In the segment of the financial planning industry that caters to the uber wealthy, the rule of thumb is that by the 2nd generation 70% of family fortunes are lost and by the 3rd 90% is gone. Why? “Most of them have no clue as to the value of money or how to handle it.” Financial wealth is not so different than freedom and Thomas Jefferson knew it: Eternal vigilance is the price of liberty.
The United States has thankfully lasted much longer than 3 generations, but the writing is on the wall and the election of 2016 is proof.
On one side of the debate we have Bernie Sanders and Hillary Clinton. We have two people who have zero experience in doing anything even remotely productive in the private sector in their lives. Bernie Sanders has virtually zero experience in the private sector as most of his many short lived jobs being for public or government institutions of one sort or another. His first steady paycheck not coming until he was 39 when he was elected Mayor of Burlington, VT. He’s never started a for profit company, he’s never ran a business that had to actually make a profit and meet a payroll… He’s never had to compete to attract consumers who are willing to freely exchange their hard earned money for a free market good or service he is providing. And, if it’s possible, Hillary Clinton has even less private sector experience.
Both of the people running for the presidency on the Democrat side have spent essentially their entire lives working in the public sector. As mayor. As congressional aide. As Congressman. As First Lady. As Senator. As Secretary of State. All of these jobs are funded by the taxpayers and in both cases their passions have been fueled by the desire to use the police power of government to bend the public to their will… in the service of good of course.
Donald Trump on the other hand has never had a job in the public sector. He’s been a builder and developer his whole life. He’s also been an operator of casinos, a reality TV show star, the leader of an eponymous university and he’s lent his name and likeness to countless products. While he parlayed his father’s $1 million loan and influence with bureaucrats into becoming a very successful real estate developer and reality TV star, the rest of his repertoire has been… shall we say, less than successful. But at the end of the day he’s a billionaire and that’s largely due to his real estate success. Not surprisingly, in that – real estate – Donald Trump has been in bed with government just as much as Bernie Sanders and Hillary Clinton. From using government tax handouts to finance buildings to using government sanctioned bankruptcy laws to threaten and blackmail erstwhile partners, Trump’s real estate success has been built on a foundation of government intervention… and everything else is built off of that. But at least he knows about meeting payroll and attracting customers who have a choice as to where to spend their money.
The fact that America has selected these three big government candidates as the only viable options for the White House tells you everything you need to know about America in 2016. Like the 2nd and 3rd generations of wealthy families, an overwhelming majority of Americans are more interested in what someone else – the government in this case – can do for them than what they can do for themselves. An overwhelming majority of Americans have no idea of what made America great in the first place. An overwhelming majority of Americans don’t understand exactly how close the nation is to killing the goose that laid our golden egg.
Half the population is prepared to vote for a socialist wannabe Hillary Clinton or the actual socialist Bernie Sanders. Their basic premise for governing is simply more regulation on businesses and individuals, more illegal immigration, higher taxes on the rich and more redistribution programs for the poor. Absolutely nothing in their positions suggests anything about helping businesses be successful. Nothing suggests freeing up capital or entrepreneurs to start the next big revolution. Nothing suggests driving down the cost of business so that companies can innovate, hire more employees and offer yet to be invented goods or services to the public. No, for Hillary Clinton and Bernie Sanders everything is about what the government can do for you or will do to someone else.
A significant portion of the remainder of the population are prepared to vote for Donald Trump, a crony capitalist of the highest order. The problem with crony capitalism is that it’s not really capitalism at all… it’s coercion of others by the state for the benefit of friends of bureaucrats and politicians. Whether it’s Vegas’s tax breaks for the billion dollar NFL or Georgia’s tax incentives for Hollywood movie production or the Agriculture Department’s subsidies of corn or sugar or peanuts, it’s all crony capitalism. So too is it when banking or broadcasting or healthcare regulation becomes so onerous that they stifle competition and innovation because only the ultra rich friends of government can afford to pay the compliance costs.
