Ingenuity, determination will keep America flying high
BY TERRY SAVAGE May 30, 2010
American values like innovation and determination will lift the country out of its economic woes.
Updated: May 3, 2013 12:14PM
Memorial Day is the perfect time to look backward and honor those who have given their lives for our American democracy. And it is also the perfect time to look forward into the future to think about the kind of country we want to preserve.
Is optimism justified when the economic statistics that impact you continue to look gloomy? Can we look forward to job gains, when 460,000 people file new claims for unemployment in one week? When another 6,500 families receive a foreclosure notice every day? When our federal budget deficit climbs $4.12 billion every day?
Can you be optimistic when China suddenly seems to hold the financial aces -- when their affirmation of support for the Euro is the one factor that can cause global markets to soar? Or when, in the same week, the Chinese lecure America on our growing national debt?
For the first time in history, many Americans are doubting the ability of our country to lead the world into a new era of prosperity. And, equally importantly, many are doubting that our children will have more prosperous and satisfying lives than our generation.
Pooring of America
That belief that future generations will live better lives is the cornerstone of the American dream. But a respected private money manager recently told me that we're living through "the pooring of America."
"Well," he began, "you've had years of 'living for the moment' financed by borrowing from the future. Now the bill has come due. And it can't possibly be repaid in one or two years -- especially when you keep adding to the debt.
"We're in the midst of liquidating mortgage debt and private-sector debt through bankruptcies and writeoffs. But much of that debt has been passed on to the federal and state governments. They've also been living in the present and borrowing from tomorrow.
"Wait until all those people see that there is no way they will get the government pensions they have been promised. Instead of retiring, they'll be looking to go back to work -- competing with the younger generation for a dwindling number of real jobs. We've sent so many jobs overseas that are never coming back. And the jobs that remain will pay less, so they won't be able to buy consumer goods, much less afford luxuries like college and homes. It's the pooring of America."
Although I do know the bills from prior excesses must be repaid, I disagree with his assessment that America is on an irrevocable downhill slide.
When a crisis occurs in the world, all eyes turn to America, for leadership. When it's a global financial crisis, all money gravitates to America, as we've seen in recent weeks.
From our grandest exploits to our microscopic breakthroughs, we have led the world forward. And it's not over. For many years I have suggested that nanotechnology would create revolutionary ways of sourcing energy, food, and healthcare. Now it's happening and we're slow to take notice.
Just this month, American genetic scientist Dr. Craig Venter created a synthetic, living cell! You might not have noticed that landmark moment in the midst of worrying about the stock market. But it is being hailed as "one of the most important scientific achievements in the history of mankind."
Venter's work was not done at the direction of government, but in a private lab, funded with $40 million of private capital. And he has applied for patents on his process.
In 1973, Stanford University and the University of California at San Francisco received patents for splicing genes. The resulting $200 million in royalties funded even more research, and inspired more scientists in the field.
Yes, technology can cause stock market glitches and deep-water drilling calamities. But it can also advance society in ways never dreamed of -- if we create an environment that fosters innovation.
Show me one economic system that has ever done a better job of organizing long-term economic growth than the free markets. The old Soviet Union tried it -- and those "Five-Year Plans" left its population starving. Cuba is still trying it. But even China has recognized the power of individual incentives versus collective proclamations to move an economy forward.
None of us is "entitled" to everything we want. Our Constitution guarantees "equal opportunity" -- not equal results. That's something to reflect upon today.
Memorial Day is a holiday designed to commemorate the sacrifices of those who defended our right to argue about economic policies. Surely, they never thought that we would debate giving up on the system for which they fought and died.
Just as oil drillers make huge mistakes, the free enterprise system has its share of faults. Taking great risks to reach prosperity always has a potential downside. But the biggest risk is believing that government directives can create a better way to prosperity for all. That's the Savage Truth.
Terry Savage is a registered investment adviser and a co-host of ''Monsters and Money in the Morning'' on WBBM-Channel 2 from 5 to 7 a.m. weekdays.