eFlourishing Article – Helping Families Flourish

Principles and Observations

January 25, 2017January 4, 2018 by Helping Families Flourish, posted in eFlourishing Article

I’ve just finished reading The Man Who Knew: The Life and Times of Alan Greenspan, by Sebastian Mallaby. It is, without doubt, the most personally and professionally relevant biography I’ve read in many years.

You may remember that Dr. Greenspan was Chairman of the Federal Reserve Board and the Federal Open Market Committee from 1987 until his retirement in 2006 (just short of his 80th birthday). In various capacities, Dr. Greenspan advised every American president from Nixon to George W. Bush, excepting Jimmy Carter. In this book, Mallaby provides both the evidence and the theme for Dr. Greenspan’s reputation. In American industry and in Washington, D.C., he was “the man who knew”. An obsessive researcher, he always had the facts, and everyone knew it.

If we were in a position to ask, Dr. Greenspan would likely tell us three things that are especially pertinent to this essay. First, no one can reliably predict the future, either of the economy or the stock market. Several Nobel prize winners, and countless PhD’s have blown themselves up trying to prove otherwise. The second thing is that investors and other economic decision makers sometimes behave irrationally. Third: Human nature never changes. Together, these points inform the first principles of our philosophy:

We have to choose to be rational, and at the same time admit that we may not know everything. We can never have enough information to predict with absolute certainty what’s about to happen. But like Dr. Greenspan, we do know from our study of history that well diversified investment portfolios—backstopped with optimism—will stand the test of time:

Patience, Discipline, and Confidence in the Future.

Still, in making an investment plan, the context of your life matters. So, we ask you to help us understand both your current financial situation and your long range goals. In turn, you expect us to provide both investment wisdom and economic perspective. To wit:

The year 2016 began with a decline in the S&P 500 Index of about 11%, bottoming on February 11. The financial media blathered endlessly about that being the worst start to a year since the dawn of time.

Then on June 23, the people of England voted to leave the European Union. Investors—abetted again by financial media—sent stock markets around the world into a spectacular nosedive. That paroxysm lasted for all of a day and half.

In the early morning hours of November 9th, as it became clear that Donald Trump would win the presidential election, the Dow Jones Industrials fell by more than 800 points, only to be reversed when the Sun rose over Wall Street. As I write this on the evening of December 12, 2016, the S&P 500 Index* is at 2256.96. That is 23% above the February 11 low.

The lessons here are: Financial journalism is not your friend, and correlation is not causation.

On February 5, 2016—in the midst of the aforementioned disquiet—we held a little seminar at Baden Square to discuss our outlook for the year. As must always be the case at such events, I told you more than I really knew. I said that the Dow Jones Transportation Average and industrial commodity prices were forecasting a global economic recovery.

As of tonight—and as luck would have it—the Transportation Average is up more than double the S&P 500 Index (year-to-date +24% vs +11%). Industrial commodities—even coal—are still up across the board. All of which suggests improved manufacturing output and a stronger job market in the coming year.

I’ve also just finished James Rickards’ new book, The Road to Ruin, wherein he predicts financial calamity by 2018. James is very smart, and presumably well-connected in Washington D. C. and on Wall Street. That’s why I read his books. But, he has been predicting a global currency crisis since at least 2010, always pushing out the due date. (The last one was in 1997, so they do happen.)

In this book, as in his previous books, Rickards makes some quite valid economic points. In particular, he criticizes the “equilibrium models” that the Federal Reserve and other central banks use to create their economic forecasts and to formulate monetary policy. Interestingly, Alan Greenspan has always doubted them, too.

James Rickards is probably right about a future economic crisis, though the depth and timing are uncertain. But, both Alan Greenspan and James Rickards affirm that such crises come and go; and economic life continues for those investors who are sufficiently diversified and unleveraged. Indeed, in most so-called ‘crises’ a majority of the population continues with daily life virtually unaware of the changes surrounding them.

