I hope you had a great weekend! The leaves are starting to fall from the trees around my house.
LRPC’s Monday Morning Minute for this week, “We’re In Danger Of Poisoning America’s Economic Secret Sauce” (presented below) comes to you courtesy of John Manzella. As an independent, objective Registered Investment Advisory firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share informative and relevant information with you each week. This is a short piece I believe everyone can read in less than 60 seconds.
A number of economists feel that we may be at an economic inflection point. Are we at risk of destroying the economic goose that lays the golden eggs? The author thinks that we may be.
Have a wonderful week!
We’re In Danger Of Poisoning America’s Economic Secret Sauce
By John Manzella
After dozens of speaking engagements in Mexico in the early 1990s, I found that many in the audience either had an American passport or badly wanted one.
After I crossed through Check Point Charlie from West Berlin to East Berlin in March 1990, I was told by countless East Germans of their wish to move to the United States to seek a better life.
And when in China, I’m often told by students, workers and business people alike of their desire to permanently move here.
What is it about the United States that draws the world’s brightest and least fortunate? And can it continue?
America’s economic secret sauce
For generations, America’s economic secret sauce has provided tremendous advantages. America’s economic secret sauce includes the U.S. system of free market capitalism, rule of law, separation of church and state, dynamic entrepreneurialism, the welcoming of immigrants and a brilliant Constitution.
Combined, these factors have promoted stability and created an environment that empowers people to unleash their creativity to achieve their dreams.
American capitalism has generated the greatest economic growth the world has ever seen. At the core of its brilliance is its ability to create incentives to produce solutions to problems, and to distribute those solutions broadly. And in doing so, it has paved the way for tremendous gains in efficiency, productivity and standards of living.
Michael Novak, author of books on the philosophy and theology of culture, says of capitalism, “No other system so rapidly raises up the living standards of the poor, so thoroughly improves the conditions of life, or generates greater social wealth and distributes it more broadly. In the long competition of the last 100 years, neither socialist nor third-world experiments have performed as well in improving the lot of common people, paid higher wages, and more broadly multiplied liberties and opportunities.”
But the American economic system is far from perfect. And due to flaws revealed by the recession that began in 2008 and the poor recovery that followed, more Americans seem to question the credibility of our Margaret Thatcher-Ronald Reagan model of free-market capitalism.
Many appear to believe they have the answers in left-leaning philosophies intended to help the less fortunate and those struggling to get ahead. But good intentions are one thing.
Working to create greater economic opportunities for all Americans is a morally sound goal. However, the real danger lies in the execution of far-left policies that history repeatedly demonstrates actually hurt those they are intended to help.
Too big to succeed
During and after the height of the financial crisis, we constantly heard why some of the largest and most interconnected businesses were “too big to fail.” But by implementing left-leaning policies that increase the size of the federal government and its spending packages, the entire process becomes too big to manage and ultimately, too big to succeed.
In addition, since government service providers have no competition, a primary factor that makes capitalism so successful, there’s little oversight or accountability, and little drive or incentive to become more efficient, productive, innovative or creative. Economic decisions made by politicians, as opposed to markets, are more problematic.
Social programs depend on private enterprise
Our free-enterprise system is responsible for creating jobs and wealth in the United States. And the ability of our government to provide services and care for those who can’t care for themselves is limited by the private sector’s ability to grow the economy. As such, if the private sector falters, the resources provided by the government are directly affected.
Furthermore, the greater the tax bill, the less capital available to invest in research and development — a major factor boosting productivity and employment.
Brian Wesbury, chief economist at First Trust Portfolios, puts it well. He notes, “The larger the slice taken by the government, the smaller the size left over for the private sector, which means fewer jobs and a lower standard of living.”
The bottom line: Many left-leaning policies focus on increasing the size of government, spending packages and state control. Sadly, this is a sure way to poison America’s economic secret sauce.
Lawton Retirement Plan Consultants, LLC (LRPC’s) Monday Morning Minute is crafted to provide decision-maker’s with important information about the economy, investments and corporate retirement plans in a format that allows a reader to consume the information in less than 60 seconds. As an independent, objective investment adviser, LRPC has access to many sources of research and shares the best and most relevant information with its readers each week.
Lawton Retirement Plan Consultants, LLC is a Milwaukee, Wisconsin-based independent, objective Registered Investment Advisory (RIA) firm providing investment advisory, fiduciary compliance, employee education, vendor management and plan design services to retirement plan sponsors. The firm currently has contracts in place to provide consulting services on more than $400 million in plan assets. For more information, please contact Robert C. Lawton at (414) 828-4015 or email@example.com or visit the firm’s website at http://www.lawtonrpc.com. Lawton Retirement Plan Consultants, LLC is a Wisconsin Registered Investment Adviser.
This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance, tax, legal or investment advice. Each plan has unique requirements and you should consult your attorney or tax adviser for guidance on your specific situation. In no way does Lawton Retirement Plan Consultants, LLC assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations. Investors should carefully consider investment objectives, risks, charges and expenses. The statements in this publication are the opinions and beliefs of the commentator expressed when the commentary was made and are not intended to represent that person’s opinions and beliefs at any other time. The commentary does not necessarily reflect the opinion of Lawton Retirement Plan Consultants, LLC and should not be construed as recommendations or investment advice. Lawton Retirement Plan Consultants, LLC offers no tax, legal or accounting advice and any advice contained herein is not specific to any individual, entity or retirement plan, but rather general in nature and, therefore, should not be relied upon for specific investment situations. Lawton Retirement Plan Consultants, LLC is a Wisconsin Registered Investment Adviser and accepts clients outside of Wisconsin based upon applicable state registration regulations and the “de minimus” exception.