s observation. With few exceptions, counties heavily dependent on the public dole voted for the incoming administration, while those not dependent went the other way. The square miles of land won by the new administration were 580,000, while 2,427,000 voted the other way.
In his inimitable cynical style, writer and journalist P.J. O’Rourke once wrote, “If you think health care is expensive now, wait until you see what it costs when it’s free!” With talk of providing universal health care, the financial costs to the nation of essentially nationalizing 1/5th of our economy are staggering. All this expense providing health insurance for the approximately 10% of our citizens who don’t have it! There has to be a better way.
The “great communicator” Ronald Reagan, observed the practices of government, and summarized, “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” If that doesn’t capture the mindset of our current congress, even in light of our economic conundrum, I don’t know what does. But if we’re going to emerge from this recession any time soon, that mindset has to be altered. Washington is on the cusp of becoming another Detroit, New Jersey, or New York, all of which have been in economic thralldom because of that mentality.
Thomas Jefferson warned over 200 years ago, that, “A government big enough to give you everything you want is strong enough to take everything you have.” It appears increasingly that’s the kind of government we’re headed toward. He further warned, “My reading of history convinces me that most bad government results from too much government.” This bodes ill for us all with the increasingly strident notion that the government should regulate every aspect of our lives, from what we drive and what we eat, to how much energy we consume.
Perhaps the best idea for governing, however, was uttered over 2000 years ago by Cicero. He said, “The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance.”
I wonder if Roman leaders wish they would have listened to him. It’s painfully evident that ours won’t.
Richard Larsen is President of Larsen Financial, a brokerage and financial planning firm in Pocatello, and is a graduate of Idaho State University with a BA in Political Science and History and former member of the Idaho State Journal Editorial Board. He can be reached at firstname.lastname@example.org.