Now, don’t take offense—PLEASE:

Donald Trump was not my first choice to be our next President, and I still have some serious reservations, particularly regarding trade policy. But, I am hopeful and optimistic. Only time will tell, of course, but most of the early indications are that we’re likely to experience a better business and tax environment than we’ve known since the Reagan years. As always, though, the best policy for investors will be to focus on great companies, not politicians. Business is the most creative, most adaptable, and most consumer-focused institution ever devised by the mind of man. Politics is—ur, uh—well, you know.

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*The Standard & Poor’s 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

Smart Ways to Take Advantage of Your Tax Refund

March 14, 2016January 4, 2018 by Helping Families Flourish, posted in eFlourishing Article

Author: Teresa Mears

Tax season is a time of stress for many, but it can be a joyful time for the roughly 75 percent of Americans who receive income tax refunds.

While the refund really means you’re getting back money you loaned to the government at no interest, in practical terms it often means an unexpected infusion of cash into your wallet or bank account. Last year’s average income tax refund was $2,755, according to the Internal Revenue Service. That’s a nice chunk of change.

It’s a great problem to have: What do you do with your windfall?

The best choice for one person may not be the best choice for another. But experts agree on one thing: If you have debt, apply your refund to paying it off, whether it’s credit card debt, student loan debt or other consumer debt. “People should still be focusing first on paying down debt,” says Meisa Bonelli, a Wall Street finance and tax professional whose Millennial Tax company advises entrepreneurs on business and tax strategy.

Debt, particularly student loan debt, should be a primary target because it limits financial options, preventing people from doing what they want with their money, whether it’s buying a house, buying a car or taking a vacation. “Get that debt gone,” she says. “It holds you back from everything else you want to do in life.”

Eric Rosenberg, a financial analyst who writes the blog Narrow Bridge Finance, agrees. “The No. 1 thing anyone should do with a tax refund is pay down debt,” he says. After he left graduate school with $40,000 in student loan debt, he focused on aggressively paying it off. Using all his tax refunds and bonuses, he made the final payment just two years and six days after his graduation.

With his student loan debt cleared away, he began saving his tax refunds, with the goal of buying a home. He didn’t apply any of his refund money to splurges; instead, he saved for fun and vacation with his regular income. The refunds were earmarked for bigger things.

“I treated it like it was extra money that I didn’t need to live on,” Rosenberg says. “I always encourage people to think long term, not short term.”

Others believe that giving yourself license to splurge with part of your refund helps you save the rest. Stephanie Halligan, a financial consultant and blogger, signs a contract with herself before she does her taxes, allocating 50 percent of her refund to student loans and 25 percent to long-term savings. She can spend the remaining 25 percent on whatever she wants.

“It’s easy to react on impulse and emotion when your refund hits, so prepare now for what you’ll do with that moolah later,” she advises on her personal finance website, The Empowered Dollar. If you’re getting a big refund, a check in the ballpark of $1,000 or more for taxpayers who don’t have a side business, consider adjusting your withholding so that you’ll have that money available to you during the year. But those who don’t have substantial savings want to avoid a scenario in which they owe four figures to the IRS at tax time.

“I think people should withhold the maximum they can withhold,” Bonelli says. Rosenberg concurs. As his businesses, running Narrow Bridge Finance and building websites, have grown, his refunds have shrunk. Last year he had to pay the IRS.

Here are the seven smartest things you can do with your refund:

Pay down debt.

If you have any consumer debt, student loans, credit card balances or installment loans, pay those off before using your refund for any other purpose. Car payments and home mortgages aren’t in this category, but you can consider paying extra principal.

Add to your savings.

“You can never save enough,” Bonelli says. You can use the money to build up your emergency fund, your kids’ college funds or put it toward a specific goal, such as buying a house or a car or financing a big vacation.

Add to your retirement accounts.

