"Time to Come Together"

Our country is facing many challenges. For many, including myself, there is much concern over the recent election of Barack Obama. What direction will he take our nation? What condition will he leave our country when his term in office ends?

We must unite as Americans to address these challenges. We cannot afford to be remorseful, but rather we need to be keen and share our voice with others. Perhaps this is an opportunity to open the American eyes to how socialist policies are not the path to U.S. global economic leadership but a path to global economic complacency. This could be what the United States needs to quell the desire for far left policies and restore an America based on its founding principles.

There are some things we can do. First and foremost, we can pray for our nation. As our country is moving in a direction to further separate our religious convictions from national policy, we can pray that our nation's true values will survive the far left's governance.

We don't often think of it, but a branded memory from my childhood education was saying the "Pledge of Allegiance" every morning. That is only one generation away from being forgotten! Not that saying the "Pledge" will save our country, but if reciting the "Pledge" is wrong as it has been deemed, what subtle changes can we expect in the future?

Second, we must listen to understand! I can even admit at face value that liberal policies seem attractive. Giving money to those who need it most, providing free health care to everyone, and giving everyone a college education are good things! They are... at face value! But we must communicate the consequences. Many of there arguments end here... at these face value statements. Look at many press articles and liberal activist statements that support these policies. Notice they don't include solutions and most do not understand the economic implications.

We can listen. We can understand. And we can explain the economic consequences of these actions.

In "An Age of Turbulence,"Alan Greenspan spoke on capatalist economics in Moscow to an audience of socialist economists in the early 1990's. He was surprised by their conceptual understanding of capitalism that was evinced in the follow-up question-and-answer session. Later, he engaged one of these economists on his knowledge of capitalism. The economist replied that economics is a science of numbers, formulas, and solutions. There is truth and freedom in numbers. He was implying the political freedom of economics.

Last, become active in communicating these values. We have many opportunities for this type of discussion. Let's take advantage of them. There were once times in this country that these were the only issues at the table. Now, it seems they have been taken completely off the table.

I will begin blogging about what will happen to our country in many respects under a socialist regime. Topics on the table include education, health care, taxes, along with many others. Perhaps these can serve as some tools based on facts to communicate your positions. As always, I would appreciate your continuous feedback.

"Incentives Matter"

Nearly every decision we make is driven by incentives. Why do we go to work? To receive a check every two weeks? Why did we spend $40,000 on a college education? Surely, because we believe it’s a good investment in the long run. What happens if these incentives were taken away? What could you expect to see in our economy?

In "An Age of Turbulence" Alan Greenspan recalled visiting the Soviet Union. At the time, the Soviet Union was an economic superpower and the two great competing economic theories were still in the midst of the Cold War. Greenspan recalls the Soviet finance minister assigning a senior aide to him with the task of explaining the centrally plan economic system.

Greenspan noted the complex and mathematically sound algorithms the Russians used to interpret their economy. He noted their "dazzling" mathematic capabilities. He remembers leaving the Kremlin in 1989 and seeing a farmer driving 1920 model steam tractor. He asked a security official, "Why do you suppose they still use that?"

Thinking little of it, the official said, "Because it still works?"

There was a similar conundrum after the fall of the Berlin Wall between communist East Germany and the democratic West Germany in 1989. In terms of GDP, East Germany only lagged West Germany by 15% to 25%. However, according to Greenspan, visiting both nations evinced a much larger difference in the standards of living. West Germany was at the leading edge of technology and East Germany was lagging. For example, there was a significant difference in the 1950 Mercedes and one built in 1988 in West Germany. However, the East German Trabant hadn't changed its design in over 30 years! East Germany never had the incentive to change in a centrally planned system.

There are many incentives to work: to provide for your family, to purchase property, to have health insurance, etc. To have increasing work opportunities, many spend longer in school to increase the probability of securing the many benefits of work. However, if these benefits are given away, truly how valuable are they?

If your idea of the "American Dream" is to earn property, health insurance, and a high quality of life, then perhaps you sacrificed dearly to earn an education and increase the probability of having these things. The sacrifice could be in time, long hours of work and studying, or a hefty student loan. If the government gives these benefits away for free - in the forms of wage increases, health insurance, or education subsidies - it discredits what you have worked so hard for. We will lose incentives to create the best, to provide the best, and to be the best.

-Reflection from "The Age of Turbulence" by Alan Greenspan