Month: July 2013

The People of Enterprise

by Helping Families Flourish, posted in Flourishing Article

Originally Published in Flourishing May/June 2013

 Linda and I were in Beloit on May 24 to visit the Green Mound Cemetery in the southeast corner of Mitchell County.  Green Mound occupies five acres in the northeast corner of the 160 acre farm homesteaded by Linda’s great, great-grandfather, Karl Petterson.  Karl had emigrated from Sweden, and his first home on the property was a sod-covered dugout.  That’s a sobering thought, isn’t it?  One of Karl’s great, great-grandsons now lives on the farm, and he’s currently remodeling Karl’s second house.  Power tools.

Anyway, our primary purpose for visiting the cemetery that day was to buy our own burial plot.  It was $100 for the two of us.  It did seem like a long way to drive for a bargain—about one hundred and ninety miles—and the digging is extra.   But, as we told the caretaker, we’re in no hurry for that, and our kids can afford it when the time comes.  We drove on to Hays that day to visit my parents’ grave site.  I was reminded by the bordering lilacs of  my mother’s thirtieth birthday; she would have been ninety-two on May 26.  I pulled out my calculator to be sure, and yes, I am that old.  I miss my parents, of course, but their newest great-grandson, Teague Michael Harvey, came to visit us the next day.  Teague was a year old on May 12.  Did you know that you can take pictures of your grandchildren and post them instantly on Facebook?   Beam me up, Grandpa!

About the time that Karl Petterson was crossing from Sweden, Harold Warp’s Norwegian immigrant parents were settling into their new sod home about one hundred and twenty miles northwest of Green Mound in south central Nebraska.  Harold was born in that house in 1903, and educated in a nearby one-room country school.   Harold was the youngest of the Warp’s twelve children.  He didn’t have digital cameras, power tools, or the Internet, but young Harold was fascinated by that era’s high-tech industries, especially plastics. 

As a teenager, Harold noticed that young chickens grew faster and that hens laid more eggs in the summer than in the winter.  So, he spent his high school years developing a clear plastic sheeting that could provide greater warmth and sunlight to the chickens through the harsh Nebraska winters.  He documented the chicks’ improved health and productivity and applied for a patent.  While he waited, he saved.  When his patent was approved, Harold and two of his brothers moved to Chicago—the center of the direct mail universe—and starting with $800, began manufacturing “Flexo-Glass”.  They advertised.  That was in 1924. 

Initially, the Warp’s marketed their product to chicken farmers for use in hen houses, but rural Americans soon found other uses.  What was good for hen houses, worked just as well on home windows and doors.  As sales increased, Harold reinvested  his profits in still more production and advertising, and by the time he was forty, he was a wealthy man.

From his own experience, Harold could appreciate how rapidly American entrepreneurship had  transformed the world.  He thought that knowledge of that transformation should be shared.  As you’ve travelled the highways of Kansas and Nebraska these past sixty years, you’ve probably seen Harold’s billboards proclaiming “See How America Grew”.  If you haven’t yet been drawn to Harold Warp’s Pioneer Village, it’s not too late.   Linda and I, guided by my cousin Robert and his wife Debbie, visited for the first time on May 9 through May 11. 

Harold Warp lived most of his life in Chicago, but his real legacy lives on in tiny Minden, Nebraska, where he grew up.  Seventeen buildings house more than fifty-thousand artifacts.  You can see a one-room school house, the books unopened since 1937, a genuine Nebraska “soddie”, a pony express station, a blacksmith shop, a church, and other frontier buildings.  There is a collection of American kitchens dating from 1820.  There are ox carts, surreys, and horse-drawn sleighs; and a Wells Fargo stage coach.  The Wright brothers and “Lucky Lindy” are represented, along with Henry Ford, Ransom Eli Olds, the Dodge brothers, John Deere, and hundreds of other American inventors and entrepreneurs.  And, notably, virtually all the displays are protected by Harold Warp’s Flexo-Glass.

On Friday morning, May 10, Robert, Debbie, Linda and I looked for a place in Minden to have breakfast.  Feeling frustrated, we finally joined a group of bikers at the local Subway Sandwich Shop.  The bikers and their dog were also visiting Pioneer Village; and like us, they really wanted a big, farm-style breakfast.  God bless ‘em anyway, but that’s not what Subway does. At least the bread was warm.