If you put $2,500 from this year’s tax refund into an IRA, it would grow to $8,500 in 25 years, even at a modest 5 percent rate of return, TurboTax calculates. If you saved $2,500 every year for 25 years, you’d end up with more than $130,000 at that same 5 percent rate of return.

Invest in yourself.

This could mean taking a class in investing, studying something that interests you or even taking a big trip. “Do something that enriches yourself or adds value to your life,” Bonelli says. She is planning to take a class in art therapy this year using money from her refund.

Improve your home.

Consider putting your refund to good use by adding insulation, replacing old windows and doors or other improvements that would save energy, and therefore money. Or perhaps it’s time to remodel your bathroom or kitchen. You’re adding value to your home at the same time you’re improving your living experience.

Apply your refund toward next year’s taxes.

This is common among self-employed taxpayers, who are required to pay quarterly taxes since they don’t have taxes withheld. By applying any overpayment toward upcoming tax payments, you can free up other cash.

Splurge on something you’ve always wanted to do.

If you’re out of debt and have substantial savings, this may be the time to take the trip to Antarctica or Australia that you’ve always dreamed of taking. Such an experience can be life-changing, and you never know what impact it will have on your future until you actually do it.

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This article originally appeared at http://www.dailyfinance.com/2014/03/31/smart-tax-refund-strategies/; reprinted by permission.

Steve Jobs Retires

September 8, 2011 by Helping Families Flourish, posted in eFlourishing Article

I’m sad.

One of the most creative and independent business minds of the twentieth century has told us that he’s about to pass from this world. No, he didn’t say that exactly, but anyone who knows anything at all about his personality knows that he’s not a quitter; and Steve Jobs is quitting. He’s stepped down, voluntarily, from his $1 a year job as CEO of Apple.

It never was about the money. It’s always been about loving life. And, therein lies a lesson for all of us. Mr. Jobs was an orphan and a college dropout, who – just for the fun and excitement of it – reinvented four industries.

First, he introduced the personal computer, the Apple I (1976), and later, the Apple II, and the MAC, with its revolutionary graphical-user-interface. Then there was the movie industry and Pixar, with its revolutionary computer animation technology; Toy Story (1995) was the first. Then Mr. Jobs set his sights on the music industry, creating the Ipod (2001), so that you can now carry up to forty thousand songs in your pocket or purse. And, finally, Mr. Jobs reinvented the telephone industry with the introduction of the Iphone (2007). Given enough life-time, Steve Jobs might well have transformed television and who knows what else; but sadly, that now seems unlikely. Mr. Jobs has been battling cancer since 2003, and he seems finally resigned to defeat.

Much has been written about Steve Jobs, and I’ve read all that I could find. Right now, I’m waiting for Walter Isaacson’s biography, Steve Jobs, which is to be released in November by Simon and Schuster. But, today, I urge you just to read Steve Jobs in his own words here. His 2005 commencement address at Stanford, Find What You Love, tells you everything you need to know about Steve Jobs’ character and personality.

Yes, I’m a little sad, but I’m still grateful to have lived in a world, and in a country, where a Steve Jobs is still possible.

PATIENCE, DISCIPLINE, and CONFIDENCE in the FUTURE! mh

Washington’s Purposeful Will

November 16, 2010 by Helping Families Flourish, posted in eFlourishing Article

Originally published in eFlourishing Issue 34, October 27, 2010.

I’ve just recently joined a professional development collaborative led by John A. Warnick, founder and CEO of the Purposeful Planning Institute, based in Denver. John A. was formerly a partner in the Denver office of Holme Roberts & Owen LLP, a prestigious international law firm.

The Purposeful Planning Institute provides its collaborators with weekly and monthly conference calls and regular on-site training sessions at varying locations around the country. I expect to add to my understanding of issues related to intergenerational wealth transfer from this collaborative, and I hope to translate what I learn into practical benefits for clients.

This week, though, I just want to share something I gained from a personal telephone conversation with John A., and from my membership in the Purposeful Planning Institute collaborative.