One way or another it’s always taxpayers, small businesses and average citizens who are left holding the bag for government decisions where bureaucrats and politicians put their personal or political agendas ahead of individual freedom and free markets. Fundamentally this is because so many Americans simply don’t understand that a government can’t produce prosperity, it can only stand in its way. That a government that can take something from someone else to give to you today can just as easily take from you to give to someone else tomorrow. That a government that can write rules that favor you today can turn around and write rules that handicap you tomorrow. One need look no farther than Cuba, Venezuela, Spain, France or Greece to see what such government strangulation of free markets and free citizens does. Economies that stagger from one crisis to the next. Widespread unemployment. Flatline economic growth or outright decline. Unrest in the streets. Such things are the hallmarks of big government.
And the truth is, supporters of the three contenders for the presidential crown have no clue how prosperity ever came to the United States in the first place. American prosperity dominated the world in the 20th century like perhaps no other nation has in all of human history. While China and India may have had a larger share of world GDP two millennia before, the 20th century saw world GDP grow more, and more broadly ever before, and growth was driven by the United States. More than anything else, that American Century was characterized by freedom where government – mostly – left free markets to solve problems and innovate a wider array of new products and services than the world had had ever seen.
Those times and that leadership are long gone and they may never return. Beginning with the trickle of the New Deal and picking up steam with the Great Society programs, government regulation and redistribution policies began to strangle the American economy by the end of the 1970s. It was on life support when Ronald Reagan was able to revive it with spectacular success. Since then however it’s largely been downhill. From George H.W. Bush to George Bush government regulation continued to grow year after year. Bill Clinton took advantage of the “Peace Dividend” to grow it more in between. Under Barack Obama government regulation and strangulation of the economy has advanced at an unprecedented rate. And the economy has shown it. During Ronald Reagan’s first 7 years the GDP grew at an average of 3.4%, during Clinton’s it was 3.84%, Bush’s 2.46% and under seven years of Barack Obama the American GDP has grown at a stultifying 1.4% a year… and this is during a period when $10 trillion was added to the National Debt and the Fed pumped in an additional $2 trillion! (BEA data in Excel)
And so it goes… like the wastrel children and grandchildren who blossom under fortunes built by someone else and proceed to lose those very fortunes, Americans have lost their way with prosperity and may not find it back. National prosperity demands freedom. Prosperity for the many demands free markets. Widespread prosperity demands limited governments. But rather than look for a president who will roll back the suffocating leviathan of government and unleash free markets and entrepreneurship, Americans are instead choosing to support candidates who offer to use the power of government to tilt the scales towards them and their friends at the expense of everyone else.
The sad thing is, it’s not like that choice doesn’t have a clear outcome. It’s been tried over and over again around the world and it always fails, every time. And it will fail here too. The question is, is a fiery collapse that resembles the likes of Venezuela in our future or is it the slow calcification of France or Greece where the government slowly strangles the citizenry to the point where practically nothing works and eventually the nation begins to simply implode? In either case as the consequences of the disastrous 2016 election begin to play themselves out over the next couple of years Americans should be prepared to find themselves involved in more wars, experiencing more economic failure, buckling under more government regulation and enjoying less freedom of all types, particularly speech. Add to that more racial division, riots, crime and ultimately, much more despair and distrust of the system. Such are the conditions of revolutions, the hot ones, not the ballot box types…
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Weathly enviromentalists finance these eco-wacko nature freaks and Red Ted Turners just one of them
We have wound up with Trump because the Republicans cannot come up with the formula that can sell policies which would make your hard work pay greater dividends when the competition is selling, “Work is for suckers. Vote for me and you’ll get it all for FREE!!”
300 million people in the USA and these 3 are the choice, this is the best we all can do? PFFffft
Vince, Thoughtful analysis. Well worth the read.
My criticism is that you failed to make the case that business experience makes for great leaders. Hillary Clinton worked as a lawyer. So did Abraham Lincoln. To my knowledge, Lincoln, the Roosevelts, Winston Churchhill, and so many others of the greatest political leaders in history lacked the sort of experience you deem essential. Some notable founding fathers were slaveholding plantation owners. I don’t know if Washington or Jefferson ever met a payroll.
