Wednesday, September 28, 2011

America is Great Because….

A)  We have great infrastructure; public education and public welfare systems, or
B)  People have the freedom to make and create whatever products or services they want to and are only constrained by their creative energies.

Massachusetts Senate Democratic candidate Elizabeth Warren fired the opening salvo in her campaign against incumbent Scott Brown last week with the following statement:
‘There is nobody in this country who got rich on his own -- nobody. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn't have to worry that marauding bands would come and seize everything at your factory -- and hire someone to protect against this -- because of the work the rest of us did.
Now look, you built a factory and it turned into something terrific, or a great idea. God bless -- keep a big hunk of it. But part of the underlying social contract is, you take a hunk of that and pay forward for the next kid who comes along.’
One wag responded thusly:  ‘Define ‘hunk’’.

Rich Lowry of the National Review responded:  "Focusing on infrastructure as the crucial support of entrepreneurial activity is like crediting the guy who built young Bill Gates’s garage with the start of Microsoft."

This seems to be the fundamental difference between the two major parties right now, doesn’t it?

One side, the Democrats, consistently try to make the case that all we have to do to get out of this accursed recession is to build more bridges, roads, light and rapid rail systems; increase job training programs and keep extending unemployment benefits and we will be ok.

There is hardly ever any mention of the ‘entrepreneurial spirit’; ‘dogged determination’ or even the ‘enlightened self-interest’ (greed) that peppered so many of Ronald Reagan’s speeches and policies.

The other side, the Republicans, disagree. For the most part.  Except for the ones who have used the federal treasury as their personal piggybank to get re-elected by sending pork back to their home districts and states for the past 30 years.

Some try to make the case that having no public works programs or government assistance program is the way to get back to prosperity.  Tax cuts and more tax cuts, they say, will lead to such enormous economic growth that no one will need welfare or economic assistance because everyone will be able to find a job or create one for themselves.

We don’t think it is that clear of a divide between the two schools of thought.  We think the answer needs to be more clearly defined with words that matter rather than words that are used to stir up division and strife.

How about this for a stab at some vestige of ‘reality’, if we can return to this planet for a few brief moments?

The strength and beauty of the American Experiment has always been rooted in freedom.  Freedom for each individual.  Freedom to choose whatever avenue of life, career, interest you care to follow.  Freedom to pursue your goals as long as it doesn’t intentionally harm others.

The essential libertarian message of our Fore Fathers is embedded in the following nutshell:  ‘Your ‘freedom’ to throw your fist through the air ends where my nose begins!’

It is also the essence of the Declaration of Independence in its purest form.  Even with the internal conflicts over slavery back then. ‘All men are created equal’ pretty much trumps everything else in America, doesn’t it?

Capitalism and free enterprise appears to ‘hurt’ certain workers as technology improves and businesses are put out of work.  Think of all the stenographers and clerical typists and White-Out manufacturers who were ‘put out of work’ by the advent of the PC run on Microsoft software.

But consider how many hundreds of millions of people around the globe who have been freed from the shackles of working in a huge nameless faceless corporate building and have struck out on their own because they can do it all on their laptop, PC, IPad or IPhone at home, in the plane or out in the park!

That is ‘Freedom. Version 1000GB.0’.

The Information and Technological Age was all born out of the creative genius of people such as Bill Gates and Steven Jobs of Apple Computer fame and thousands of others.

Did it ‘help’ any that the US government through DARPA funded the development of products such as microprocessors, silicon computer chips and a thing called ‘The Internet’ with federal taxpayer dollars, primarily for the defense and space programs, which are one in the same for all intents and purposes?

Sure it did.  Just as the 363-mile Erie Canal helped double and triple the GDP of the entire nation when completed in 1825.  It was financed with a combination of public and private debt that chewed up close to 2/3’s of all available credit in the US at the time.  But it also returned enormous financial returns to the holders of the stock and bonds of the Erie Canal holding company over the years of operation.

We think, as a nation, we should charge a royalty for any commercial product that is developed AFTER the US taxpayer has footed the bill for all of the enormous R&D costs that eventually become widespread successful products such as microwaves, GPS, even TANG.  (is that still made anymore?)

The revenues that would flow to the US Treasury as a result of those royalties could darn near balance the budget we think.  In an economy of over $14.7 trillion, there has to be at least $1 trillion of residual fees that could be directly traced to US taxpayer investment through the DoD, NIST, DISA, SBA or SBIC programs.

So maybe it is time to re-define the debate between the ‘Lean Forward’ MSNBC view of infrastructure development in America and the FOX News view that all we gotta do is cut taxes and America will regain its economic superiority again.

How about this as a start?

  1. The federal government will only fund programs and projects that will benefit the entire population.
  2. Each and every federal public works project will be funded with some sort of public AND private sector financing to ensure proper oversight and review of the operations by professional managers in the ‘real world’, not just the government.
  3. If a state or locality wants to use public funds to build a Steam Locomotive Museum or a bridge that runs south-to-north up the Mississippi River from New Orleans to Memphis, they can do so…..with their own state and local tax dollars, not federal taxpayer money or federally borrowed money from the Chinese.

Great highways and bridges are essentially Egyptian Pyramids being built without a vibrant risk-taking economic engine purring along to push products through on them by businessmen and women.

Great innovations, products and services can not be sold if we do not have a modern transportation, communications and public safety sector.  They go hand-in-hand, not 100% separate entities. We just happen to think that we will not be able to fund a great public sector unless we unleash the creative and dynamic powers of the American free enterprise system and we do it very soon.

We have to start drawing a very bright line between legitimate ‘national’ interests such as national defense and the Eisenhower Interstate Highway System and the truly ‘not in the national interest’ that can and should be handled by the states and localities.

That might help release the private sector from the crushing burden of having to pay federal taxes for everything we can’t afford any more.

And then maybe, just maybe, we will see the Next American Economic Explosion forming on the horizon.


  1. Pretty much agree with this - with this caveat. Obviously there are necessary and beneficial public works project in the pipeline. But I'm of the mind to just freeze 'em until we can do two things.

    One, deprioritize them from their current politically preferential ranking and substitute a needs-based list.

    Two, remove all references to "must pay prevailing wage" in reference to labor costs for the projects.

    After that, if we can afford them, do them. But since neither of the two will occur, just freeze them longer.

  2. how about this?

    Just re-pave the pock-marked roads we already have!

    In NC, we don't need any more NEW roads...we can get to anywhere from any place at anytime. NC has the second highest mileage of paved roads than any state in the Union other than California.



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