George Washington – my great-grandfather’s namesake – has taken a lot of heat over the past couple of decades – despite his indispensable role in America’s founding – because, it is alleged, he didn’t free his own slaves. In response to that line of thinking, I’ve always said that the man deserves immeasurable credit for helping to lay the foundation for the actions of Abraham Lincoln and others, who are more widely recognized for their advancement of civil rights equality. And, I’ve said, you have to give a man his historical context.

So, I was delighted to learn about Washington’s 16-page, handwritten will. You can go online and google it for yourself, but here, thanks to John A. Warnick, is a transcript of the relevant portion.

Upon the decease of my wife, it is my Will & desire that all the Slaves which I hold in my own right shall receive their freedom. —To emancipate them during her life, would, tho’ earnestly wished by me, be attended with such insuperable difficulties…And whereas among those who will receive freedome according to this devise, there may be some, who from old age or bodily infirmities, and others who on account of their infancy, that will be unable to support themselves; it is my Will and desire that all…shall be comfortably cloathed & fed by my heirs while they live; —…And I do expressly forbid the Sale, or transportation out of the said Commonwealth, of any Slave I may die possessed of, under any pretence whatsoever. —And I do most pointedly, and most solemnly enjoin upon my Executors…to see that this clause respecting Slaves…be religiously fulfilled.

Washington went on to establish a trust fund for the establishment of a free school for educating the children of poor and indigent slaves.

Isn’t it amazing what I didn’t learn in school? Until next week,

PATIENCE, DISCIPLINE, and CONFIDENCE in the FUTURE! Mh

John A. Warnick and Purposeful Planning Institute are not affiliated with, nor endorsed by, LPL Financial.

Thank you, Dr. Lindzen

November 9, 2010 by Helping Families Flourish, posted in eFlourishing Article

Originally Published in eFlourishing Issue 6, March 2, 2010

Over the past twenty plus years, Dr. Richard Lindzen has been one of the scientists most maligned by the global warming orthodoxy. Dr. Lindzen, an atmospheric physicist, is the Alfred P. Sloan Professor of Meteorology at MIT. Naturally, that qualification didn’t prevent his being labeled (should I say libeled?) as a “global warming denier” and an “oil industry puppet” by global warming alarmists. Incidentally, I don’t feel either of those charges are true. More to the point of this essay, Dr. Lindzen’s criticisms of the global warming establishment are now being vindicated, albeit ever so quietly in the media.

One very good example of Dr. Lindzen’s long-standing concerns is a paper written for the Cato Institute, published in the Spring 1992 issue of their periodical, Regulation. The title of the article was Global Warming: The Origin and Nature of the Alleged Scientific Consensus.

My favorite line from that 14-page report is this matter-of-fact statement in the first paragraph:

I must state at the outset, that, as a scientist, I can find no substantive basis for the warming scenarios being popularly described. Moreover, according to many studies I have read by economists, agronomists, and hydrologists, there would be little difficulty adapting to such warming if it were to occur.

Dr. Lindzen goes on to acknowledge a substantial increase in CO₂levels over the past two hundred years. He then discusses popular misunderstandings of the “greenhouse effect” and the contribution of CO₂according to his research. For example:

The main absorbers of infrared in the atmosphere are water vapor and clouds. Even if all other greenhouse gases (such as carbon dioxide and methane) were to disappear, we would still be left with over 98% of the current greenhouse effect.

He discusses the science of atmospheric temperature variation – and lack thereof – at some length, but comes to the crux of the current problem in a section entitled Consensus and the Current “Popular Vision” (quotes in the original):

The growth of environmental advocacy since the 1970’s has been phenomenal. In Europe the movement centered on the formation of Green parties; in the United States the movement centered on the development of large public interest advocacy groups. Those lobbying groups have budgets of several hundred million dollars and employ about 50,000 people; their support is highly valued by political figures. As with any large groups, self-perpetuation becomes a crucial concern. “Global Warming” has become one of the major battle cries in their fundraising efforts. At the same time, the media unquestionably accept the pronouncements of those groups as objective truth.

