Governments Don’t Lead. They Follow.

In refining the idea, that we are moving through a similar pattern of the early 1900′s Great Depression, it really is apparent this idea that governments never lead. Instead they always follow. And if anything, they tend to only exacerbate problems since they implement solutions that are either too late or using old thought models.

The typical political process works much in the same way products work in a free markets. The politician are essentially products that move through distributions networks. Think that someone can become President, Senator, Representative, or even a state/local official overnight? Their rise to those positions depend on the channels they enter much like products that enter the market. Politicians are essentially brands and much like brands, they may not be perfect for everyone, but they do reflect a significant investment in both the initial investors as well as the “product’s loyal users”. Basically, individuals are both economically as well as emotionally invested in their political brands.

Some tend to think that the people guiding the politicians are really trying to take over the economic engine or collapse the system. Although there is definitely evidence of the fridge elements that want power, chaos and collapse, it is hard to believe that a majority of the political influencers would be purposely trying to ruin the organism that they themselves are a part of. Are the status quo political channels at least ignorant to what they are doing? By their nature they are far removed from what is happening on the front lines of the economy, and just trying to do what they know worked in the past.

You would think that the people funding today’s political class are closer to the old Industrial Age, having made their wealth in the past, than that of the new Digital Age that is just now coming into stride. There are no doubts significant moneys are coming from grass-root efforts, but there is also not much to argue on where strategic direction is coming from either. Most wealthy and politically connected donors get the politician’s ears, and if the politician wants to rise through the current distribution networks (fund raisers & media outlets), the politicians better listen well.

But let’s look at the bulk of the wealthy class today and who is directly trying to influence policy. Much of the influence is coming from the financial, media, & large manufacturing sectors, but also you see large amounts of money coming from entrenched systems like academia and unions that were in fact installed by the political progressives themselves. The only common thread through all of donors is an investment in the status Industrial Era systems.

Newspapers, magazines, radio and even TV broadcasters are dying as more and more consumers turn to the Internet to get their news and entertainment. Large manufacturing and thus union participation is falling as factories move to smaller and more agile operations. People are growing increasingly disgusted with the return on academic investments both from the individual perspective as well as the entrepreneurs looking for skilled labor. Their Industrial Era system is dying.

And much like any entrenched system, they try to fight for survival by doing what they only know they can do. Can you see why the TV and print media would so monolithically support progressive ideals? Why large manufacturers would sell the government on new Green Energy projects to try and kick start the dying sector again. Why unions would only want to make it easier to create more unions members and why academia calls for more teachers. Only the financial sector is really the ambivalent ones since they only look at volume of earnings and will just transition to the Digital Age capitalists as their numbers grow.

The parallels to the Great Depression are there too. The Republican party at the time promised a “chicken in every pot” in Hoover’s 1928 election campaign. Now you can interpret that as shared prosperity or maybe more support for the Agriculture Age that they were transitioning from. Think of how ignorant it sounded for Conservatives when the politicians promised health insurance for everyone.  In a few more year, this health  insurance promise will look equally antiquated. The key is that the politicians of that time, as in this time, were being directed by the political distribution channels of the era.

Why are there so many Digital Era billionaires so supportive of Progressive ideas now? Again, the change is slow as before wealth of rail roads and industrialized steel first thoughts were to preserve the status quo Agricultural structures. If you follow the donations of the financial sector, typically they are more interested in who has better chance in winning then if there was an R or D behind their name. Who do you think is influencing the investments of most of these new billionaires? The wealthy and successful typically achieve that status by understanding and working business distribution networks. They go where they can effect change then in the political channels. You can already hear the frustration from many of them in the direction the country is going. So the question is really when will the most ripe opportunity come that they can step in and effect real, lasting change that will go through this new era.

Governments by their very nature are risk-averse. Have you ever heard of some bold plan taken on by a major politician from the grass roots effort? Typically, they only jump on after they can adopt it without fear of losing their current position. If you had any doubt you can watch both in Europe, as well the US, as the politicians just kick the “political can” as they ring up more debt and inflation.