But at lunch time, we found the downtown square flooded with cars, pick-ups, and SUVs; and the several very good restaurants (none of which served breakfast) were packed with patrons.  We hadn’t seen a big crowd at Pioneer Village, so we were puzzled.  But after lunch, we solved our mystery when we stopped to check out the beautifully restored Minden Opera House on the north side of the square.  The playbill was still posted on the door: Featured speakers that day were Jack Welch, Condoleeza Rice, Mike Krzyzewski, David Allen,  and John Maxwell.  Well, no; those high-powered individuals weren’t actually in Minden.  But, Minden had turned out in full force that morning to see and hear them via a closed-circuit telecast sponsored by the restaurant chain Chick-fil-A.  Harold Warp really was prescient.  The American spirit of innovation and enterprise is alive and well in Minden, Nebraska.  And, if it survives in Minden, it must be  secure all across America.  mh

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Toward Economic Literacy and Fairness

by Helping Families Flourish, posted in Flourishing Article

Originally Published in Flourishing May/June 2013.

Many are the myths of economic journalism.  And the relative malaise we find ourselves in—with GDP growth rates half or less what they could and should be—is in no small part the result of these myths and their effect on the greater part of the American population.  Not the least of these myths is that America’s great oil companies don’t pay their “fair share”. 

Setting aside the definition of “fair” for a moment, consider the fact that three of the top ten U.S. income-tax payers in 2012 were large American integrated oil companies.  These three paid more in federal income taxes than the other seven (taxpayers) companies combined.  And, each of these oil companies paid income tax at higher effective rates than any of the other seven companies. (Source: S&P MarketScope Advisor.)

Now, to the issue of “fairness”:  In keeping with the advice of St. Jerome that we not look a gift horse in the mouth, we might want to remember that without these mighty integrated oil companies, we wouldn’t be traveling across our great country or circling our planet (the cleanest and most disease free it has ever been) at hundreds of miles per hour in greater comfort than any previous generation could have imagined; nor would we be living in relative luxury on land that Thomas Jefferson called “the immense and trackless deserts”.  Indeed, without these companies and others like them, we would be walking to our destinations alongside horses, oxen, and mules.  We’d all be clothed with animal skins, not cotton; and especially not any of the petroleum-based miracle fibers and fabrics that we so take for granted.  We’d be cooking our meals and warming our homes with fires stoked with manure, wood, and if we’re lucky, coal.  If we could afford it—and if the law would allow it—our homes and offices would be lit with whale oil.  The list is endless.  So, in regard to “fairness”, let’s not demonize the gift  horse. Instead, let’s grant these most productive of companies—entities that are essential to modern life and health—the immense respect they’re due.    mh

A Notable June Birthday

by Helping Families Flourish, posted in Flourishing Article

Originally Published in Flourishing May/June 2013 

Claude Frédéric Bastiat was born in Bayonne, Aquitaine, a port town in the south of France on the Bay of Biscay, on June 30, 1801. His father, Pierre Bastiat, was a prominent businessman in the town. His mother died in 1808 when Frédéric was seven years old. His father moved inland to the town of Mugron with Frédéric following soon after. The Bastiat estate in Mugron had been acquired during the French Revolution and had previously belonged to the Marquis of Poyanne.

Pierre Bastiat died in 1810, leaving Frédéric an orphan. He was taken in by his paternal grandfather and his maiden aunt, Justine Bastiat. He attended a school in Bayonne, but his aunt thought poorly of it and enrolled him in Saint-Sever. At 17, he left school at Sorèze to work for his uncle in his family’s export business. It was the same firm where his father had been a partner. Economist Thomas DiLorenzo suggests that this experience was crucial to Bastiat’s later work, since it allowed young Frédéric to acquire first-hand knowledge of how regulation can affect markets.

Bastiat began to develop intellectual interests, and he no longer wished to work with his uncle.  He dreamed of going to Paris for formal studies. This dream never came true, because his grandfather was in poor health and wished to go to the Mugron estate.  Frédéric accompanied him and took care of him.  The next year his grandfather died, leaving Frédéric the family estate, thereby providing him with the means to further his theoretical inquiries. He was 24.  Bastiat developed intellectual interests in several areas including philosophy, history, politics, religion, travel, poetry, political economy and biography. He was elected to the national legislative assembly after the French Revolution of 1848.

