Sunday, August 30, 2009

How to Uproot A Dead Tree: Part One

I remember back to when I was 8 years old and my father would send me out to the family garden to weed. I would walk out to the garden with gloves in hand and start pulling weeds frantically. But you know how it is, sometimes pulling weeds can become a little daunting, especially to an 8 year old. So there I would be, out in the blazing July heat, pulling prickly weeds that made my hands itch. Then I would hear my father walk up behind me and advise, “Son, don't just pull the tops off. You gotta' dig down into the dirt and pull up the root.” I would always despise these words. I would grudgingly respond, “But Dad that'd be too hard and take too long! Can't I just make everything look nice by ripping off the tops?” And he would always respond with those ancient words of wisdom passed down from generation to generation by parents, “Child...don't question me, just do it."
I illustrate this because it is a story that has become relevant to our time. You see, America is the 8 year old child pulling out weeds in the form of economic crisis and financial instability. Today dangerous weeds like unemployment, inflation, and radical marxism thinking are choking the very establishment of our country and transforming the stable ideals our country was built and established on 200 years ago, to unstable principles that have not proven to be successful in any arena. We allow this to happen because we are human beings, we cannot help but be attracted to the easiest and quickest solution. However, I write to pronounce the truth and advise my fellow citizens to dig in the dirt some; pull out our economic crisis by the root, therefore rendering it powerless to return again.
I will outline my critique by first explaining where we are today, specific problems we are facing as a country, and the solutions to solving these problems. Our country is at a turning point in history, in other words stuck at a crossroads. One path leads down to future prosperity and world leadership, while the other leads to constant, re-occurring troubles our country will stumble over not once, but over and over again. Since we are a democracy, we will not hold a few responsible for this decision of which two paths to follow. The only people we can hold responsible is ourselves because in America a majority decides.
Headlines read “Global Financial Crisis” and all we're all in a panic. We have cousins, brothers, parents losing their jobs or retirements funds. Many have lost their retirement completely and now must go back to work for the rest of their lives. If we were to compose a letter to future generations describing our current crisis, what would we write? I believe descriptions might mention our country in the middle of the greatest economic change in history and a national debt which exceeds $11 trillion. It also might include over 75% of married women currently participating in the labor force. This number 55 years ago was 17%! Some might tell of a mortgage meltdown and a government bailout bill. Others might quote the U.S. Department of Labor which estimates today's student will have between 10-14 jobs by the age of 38. All these statistics describe where we are today. These figures, no matter how horrific they may be, are very significant to us today because they show us where change is needed.
One of the most relevant and discussed pieces of news today is the government's bailout plan. In previous postings I have voiced my opinion about the stimulus's WRONG. You see, I am a celebrator and participant of the free enterprise system and because I participate in free enterprise that means the government is not responsible for my or anyone else's future. We are the people who the government is supposed to represent and we need to be the people out there in the economy making a difference. I believe the bailout plan is going to be ugly. A successful business man David Shores forecasts banks are not going to lend and inflation will begin to occur. Where are the trillions of dollars coming from? Politicians are not talking about a tax increase, instead in the same legislation they just raised the debt cap to $11 trillion, meaning they are just going to print the money! You say, well how does inflation affect me? Well you'll notice cereal at the grocery store is always four dollars a box, the boxes just keep getting smaller. I tell people one day you're going to open a box of cereal, pour one bowl out and its going to be empty. This seems outrageous to think, yet many today support the idea that the solution lies in more money. The truth is throwing money at our economy is the same as pulling the tops off weeds. It may temporarily sustain the problem, but it won't make it go away. The root of our economy crisis is not the money, its the mindsets of our people.

Problem #1: “Americans have had an “employee mentality” all their lives and it has been engrained in our minds from previous generations. Few take personal responsibility; not expecting the government to take care of them.”
Here is one of the roots to our current economic crisis. Imagine if only 38% of the U.S. exercised the freedom to vote. This would be devastating to our democracy because it would be that 38% who would run and make decisions for our country instead of a majority. Yet today this same thing is occurring, only 38% of U.S. citizens have become a part of the free enterprise system. You see, you either make money because of the free enterprise system or in it. In it means you work for someone else. If you want to make money from it you have to be apart of it, which means you have to be a business owner. Instead of having only 38% of people exercise the freedom of becoming a business owner, why don't more take part? Prior to the industrial revolution over 90% of this country worked for themselves. 100 years later that statistic has flipped! I believe everyone needs a job for a season of time, but not for the entirety of life. Many think they are playing it safe by working a job for 40 years, then retiring off of a nest egg they built up during that time, however with millions of people losing jobs recently we see really how faulty that system has become, especially for the future generation. Just wait 20 more years when the baby boomers, who are the largest generation in the history of America with over 78 million births put a huge demand on social security and its the responsibility of Generations X and Y to take care of an aging population that is more than double their size! In other words, social secutrity won't exist for future generations!
Today a majority of Americans today have a job where they go to work for someone else, instead of going to work for themselves, thus prolonging the problem. The reason why our country is facing serious financial struggles is because we're allowing the small number of people who own large corporations and big businesses to make all the decisions. We must shake off the “employee” mindset and go out there and exercise our freedom to owning a circle of the free enterprise pie instead of allowing the few to own the whole. Many today are considering the idea of “spreading the wealth” and I couldn't agree more! I am in full support of filling needs of individuals who are in struggling situations financially. Spread the wealth and support the free market! Don't stifle it with government run programs. We live in a country today where every citizen has the freedom and the ability to go out and fill their own needs to whatever height they desire. An article from Reason Online Magazine wrote,