Our system of government, mainly protected by our Constitution with freedom of speech and free-markets, typically allows people to compete in a marketplace of ideas that our founders purposely envisioned. Those winning ideas then get pushed into Governments, but of course that all takes time. Most importantly, an idea could make it in the free market, much faster than it could be adopted in the government if they both originated in parallel. Because of the political nature of governments, the idea would have to be adopted in the mainstream before it began to be used by the government in mass…To see this first hand, go to any government website and marvel at all the number of pdf forms that they readily expect you to print out and fax back or mail in. Would even you even think of working with a bank, insurer or vendor if they practiced the same today? And just as those businesses must change or perish, so will this government.

The main point is, our energies are best used effecting change in the marketplace and thus society in general. It is much better than it is directly battling the current government and these entrenched Industrial Era distributions channels. Just as the Internet made current distribution networks irrelevant, so will our new  channels. Once we win there, government will have to come along since they only know how to follow.

06. January 2013 by Kris
Categories: Business, History, Politics, State/Local, World | Leave a comment

Things to Come

Have been digesting this idea I first heard from Bill Whittle and it finally started to see some important patterns. But I would like to take it even one step further that may begin to change the way we have interpreted history up to this point.  Coming to the Conservative way of thought, I have heard over and over this conspiratorial theory of how Marxism infiltrated American culture thus transforming us into to the inevitable Socialistic disaster that will have Americans being forced into labor camps while Liberal comrades enjoy the spoils of nationalized industries. I don’t think so. I believe that what we saw with the last transition from an agricultural society to an industrialized one is simply repeating itself. However, it is really up to us now to use the lessons of the past to ensure the worse doesn’t happen again. If fact, I feel we are going to a much better place both in the US as well as the globe.

With my grandparents living through WWII in Poland and having family live in, then Communist Poland, it was drilled into my head at a very young age the horrors of war as well as the amazing human capacity to survive in the worst of times. Although I had a limited amount of time with my great grandfather, his stories of the Great Depression did not seem to really resonate until the last few years. But I remember, both my grandparents haunting prediction that it could happen again and we should always be prepared in case.

First Bill Whittle, originally attributing the idea to Thaddeus McCotter that these times are simply transitioning from an industrial age to a new Information/Digital Age. He is absolutely correct, but what we currently believe about history only wants us to directly confront the power structures and I feel like that will only result in the same results as the previous transition which is a global depression and ultimately war fought on old ideals. Many of us are already feeling strong emotions on nationalism feeling our country is being torn from our hands. We look in the media as well as around us and see decay both in our culture as well as our institutions.

Well probably the hardest thing to say as a Conservative is — Progressives won. They dominate the current paradigm and I bet I will find few will argue with this point. They teach our children, they control our established media outlets, they occupy our government officials on both the left …and the RIGHT. Yes the right as well. Can anyone argue the influence to American history that Theodore Roosevelt had? Can you say that a pure Conservative, in the same linage as the founders would have fought wars such as Korea, Vietnam, Iraq, Afghanistan? Just look to our recent history of even my conservative hero Reagan through Bush Jr. Each president had ideas that leaned away from the pure Conservative beliefs of the founder fathers. The point is, as much as we would like to think that our version of Conservatism in American politics today was anything remotely close to the founding fathers, it wasn’t. At least not yet.

I argue this point only because, as Whittle & McCotter suggest, the founders were from a agrarian society that was fiercely independent. What we have seen in the late 1800 in the US is a shift to an industrial age and thus everything that age rewards ensures its continued survival…Problem is, that age is dying right before our eyes. And just as the Agricultural age died before it, the same patterns are reemerging. The good news is, as a Conservative, there is a reason you are thinking the way you do. In fact you are all pioneers of thought and ahead of this massive transition…most likely causing it yourselves.