His public career as an economist began in 1844, when his first article was published in the Journal des Economistes in October of that year. His life and career were cut short by his untimely death in 1850. Stricken with tuberculosis, he was sent to Italy by his doctors. He first traveled to Pisa, then to Rome. On Christmas Eve of 1850, Bastiat called those with him to approach his bed. He twice whispered the words “the truth” and passed away.

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My thanks to the Library of Economics and Liberty for this biographical information. mh

What a Wonderful World

by Helping Families Flourish, posted in Flourishing Article

Originally Published in Flourishing May/June 2013

As many of you know, we are members of The Golden Circle, a group that provides support for a series of events performed by the South Kansas Symphony, led by Dr. Daniel Stevens.  Daniel is doing a fantastic job, both with the South Kansas Symphony and with the Southwestern Youth Symphony.  And, Daniel is himself a wonderful musician. 

Anyway, at this season’s finale, Daniel presented me with a plaque which says simply, “Life Is Good”.  Daniel said that he chose that message, because I’m always smiling.  He couldn’t have paid me a higher compliment.  Why do I mention this?  Simply to establish my credentials as an optimist.  And, yes, I am bragging.  Optimism is a state of mind, and as such, it is not something you’re born with; it is something you work to develop. (Ask my children, I used to be grumpy.)

But, did you ever hear me say that we don’t have problems?  No, you didn’t, and you have no idea of the troubles I’ve seen.  Nor will you, because I don’t allow trouble to define me.  Indeed, part of my job as your advisor is to help identify your troubles and aspirations, to put both into a rational perspective, and deal with them in a positive way.

So, the issue I hear about most frequently from clients is that our federal  government continues to spend irresponsibly—as it has for most of my lifetime.  But, now it’s worse than ever.  As Ben Stein’s economist father, Herb, famously said, “If something can’t go on forever, it won’t.”  But, life will go on;  and here’s the key point—BETTER THAN BEFORE.  That will be true, because it has always been true.  That is my faith.

Still, according to the federal government’s own actuaries, unfunded liabilities for things like Social Security and Medicare and federal employee pensions now exceed $87 trillion. That doesn’t include the official $16.7 trillion national debt.  The population is about 315 million people. Not counting the official $16.7 trillion national debt—and not allowing for cost-of-living adjustments—the average American owes over $275,000 for America’s unfunded liabilities.  (I’m not counting PPACA (Obamacare), either, but that’s an issue for another day.)

Looking at this more optimistically, I realized that if I’m the average American, Uncle Sam owes me $275,000 in future benefits.  So, here is my offer: The government says my life expectancy is another sixteen years.  Pay me now, instead of later.  I’ll even take a haircut.  In lieu of all future benefits, pay me today with a $100,000 Treasury bond with a guaranteed rate of 5% (the long-term historical average) and maturing in sixteen years.

Over sixteen years, I’ll collect $80,000 in interest on which I’ll pay tax at the optimistic rate of 25%.  The Feds will get back $20,000 in income tax payments, leaving a net cost of $160,000 ($100,000+80,000-20,000).  If I don’t live sixteen years, my heirs can either sell the bond in the open market or hold it to maturity.  And, let’s be fair about this:  Give every American citizen the same haircut, with the face amount and the maturity of each person’s bond based on today’s life expectancies.  I haven’t figured out how to treat people born tomorrow and the next day, but…

…I realize that the real solution needs to be a bit more sophisticated than my example here.  Whether my proposal is adopted or not,  you can be sure that something like it—a haircut for virtually everyone—will have to happen at some time, because as Ben Stein’s dad told Nixon, “If something can’t go on forever, it won’t”.  And, that’s really a good thing, because…   

…out of fiscal necessity, I’m convinced that America must and will find a way to return to its founding ideals of self-determination and family responsibility.  The $trillions now committed to a very long list of wasteful entitlements—not to mention countless other stupidly expensive commitments—will be free to flow into privately funded miracle cures and “for profit” space stations; to name just two possibilities. But until then, don’t waste your mental energy on things you can’t control.  Ignore the “news”, if that’s what you have to do, and force yourself to notice and appreciate the good things in your life.  As my first self-help mentor, Earl Nightingale, always advised, “Begin each day with an attitude of gratitude”.  It really is a wonderful world out there—and that’s why I’m always smiling!  mh