The most progressive and profitable economic system in world history is based on human behavior and lies behind the ancient wisdom of the scriptures. It was first expressed best by the Classical Economists who emerged in the Enlightenment(1650-1800). That “Age of Reason” applied the new scientific reasoning to the study of Human Nature and found universal truths as reliable as the Laws in Nature only recently explained. These scholars(Locke, Rousseau, Smith) gave us the Contract Theory and the Separation of Powers in government and the principles of property rights and free markets. Adam Smith published the Wealth of Nations in 1776 and was as central to America’s success as Jefferson’s Declaration. The root truth is that Man’s nature is essentially self-interested, looking out for #1. What’s in it for me? He wants to accumulate possessions(i.e.capital) for his pleasure and protection. Blind self-interest would have him take from others with ultimately destructive results. “Enlightened self-interest” would have him trade or barter his labor or currency with others for something they have he wants. Transactions only occur in this “free market” when both parties are “Mutually Satisfied.” Hence all are benefited as if “some invisible hand” lifted society. The Free Market is not based on Greed but TRUST between the negotiators.

Prices, Wages, and the swing of the economy are all then governed by other universals, e.g. the Law of Supply and Demand. Eventually, inequities are dealt with since everyone plays by the same rules. What would really mess it up? When an overwhelming authority like the King would dictate prices to benefit his favorites. The motto of the French Physiocrats(“let nature rule”) was laissez faire, le monde va de lui-meme. “Leave it alone. The world goes on of itself.” The Free Enterprise system that made America exceptional was based on property rights, free markets, and minimal government interference. Modern statist ideologies like Marxism are threatening all of that. Class warfare and redistribution of the wealth through taxing some and “entitling” others are destructive of all.

About the time our original thirteen states adopted their new Constitution in 1787, Alexander Tyler, a Scottish history professor at the University of Edinburgh, had this to say about the fall of the Athenian Republic some 2,000 years earlier:

“A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover they can vote themselves generous gifts from the public treasury. From that moment on, the majority always vote for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship. The average age of the world’s greatest civilizations from the beginning of history, has been about 200 years. During those 200 years, those nations always progressed through the  following sequence:

1. From bondage to spiritual faith;

2. From spiritual faith to great courage;

3. From courage to liberty;

4. From liberty to abundance;

5. From abundance to complacency;

6. From complacency to apathy;

7. From apathy to dependence;

8. From dependence back into bondage”

Alexander DeToqueville said about the same thing fifty years later after visiting the USA. More recently, Joseph Schumpeter, the famous Austrian economist, saw the same cycle in another way.. In his  Capitalism, Socialism, and Democracy he recognized that in advanced capitalist economies, once a wave of industrial expansion is over, entrepreneurship will cease to exist and will come to be replaced by socialism. His reasoning: In advanced economies, when innovation and entrepreneurship have led to massive wealth creation, the less fortunate begin to despise the wealthier classes (even though the wealthy may have created the jobs that helped drive the economy forward). In other words, class warfare eventually emerges. Capitalism’s collapse, argued Schumpeter, would come from within as social democratic forces usher in a welfare state … a heavy regulatory environment … and restrictions on entrepreneurship that burden and destroy the capitalist structure. This would eventually flatten both society and the economy.

It’s not too difficult to see class warfare on the way when the President excites audiences with the charge that the Banks and the Insurance Companies have exploited people long enough. ABC News this week has a special on the Middle Class who see their hope for a better life for their children disappearing. Who’s to blame? ABC suggests the rich and corporate folks are! Look, the bottom 50% of income earners now pay only 3% of the income tax, while the rich are penalized for their efforts. The top 5% pay 57% of the taxes. And You can bet taxes are going to go up to cover the spending.