One thing that always bothered me about the current conspiratorial type thinking of Marxist “taking over our system” is I have worked in the government sector for a few years as well as have know some teachers. As much as we would like to think, there is not some grand brainwashing signal being broadcast over the airwaves turning our children into little communists. Most of the government officials and unionized teachers, I have had the displeasure to come into contact with struck me as not having all that much brains to wash anyway.

But what would explain the dominance of what we interpret, as socialistic tenancies? Well I draw that experience from working in technology since its early risings as well as being involved in the high-pace, start-up world of of the early 2000s. At the time I was deeply studying marketing theories in an MBA program and trying to understand why people were so slow to adopt new technologies that potentially would make their world better. If I could summarize one important point I learned from the research, it is not the best solution that always wins. At least not the one WE interpret is the best. I like to use BetaMax vs VHS as an example, but it may leave some younger folks scratching their heads. Suffice to say BetaMax was the higher quality media at the time. Well many young folks will struggle to understand why something that was better did not win the product wars. Simply put there was more content available for VHS…mainly because the porno industry adopted its cheaper costs for tapes. So because more content was available in VHS, mostly pushed by poular video rental stores of the time, people flocked towards VHS over BetaMax. BetaMax did win as the standard in video recording with broadcast journalism so it did not completely disappear right away..but I digress.

Is it easier to believe market forces from a predominantly industrialized world was driving the thought leadership in academia, media, business, as well as government  or was it some grand scheme launched by a small group trying to bring about a new world order? All you have to do to see the process in now is observe is any fad music band, clothing or device. People follow the crowds. However, for every one successful fad you may see, there were at least 50 to 100 failed ones. That is the problem with interpreting modern American History. History is written by the winners. The losers don’t typically get to explain why they lost. Well that explains all the influence Progressives have over our entire society.  Even Whittle loves to point to the moon landing in many of his speeches as the pinnacle of American achievement (still love ya Bill). You will have to admit that was a completely federal government exercise. A Progressive Dream come true….Conservative believe in individual achievements, so personally I look at Edison and possibly recently Steve Jobs as hero of individual accomplishments.

So if you begin to believe that the last 100 years belonged to Progressives, you can start to see how this current transition has left them clueless. Which takes me to the discussion that the Great Depression was caused by Progressives…I don’t think so, and I know I am going to get a firestorm on this, but as Whittle say, you are not going to get flack if your not over the target. I think the Progressives were the rescuers and yes rightly deserve credit for restoring society from an economic collapse.

The reason I believe this is because the systemic economic cracks started within the agrarian age. We can use modern history is a good comparison. When the industrial age came about, we were still mostly an agriculture based society. When the spoils were starting to be earned from a dawning Industrial Age (mostly in railroads and transportation networks), that money flooded to a rush of new inventions. Sound like the 80-90 tech bubble in our modern history? In fact most of the research I was doing on technology adoption was bases on the introduction of railroads. The companies that risked its adoption, flourished, while the companies that ignored it perished. Sounds like the companies that disappeared when we transitioned from paper to digital…Remember Kodak?

Finance is always at the heart of the economy as money is the lifeblood. You can imagine the days of the early 1900′s flush with cash reaped from an ever more increasing leaps in productivity, with innovators’ early adoption of these new delivery and production tools. New Markets opened as a results of railroads and communications. Now products made in New City could easily be sold in San Fransisco and vice versa. This earned money, flooded old-school investors and into banks that allowed easy credit thinking times were good and everyone is going to be as productive using it…sound familiar?