Dr. Lindzen then offers several pages of examples of highly qualified, but skeptical, scientists being denied funding for their climate science research and/or being denied the opportunity to publish their findings. He then asks,

Why, one might wonder, is there such insistence on scientific uniformity on the warming issue? After all, unanimity in science is virtually non-existent on far less complex matters. …Biologists and physicians are rarely asked to endorse some theory in high energy physics. Apparently, when one comes to “global warming”, any scientist’s agreement will do. The answer almost certainly lies in politics.

As to the motivation of the global warming alarmists, Dr. Lindzen quotes former Berkeley professor of political science, Dr. Aaron Wildavsky:

Warming (and warming alone), through its primary antidote of withdrawing carbon from production and consumption, is capable of realizing the environmentalist’s dream of an egalitarian society based on the rejection of economic growth in favor of a smaller population’s eating lower on the food chain, consuming a lot less, and sharing a much lower level of resources much more equally.

Dr. Lindzen does have a sense of humor about the environmentalist lobby’s proposed diminutions of human progress:

In many ways Wildavsky’s observation does not go far enough. The point is that carbon dioxide is vitally central to industry, transportation, modern life, and life in general. It has been joked that carbon dioxide controls would permit us to inhale as much as we wish; only exhaling would be controlled.

In my opinion, the end of the global warming hysteria is near, if not at hand. Cap and trade – the death of industry tax on carbon emissions – is itself all but dead. A year ago that measure seemed almost sure to pass through Congress and become the law of the land. It was supported not just by Obama, Reed, and Pelosi, et al, but by such notable republicans as John McCain and Lindsay Graham.

It is my sincerest hope that scientists like Dr. Richard Lindzen will finally be recognized for their beliefs. If there is such a thing as a Galileo Galilei Prize for Scientific Integrity, I feel Dr. Richard Lindzen is among the most deserving.

Made in the USA

October 28, 2010 by Helping Families Flourish, posted in eFlourishing Article

Originally Published in eFlourishing Issue 8, March 16, 2010

We hear our friends say, “The US doesn’t make anything here anymore!”

But we do. Last Thursday, the Commerce Department announced that as a percentage (39%) of the growth in our Gross Domestic Product (5.9% in 4Q2009), goods exported from the US hit a thirteen-year high in 4Q2009. But wait! That’s not the good news, which is that the US is still – far and away – the number one manufacturer in the world, producing more than 20% of global output in 2009. China was number two at 12%, Japan was number three at 10%, Germany was number four at 7%, and no other country contributed more than 4% of global manufacturing output. (All data from “Made in America”, LPL Weekly Market Commentary by Jeffrey Kleintop dated March 15, 2010)

Just look at what we produce. While China produces toys and Japan produces cameras, the US produces and exports technical and machine tools, medical equipment, computer software, pharmaceuticals, commercial airplanes, defense products, satellites, and myriad other high-value-per-unit products.

Let others have their cheap labor. These high-value-per unit products tell us that our most important comparative advantages are a prodigious pool of intellectual talent and an ocean of invested capital – each the result of two hundred years under a (relatively free) capitalist system. Our comparative advantages are not easily duplicated. I believe our greatest threats are not overseas sweat shops and call centers, but restrictions of free trade and government-enforced price controls. Sorry; I do digress.

Old Europe and Japan are stuck in the muck of semi-socialism, as fourth quarter annualized Gross Domestic Product was less than 1%. Will they ever learn? More than 50% of US exports go to emerging markets. Yes, China is an emerging market, but so are Brazil and India. Those are among the many countries we sell to that are experiencing high economic growth rates. We do want prosperous customers, do we not? (All data from “Made in America”, LPL Weekly Market Commentary by Jeffrey Kleintop, CFA dated March 15, 2010)

Here is the best news for investors: The S&P 500 companies derive more than 40% of their revenue from global markets. (“Made in America”, LPL Weekly Market Commentary by Jeffrey Kleintop, CFA date March 15, 2010) According to LPL Research, American business sectors with the highest rate of export-driven sales are – not surprisingly – Information Technology, Industrials, Materials, and Energy.