Today, what is the biggest single expenditure in the Federal Budget, barely ahead of interest on past deficits? Entitlements! The transfer payments to individuals who feel the government owes them a welfare check, food stamps, unemployment payments, subsidized housing, and now maybe even free medical care. Congress learned long ago that they can stay in power, with enormous benefits and perks, if they make sure earmarks and pork barrel projects can bring federal money and jobs to their districts. How long can we keep “raising the ante”? How long can we keep borrowing from our children’s future to pay these voters off? The February deficit was $221 billion, the largest on record. Even if America taxed 100% of all household wealth, it would not be enough to put its balance sheet in the black. And Professors Rogoff and Reinhart show that when external debt passes 73% of GDP or 239% of exports, the result is default, hyperinflation, or both. IMF data show the US already too far gone on both scores, with external debt at 96% of GDP and 748% of exports.” While it seems that higher taxes and excessive inflation are likely, it’s still possible that the saner people will call a stop to the government madness. For now there are more people in the streets demonstrating for government restraints than government hand-outs. May their tribe increase.

I recently participated in a conference with some well-known economists and investors. They introduced me to the Foundation for the Study of Cycles, an independent institution founded by Herbert Hoover that has drawn on the major universities and the federal economic boards to find patterns and trends in our economy. Since 1971 this Foundation has predicted with amazing accuracy every market turn in stocks, bonds, currencies, real estate and commodities. What are they saying lies ahead for us now? Hold on to your pants!

The Foundation sees 5 major cycles, one of which is a 500-year cosmic shift, all bottoming together at the end of 2011 and the start of 2012. They are saying that the worse hasn’t even happened yet. With the deficit growing dramatically from bailouts and earmarks, they expect the dollar to began a long decline, making everything you buy typically cost more and more. Usually wages lag behind prices, with strikes and shut-downs becoming more numerous. Government printing money without limit devalues the currency while raising taxes to cover its shortfall in income taxes will retard any economic recovery.  Due to the decline in available oil reserves, gas and everything that depends on gas– produce transported to market –will cost more. With unemployment at an unofficial 17% and housing sales at the slowest on record, they foresee a double dipped recession, if not worse. The deceptive recovery of the stock market is largely based on the government bailout money which the banks invested! There’s not much more of that likely with the people screaming about government deficit spending. The future looks cloudy. “Seven fat years, seven lean years” sort of stuff. Short term issues may slow the process, such as weakness in the Euro due to Greece’s default or lack of demand for oil by slowly recovering countries. But the market and dollar will sink and prices will rise. Take that to the bank.

What’s a mother to do? Traditional wisdom says, “Get out of debt.” Find additional streams of income. Move out of dollar-denominated instruments.  One noted-author– normally optimistic — has even published a manual on “suburban survival,” recommending the storage of foodstuffs and drinking water in your basement. While I don’t think the “sky is falling,” I think one would be wise to secure any incomes they can and to watch and diversify their resources as best they can. May I suggest our way of developing a stream of income online?

The Olympics always inspire me. Even the sound of the drums and fanfare of “Bugglers Holiday” get my juices flowing.

It was an old friend who helped me appreciate the inspirational value. Bob Richards of the USA won the pole vault in Helsinki and Melbourne and became the first face of Wheaties. He became a motivational speaker all over the world, and even reached the top in our business. We were chatting in his ranch home outside Gordon, Texas, when he said, “I have spoken 1000’s of times to tens of thousands of people and as I look in the faces of the audience, they all seem to ask the same thing, ‘Tell me I can do something with my life’.”  The stories abound of those who worked for “higher, faster, stronger.”

These Winter Olympics are especially inspiring if you paid attention. I did, because my son Jeff took his family to beautiful Vancouver for the first week. If you watched the spectacular Opening Night Ceremony which showcased Canada’s beauty and talent, you wanted to become a Canadian!

Who could not be inspired by the heroics of US  Gold Winners, Lindsay Vonn in women’s downhill skiing,  Shaun White and Seth Westcott in snowboarding, and Bode Miller in Combined downhill, the old guy still skiing to win it for his young daughter.  Upsetting the Russian domination of men’s figure skating was USA’s harder-working Evan Lysacek with grandparents in Atlanta.  Especially moving was the victory of the veteran Chinese pair figure skaters Shen and Zhao who had won every prize except Olympic gold. Four years ago after Silver,  Shen proposed marriage to Zhao still on the ice. However, they postponed their marriage until after Vancouver for one last try. The whole world was cheering for them and their performance was flawless, the highest scores ever given in the short program!