One story that my great grandfather told me that really did not click until a few day ago was how farmers were running out and purchasing tractors and more land only to have them all repossessed after the crash of 29. Recently, I realizeded a striking resemblance to the last decade. Banks flush with cash made credit easy to obtain (yes, I know about the Community Re-investment Act). The point I am trying to make is, the people of that time, just as we recently have, took the easy money and invested in  OLD money making scheme increasingly chasing fewer and fewer productive business models. Just as in those days, as is the case today, the companies that took advantage of the easy credit and invested in sound new technologies were rewarded handsomely. So the people of early 1900 that bought the equivalent, in today’s money, hundreds of thousand of dollars of tractors and machinery struggled to get the productivity jumps farming 50 or so acres. Not to mention everyone and their brother, was trying to do the same thing. I think of all my experiences in start-ups where hundreds of thousands of dollars were spent on people and servers before a line of software code was even written….Obviously that company will never be remembered, much like all those early failed farmers were not either. But that is great example of old thought in a new market place. In the industrial age you had to build the factory first.

So what happened in the Great Depression? The Conservative thought process that ran our country very well for a century, failed to make the transition to this new age. The biggest thing that I struggled with in studying the Depression and the economic policies of the last 100 years was that with the first signals of the Depression was setting, the Federal Reserve at the time DID NOT ACT. No Depression expert would probably argue that the boards at the time firmly believed in lazier fair economic discipline which was a hallmarks of our founding culture. But today, Progressive intellectuals rail against the decision..and why not. Progressives were right. Think about it. If today we were a centralized, industrial-based society with the grand majority of us working in factories, offering cheap credit for factory owners to invests in equipment and materials is a good way to spark an ailing economy. Invest in infrastructure to build roads and railways for the factories to deliver those goods. Keynesian economic thought was rewarded with results during this time.

But that is the problem today. Progressives are looking to what they know and it is just isn’t working any more. We are not an industrialized society anymore. If we have factories, they are smaller and more responsive to changing market dynamics. The great majority of individuals are employed by small businesses with 1-25 employees. And there isn’t much doubt why people like that own those businesses…people like you and I, have a Conservative mindset. We work in small teams, just like small farmers did in the 1700s. We laugh at top-heavy bureaucracies, much like I bet the Revolutionists did of the slow-to-adapt British soldiers they fought against. We don’t wait for people to tell us what to do, which is just the way it works in large factories. We act on what we need to get the job done. Factories had elaborate managements structures and processes. Committees to make those decisions. Those days have passed.

So there is no need to fight Progressives. They are dying like a dinosaur in a tar pit. But what we should be concentrating on is building the next wave of societal structures and preparing to act when the moment is right.

Maybe historians will have a more accurate portrayal of this concept, but I have heard many compare Obama to FDR. In the Progressive’s mind, that is pretty accurate. If you accept, their idea, FDR is the father of modern Progressive Movement, much like Washington may be Conservatives. But more accurately, we are probably looking at Obama as being Hebert Hoover. The Republican president scorned in Progressive textbooks for being so behind the times. Rightfully so. If this theory hold, Hoover would have had more of a lazier fair economic philosophy much in line with the Agricultural Age.

So if this idea is correct, then we actually had the most wonderful blessing befall in losing the last election. With the fiscal cliff circus just wrapping up now, is there any doubt the Republicans and Romney would do anything radically different with the current rates of government spending? Maybe he would had cooled it trajectory, but I doubt he would have instituted real conservative minded reforms that would save us from the economic disaster coming. If anything Republicans would have the bad timing in being blamed again for the collapse.

But the truth is we are still heading for tremendous pain as this Progressive industrial age dies and young people transition to this new paradigm. Most important is my eyes are the millions of young individuals raised in this current culture that is still in a industrial-age mindset The one thing that struck me in my discussions with grandparents is the strife young people had in the depression. Older folks typically already had farms, jobs, or some kind of way of survival, while young people, abandoned and typically destitute felt robbed. Put it to you this way. If you are happily married with children, when times get hard, your actions are going to be wildly different than a young, single man with possibly no close family. Their rebellions gave rise to Hitler, Mussolini as well as the acceptance of the philosophy of Marx that would eventually lead to the death of millions. I pray we can avert such a catastrophe.  I believe in my heart if enough people realize what we are going through, we could even make the transition faster and hopefully avoid a horrible war.

02. January 2013 by Kris
Categories: History, Politics, World | 1 comment