[America's free enterprise system] creates wealth. During the last two centuries, the U.S. became the world's richest nation as it embraced an economic system that promotes growth, efficiency, and organization. GDP tripled per capita from 1900 to 1950; then it tripled again from 1950 to 2000. The wealth didn't just benefit a few. It spread throughout society, 68% of Americans own a home-- the highest percentage on record. Three-quarters of Americans drive their own cars.

You see, there is no need to take money from the rich and give it to the poor. We would have to do that in a system that deprived individuals of their freedom to go out and participate in free enterprise, but that is not America's system. America embraces a free market system which is free of government interference except when it violates personal life, liberty, and happiness. Let us not confuse the current economic crisis as a need to change our economic system. Our economy appears to be heading south not due to a faulty system, but because of rapid changes in commerce and large amounts of debt.
History shows us that every time new technology emerges, old ways of conducting business fall to the side, while new forms emerge. In today's case, that new form of technology is the internet and e-commerce. E-commerce is shopping done over the internet. According to s-curve economics which is simply the study of how markets evolve and move, all markets follow a basic pattern referred to as the s-curve. An s-curve consists of three phases: (1) Pre-ne: slow development of a new idea/technology until it reaches 10% market penetration. (2) Critical Mass: rapid growth phase. Goes from 10% to 90% market penetration, and (3) Maturity: once it hits 90% it starts to flatten. The below figure describes this process.

As the figure illustrates, our economy is shifting in a way it has never experienced in the past. A large majority of all the businesses declaring bankruptcy is due to a shift in commerce known as the e-commerce shift. Examples of this same shift in history are the inventions of the telephone, automobile, electricity, radio, TV, microwave oven, and VCR. In 1999, e-commerce was 0.5% of sales. In 2008, it was 11%. In ten years e-commerce grew 2200%. We must not make the grave mistake of transforming our economy to a form of socialism that has never worked anywhere and has no record of statistical growth just because our way of doing business is temporarily shifting.

Problem #2: “Spending more than you make puts you in bondage.”

According to, the total amount of jobs lost in 2008 was roughly 2 million. In that same year government jobs increased by 250,000. Now we look at that as a good thing; the government is hiring, yay! But here's the problem, increase in government jobs means more money needed for payroll, meaning more taxes for you. The problem is the government thinks the solution to not having enough money is to tax you more and spend it on government. This philosophy of thinking is detrimental to our country. This problem not only lies with the government, but with the people as well. Everyone seems to be pointing both fingers at the government and exposing their loose spending. Now don't get me wrong, I am a strong proponent in strict government spending and less governmental interference in people's affairs, but the fault does not only lie with the government. shows the current public debt held by the people is close to $7 trillion! Compared to intra-governmental holdings of $4 trillion. I believe this shows the real problem is with our people and spending money that they don't have.

Thomas Jefferson warned us about this very situation, he said, “Bankers are more dangerous than standing armies.” Thomas Jefferson! He's been dead a while now! I call them “bank-sters”. I'm not upset with the profession, but I am upset with what they occupy themselves with which is basically loan-sharking and predatory lending which we have all been subject to. For example, how many credit card solicitations would you estimate you have received since you turned 18? Go save a tree for God's sake! Each individual contributes to this escalating figure and we must first stop picking the speck out of our brother's eye, and pull the log out of our own. So today we are seeing the harvest of seeds planted in the past of people who spend more money than they have. It puts not only the individual into debt, but our country as well.

This is what I am suggesting:

Step 1...Be more careful with the money that you do make
Step 2...Live below your means
Step 3...Get out of debt
Step 4...Make more money

Our country has a gross domestic product of $13 trillion dollars and our current national debt is $11 trillion. We are literally almost in as much debt as the total amount of money that moves out there in a year, no wonder we're having financial struggles.

I will post Part Two to this critique in the days ahead!
In your humble service,
Silence Dogood


  1. Wow, Jake! You have a very great blog, and are quite intelligent beyond your years. I am happy to be the first follower of your Blog! Take Care and keep up the wonderful work, you sure know your history and it's very interesting to read! I used to dig weeds when I was little, and I still do today! God Bless.

  2. Thanks for the comment Bunni! I just found out we're both windy city folk! Nice =) we have our work cut out for us as far as politics are concerned!