Let me tell you, if you have a passionate dream and a strong work ethic, YOU CAN DO SOMETHING WITH YOUR LIFE!

Another new decade! The years do seem to gallop by! Each year we resolve to make it better than the last. We plan to lose weight, get out of debt, exercise more, spend more time with the family, etc ad nauseum. Statistics tell us that 30% are broken in the first week! We tend to expect to fail after a while, and guess what- we do! The same can also be said of our goals for the year- personal, health, business. Andy Stanley suggests in his New Years message online that we should first decide what we want to be, then what we should do. From Stephen Covey he was stressing to Begin with the End in Mind. Covey’s definition of success can be summed up in how close you come in reality to what you hope your parents, spouse, kids, and boss would say about you at your funeral! Things like integrity, generosity, faithfulness- that stuff.

Over a decade ago in Winnipeg I was sharing with Dr. Robert Schuller, the author and pastor, with whom I shared the platform on a few occasions, how helpful his sayings had been to me. With glee he said, “I have a new one!” “Tell me.” “We have to say that we are what we wish we were if we ever hope to be.” Instead of RESOLUTIONS which we expect to break, make daily AFFIRMATIONS about the person we want to become to shape the self-image in the subconscious that will effect the outcomes. To be correct, they should conform to the 5 “P”s- Present tense, Positive result, Personal, Picturesque and Powerful. Instead of “I am going to quit smoking,” say “I now enjoy the smell of fresh air and the taste of foods.” For “I am going to lose weight,” craft something to say like “I feel great in my new clothes at ____ lbs.” Say these daily with feeling and in several weeks the change should start. My own affirmations begin with, “I daily enjoy affirming the dynamic and thriving person I am.”    

Today I reached 70 years of age. It seemed inconceivable to me to live that long when the Japanese ruined my second birthday party by attacking Pearl Harbor on December 7, 1941, the “date which will live in infamy”(FDR). Yet now I feel so blessed to be in robust health and financial security with a happy family life with 45 years married to my best friend. Two achieving children and two beautiful grandchildren– all close. I look back on 40 years of family business success, 33 years of teaching over 10,000 college students, travels in over 70 countries and wonderful friends and associates. My faith grows more meaningful every day. What more could a person want? Last month in Phoenix at a conference with Bruce Wilkinson at the Biltmore, a prominent speaker(next-door neighbor of Paul Harvey) cornered my wife and me, saying “I have been watching you two all week, and I feel compelled to tell you that I feel that your next ten years are going to be the best years of your life.” I’m taking that to the bank. We’re just getting started. As my kids say, “70 is the new 50.” The poet excites me when I read, “Grow old along with me/ The best is yet to be/ The last of life for which the first was made.” Join us. It’s going to be great!

We want to join the 21st century, really, we do. It’s so hard to keep up with the technologies of social networking and still have the time to run a business and maintain a home and family. So many people- particularly the more youthful and non-technically challenged -have an almost constant presence in Facebook, Twitter, My Space etc. that we feel woeful backward and inadequate to compare our output with theirs. But our intention is not to compete, but to complete the thrust for social networking. Everyone wants to relate, but more on a meaningful level than the chatter that gets texted across the airwaves and unfortunately also the highways!

The fact that we are attempting to launch a web presence in the social media shows we feel that SOCIAL NETWORKING IS THE WAY OF THE FUTURE when it comes to business and relationships. We would be foolish to ignore this vital channel just because the languages seem stupefying to us. What we want to do —our purpose in creating this site –is to share our strengths in the areas of mutual interest, and ask others to contribute theirs. We have succeeded in our own business for 4 decades and have amassed a knowledge of attitudes, skills and perspectives that we ought to share with those who follow. We hope we will prove worthy of your attention, and fortunate enough to benefit from your comments. Forgive us if we are not online every day or responsive to every post.

Just a few guidelines- NO NEGATIVES, NO PROFANITIES, NO PERSONAL ATTACKS, NO SPAM, Only positive please!