Despite Europe’s problems and our own currently high unemployment rate, The Global Capitalist Revolution is still growing – and in the long run – I feel it cannot be stopped. In my opinion, American manufacturing will remain an important contributor to worldwide economic progress and rising living standards for American workers.

The Last of the Mohicans, Almost

October 21, 2010January 4, 2018 by Helping Families Flourish, posted in eFlourishing Article

Originally Published in eFlourishing Issue 10, May 30, 2010

There is nothing new under the sun, but the history you don’t know; or in my case, the genealogy.

One of the oldest Indian reservations in North America is reserve land granted to the Schaghticoke Indians (descendants of the Mohicans) in the year 1736 by the General Assembly of the Colony of Connecticut, forty years prior to the formation of the United States. As far as I know, the Schaghticoke do not run a casino. Still, they have my attention.

My great-grandfather, George Washington Harvey (1855 – 1939) was married to Mary Ann Winterbottom (1857- 1897); Mary Ann’s mother was Mary Jane Bearce (1836 – 1901). Her father was James Winterbottom, who was born in England in 1828.

Mary Jane Bearce was the daughter of Sarah Austin (1795 – 1880) and Eli Hervey Bearse (1793 – 1857). Here is the entry point of my interest in the Schaghticoke Indians:

Oliver Canfield* (1729 – 1818), part Schaghticoke himself, had a housekeeper named Sarah Mauwee (1732 – ?), daughter of Joseph Mauwee, a Sachem (chief) of the Schaghticoke Nation. Oliver and Sarah conceived a daughter, who they named Freelove. Yes, that was her real name. Freelove Canfield was born on Long Mountain, Connecticut in 1758. Oliver and his wife, Tabitha Roberts (1732 – 1818), raised Freelove, along with their other three children. Tabitha later moved to Somme, Picardie, France, which is where she died.

On March 27, 1789, Freelove Canfield was married to Josiah Bearse, III* (1755 – 1845). Josiah was also part Schaghticoke. Together, Josiah and Freelove had eleven children. One of those children was Eli Hervey Bearse.

Yes, Eli Hervey Bearse is my great, great, great, great grandfather. Freelove Canfield Bearse is my great, great, great, great, great grandmother. Sarah Mauwee is my… Well, you get the idea.

Now you know what I did this past weekend. Gosh, that was fun – and I’m just getting started. http://www.ancestry.com

*Josiah Bearse, III, and Oliver Canfield both fought in the American Army during the Revolutionary War.

A Brief Economic Update on Oil

October 19, 2010 by Helping Families Flourish, posted in eFlourishing Article

Originally Published in eFlourishing Issue 10, May 30, 2010

The theory of “Peak Oil”, like the theory of “anthropogenic global warming”, is, I believe, factually unsustainable. Both theories conveniently discount the scope and effects of natural phenomena and the unlimited potential of the liberated human mind. Fortunately, as Mrs. Cunningham taught her history students nearly fifty years ago, the truth will out. According to a recent Gallup poll (http://www.gallup.com/poll/126716/Environmental-Issues-Year-Low-Concern.aspx) , the number of people who take “Global Warming” seriously has fallen to 28%. “Peak Oil” is headed for the dust-bin of science, too.

Oil production increased in the Gulf of Mexico and North Dakota last year. Those increases more than offset declines elsewhere in the U.S. for the first annual increase in U.S. oil production since 1991. The U.S. Energy Information Administration (EIA) reported in its March 2010 Short-Term Energy Outlook that U.S. oil production in 2009 averaged 5.32 million barrels a day, up from 4.95 million in 2008. That’s an 8% increase.