It’s an interesting proposition you advance, but I think that you could strengthen you argument by comparing and contrasting political leaders with and without “real world” business experience.
Ronald Reagan is yet another respected President who lacked your background credentials.
Larry Weisenthal/Huntington Beach CA
@Larry Weisenthal: Actually, while I would suggest hands on business experience is important, it’s not critical. Ronald Reagan possibly being the best example you mention. What is important however is an awareness that government is not only not the solution for everything, it’s more often than not the problem. An awareness of the importance of limited government is critical however. That is the fundamental problem that the nation faces… a misunderstanding of how prosperity is created. It’s the result of the combination of free people and free markets. Both of those are under attack from the Democrats and the establishment GOP. It is only someone like Ted Cruz or Mike Lee, guys who fundamentally understand that smaller government means more prosperity because it gives entrepreneurs and innovators the freedom to experiment and work to make better widgets or invent new ones.
One would think in all those words I would have conveyed that…
He’s an accomplished pitchman. People thinking about voting for him should ask themselves exactly what it is that he’s selling.
Trump University Customer: ‘Gold Elite’ Program Nothing But Fool’s Gold
While there has been some question as to the original source of this quotation, it is appropriate for this occasion:
It’s beginning to become quite clear the upcoming election will the last. If trends play out as expected, and Trump continues to inflict damage on his own campaign as he is doing the left will assume the reins of control and drive the nation into the dust. Any further elections will be farcical shadows of previous contests or the nation will split apart.
@kitt: That has been my assessment as well, this many fine citizens and we have to chose between those two?
@Greg: He’s an accomplished pitchman.
Yes, and those who support the man should wonder if they are being scammed as the people who went in for Trump U:
@Tor: Interesting web site, Tor.
Lawyers.
I learned from it that the Trump legal team cannot ask for recusal of the judge ”based on race.”
But I never thought they would.
Status, such as race creed or color cannot be a crime in this country.
Conflict of interest, otoh, might well be what his legal team uses IF they go the recusal request route.
Conflict of interest because the judge is on a committee to pick illegals for scholarships to law schools.
Those illegals would not be eligible for scholarships were Trump president.
They would be eligible for deportation.
So, the judge, throwing in his lot with this particular scholarship fund is in conflict with being unbiased about Trump in any case.
And, that’s not saying he hasn’t done fine work against drug cartels in the past.
Open borders keep him in business in that respect.
Trump’s wall would force him into other avenues of cases.
Again, a conflict of interest.
Spoiled little snots gave up their safe space when they left their playpens now they want to go back but their safe space was sold in a yard sale years ago
Trump does not define the melieu he has to live and work in, that has to do with the NYC Soviet (council) and other states. THEY define this, and to not take advantage of it if offered would be STUPID… also, if he did, he would not be in the position for someone to call a person a crony capitalist…
By a similar concept, anne frank was a nazi, cause she lived in that time and place, right? or was she something else and had no choice as to how she went about her life hiding or not? perhaps some would say she shouldnt have hid and so should have stood tall in public against the regime, even as a child… but why?
when in rome, do as the romans do, which is defined by that states politics
same as with china… because the state is communist does that mean all the people are?
its quite childish to say crony capitalism (which is fascism) and then blame someone like Otto Schindler for having to make their way in that system that they cant define, cant avoid, cant oppose, and would be to the detriment.
yes, they would rather NOT have to deal with such a system, but they do not define the game, the fascists do, and they control the means of production with regulations, inspections, licenses, zoning, and then using that to extort money from builders, or else their union friends will do what to the builder?
you see them as giving him a break, he sees them as lowering his profitability, raising his costs, forcing him to hire people who then thank the council, and then they give him SOME money back, which you think is a bribe. but if you take 100 million away from a developer, and give him 50 million back in a lump sum, are you really giving away the 50 million? or have you just taken 50 million from a capitive who has no choice but to include low income housing in a building they are making, who HAS to hire union labor at double the cost, who HAS to donate to the party or the party will move against them, etc…
its really inane for people to blame the victims of such and think they are part of it when what they get back is not even near what they are losing that is more complicated to view
@Artfldgr: Your comment reminded me of Kafka’s Metamorphosis.