Several weeks ago, a subscriber/client sent me a link to some information about the Bakken Formation in North Dakota. I checked it out. According to a 2008 report by the U.S. Geological Survey, Bakken could increase technically recoverable reserves by up to 4 billion barrels. Though newsletter and stock promoters often exaggerate the potential of the Bakken Formation, the recent EIA Outlook shows that Bakken does add significantly to production. The increases in production in both the Gulf of Mexico and North Dakota’s Bakken Formation show – yet again – how oil company investments in rapidly developing technology can increase both known reserves and current oil production.

As the economist Dr. Reisman reminds us, from its surface to its center – a distance of four thousand miles – the Earth is nothing but a solidly packed ball of natural resources. Even with the scientific and technological progress we’ve made during the 150-year history of the oil industry, we’ve succeeded in drilling in just a few places to a depth of only about seven miles – a pin prick.

Happy Birthday, Mr. Jefferson!

October 14, 2010 by Helping Families Flourish, posted in eFlourishing Article

Originally Published in eFlourishing Issue 12, April 19, 2010

OK, I’m late to the party.

Thomas Jefferson was born on April 13, 1743. That I missed Mr. Jefferson’s birthday is more than an oversight. It is an injustice. Thomas Jefferson’s birthday should be a bold, red-numbered day, just as Washington’s and Lincoln’s once were, and should be again. Washington was the father of his country, Lincoln its savior, and Thomas Jefferson was, in a very real sense, the author of America.

Like America itself, Thomas Jefferson was, first and foremost, a product of The Age of Enlightenment. In that age and in Jefferson’s mind, Reason was paramount:

“Fix Reason firmly to her seat and call to her tribunal every fact, every opinion . . . Reason and free inquiry are the only effectual agents against error”

In that spirit, he directed his nephew, Peter Carr, in 1787:

“Question with boldness even the existence of God; because if there be one, he must more approve the homage of Reason, than that of blindfolded fear.”

These were not just pretty words. Jefferson honored his Enlightenment philosophy through his own intellectual and productive achievements. Intellectual and productive independence were and are essential to a flourishing and happy life:

“If you always lean on your master, you will never be able to proceed without him. It is part of the American character to consider nothing as desperate . . .to surmount every difficulty . . . Americans are obliged to invent and to execute; to find the means within ourselves, and not to lean on others.”

As the key author of the Declaration of Independence and a strong supporter of James Madison’s Bill of Rights, Thomas Jefferson, as much as anyone, defined our rights as citizens of the United States of America. His theory of government, so eloquently summarized in the Declaration of Independence, was that every person possesses by nature certain “unalienable rights,” among which are “life, liberty, and the pursuit of happiness”. He did not say, nor does our Constitution say, that all men have the right to health care or houses, to be provided by others through the forced redistribution of wealth.

Importantly, and on the contrary, Jefferson said:

“Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated [in the Constitution].”

Even more to the point, Jefferson wrote in a letter to a friend, Joseph Milligan:

“To take from one because it is thought his own industry . . . has acquired too much, in order to spare others who . . . have not exercised equal industry and skill is to violate the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it.”

Jefferson understood, as so few do today, that individual rights and enlightened self-interest are essential to the harmony of human pursuits; that forced redistribution of wealth – whether by the government or a gang of thugs (Did I just repeat myself?) – is by definition a conflict of individual interests and an abrogation of human rights.

Thanks to Thomas Jefferson, for the first time in human history, we have words on paper – in our nation’s founding documents – that guarantee each person’s right to live for his own happiness and flourishing, rather than as a pawn of the government. It is now our responsibility to reclaim those words and give them back their true meaning.

Happy Birthday, Mr. Jefferson… and Thank You!

[For more on the life of Thomas Jefferson, see In Pursuit of Reason: The Life of Thomas Jefferson, Noble E. Cunningham, Jr., Ballantine Books, 1988. Available in paperback from Amazon for $13.50]

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