“Kafkaesque” evokes an individual’s sense of finding himself victimised by large impersonal forces, feeling after a while that he can’t but take it personally – and feeling haunted, too, by the sense that maybe, after all, he deserves it.
Re-read The Diary of Anne Frank and see how she sometimes felt like giving in and simply walking out to be arrested, or that she somehow deserved what was going on in her life.
I watched my FIL go through all sorts of hoops with the VA. They dragged their feet, he slowly died. But he always felt they were doing it all ”by the book.” So, I guess his lack of getting his meds in a timely manner so as to have survived his ailment was deserved, somehow.
Excellent take on the current state of affairs, Vince. When talking about generations, I recently talked to a millennial (one who is fortunate enough to have a decent job) who has a pessimistic view of being able to “get ahead”. When I tried to explain to him that this “recovery” is not like past ones and that in the past when we came out of a recession, the growth rates were much higher and people could find good paying jobs with benefits, he gave me a blank stare as if not to comprehend. It’s easy to see why. All they’ve experienced is one recession and one recovery. All they know about the recession is that it was Bush’s fault because that’s what they’ve been told in school and by the MSM. They don’t know about natural economic cycles or the impact the housing policies of the 90’s had in making the recession much worst than it normally would have been. Combine that with their generally spoiled, sheltered upbringing and it’s easy to see why they embrace socialism, a dead end street. Given they are our future, we don’t have much hope. I put most of the blame on my generation, the Boomers, for turning focus away from real world issues onto feel good issues like saving the planet from man before he drowns the world because of manmade global warming or making sure a man can pee in a women’s bathroom because they feel like a woman at the time.
@Greg: But even if Trump’s credentials are something to dismiss, they far outweigh the credentials of Barack Obama in 2008. After almost eight years of the worst presidency ever, it’s refreshing to see the masses at least go for someone with an iota of leadership experience, rather than a professional golfer and talk-show guest.
After Obama, Greg, you really can’t find any real faults with any of the candidates. Anything goes now.
The above quote is Obama to a tee, I agree. It’s sad to see a few still riding the Obama train, not understanding it never left the station. Those free-thinking rationalist posed the above question to all those duped by Obama’s demagoguery years ago. So sad that some education was lost, and now those same uneducated souls are projecting logical arguments against Obama as illogical arguments Trump. The mass psychosis is chilling, and very sad.
What’s left is Hillary, and she is firmly unqualified to sit in the Oval Office, as polls and the public have agreed to. It’s Trump’s White House already, for good or for ill. Beyond not catering to liberal entertainment needs, there’s not any rational argument to pose Trump has less real experience compared to Obama, even now.
But good for you, it’s not over yet. The liberal insider complex planned years ago to use Obama to rig the election for Hillary, or at least use the propaganda outlets to heavily sway voters. Too bad liberals don’t even like Hillary, but that won’t stop the white racist bigot Billionaires from buying another election for the Dems. I dream of a day when the violent liberal racist bigots will see their folly, and start to join the movement to heal our sick world.
Are you ready, Greg? Are you ready to grow and learn something new, something that may feel uncomfortable, but break you out of the cycle of hatred you’ve been pulled into by rich 1% liberal Billionaires? The world needs people who start saying “no” to the oppressors and break free of evil men and women like Obama and Hillary. Will you stand tall, or submit to maintain the false feelings of elitism you now enjoy?
“Conservatives” and “non-liberals” are not your enemy, Greg, and no matter how right you feel in suppressing they’re beliefs, you’re wrong in doing so. Stop the hate and learn to think for yourself. Besides, leftism is dying very quickly in America, and the only things propping up the perception that it’s booming are the violent and nefarious elements that won’t seek harmony but prefer hostile conflict, no matter what.
To quote Portlandia, “It’s over!”
Like shell-art.