The Goose That Laid the Golden Eggs is one of Aesop’s most famous fables.

A man and his wife had the good fortune to possess a goose which laid a golden egg every day. Lucky though they were, they soon began to think they were not getting rich fast enough, and, imagining the bird must be made of gold inside, they decided to kill it. Then, they thought, they could obtain the whole store of precious metal at once; however, upon cutting the goose open, they found its innards to be like that of any other goose.  (source: Wikipedia)

Could you imagine if Aesop lived in the age of blogging? Anyway, I thought I’d follow through with an explanation of my reference to Nancy Pelosi and Aesop’s Golden Goose fable in yesterday’s The Pot Calling the Kettle “Black or White” post.  The fable is self-explanatory, so I won’t belabor its ties to Pelosi’s abrupt changes to our wealth-creating economic system.   Instead, I will simply quote Wikipedia’s morals of the story:

• Greed destroys the source of good.
• Think before you act.
• Those who want too much lose everything.

Wiki goes on to say:  “In the English language, ‘Killing the golden goose’ has become a metaphor for any short-sighted action that may bring an immediate reward, but will ultimately prove disastrous.”

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Captain Kirk and the Unintended Consequence of Compassion (Part IV)

Craig, a frequent commenter on bearonbusiness, struck a cord with a recent comment. An off-key cord that is.  His comment opened with:

Defining Cuba as socialist is debatable. I would say Stalinist not socialist but that’s a debate on its own. True socialist states are rare and like unfettered capitalism, usually break down before their pure form due to greed and ultimately morph into something else. There are elements of multiple economic systems that work with examples all over the world yet here we seem to always end up at the black and white with no gray.

Craig, I agree that life is rarely black or white. Nonetheless, Cuba is exhibit one in the shortcomings of a socialistic society. How would Cuba look if it weren’t for the Stalinist aspects? If you have an example, please let me know. Perhaps there is a reason why socialism and dictatorship get intermixed: for socialism to work, you must control people’s desires (“you get what society thinks you need”) and actions (“you’ll produce what society thinks you should produce”).

Craig couldn’t help himself but to continue:

Maybe we should look at other systems and take the best of all of them and evolve and progress for whatever we’re talking about be it economics, health care etc. I believe that America was called the great experiment so I highly doubt after less than 250 years we got it just right. We already have elements of nationalization but choose not to categorizes them as such for some fear of what… the slippery slope?

Craig, I agree we should work to improve our system. My point was clearly that we need to do so cautiously and we need to do it with great humility. America’s “great experiment” is working far greater than any system in history. Do we really believe that Nancy Pelosi appreciates what makes our system tick?  Do we really believe her ideas are about “evolving and progressing” our great system?   Or is she just spreading to her constituents the wealth that our system has produced?  The Aesop fable The Goose That Laid the Golden Eggs comes to mind (see future post).

I believe Pelosi has not demonstrated an appreciation for the American economic model.  Yet she is not the least bit shy about tearing it apart at its seams.  President Obama, to my great disappointment, seems to be on board with massive and abrupt change.

Craig then ended with a thunder:

I keep hearing ‘We need to let it crash so it bounces back!’… like it’s some mechanical process in a vacuum.  Does anyone really know how bad it would get if we did nothing at all?  And can a government do nothing at all without suffering a fatal blow as we experience ‘lower lows’ for a period of time?

Doesn’t this make you guilty of being “black or white”?  Are our only choices to (a) pass a 1,000 page bill in a day that changes so much about our economic system-with nary a time for debate or (b) do nothing?  Craig, are you the Pot calling the Kettle “black or white”?

Unless you subscribe to the parallel universes theory, we will never know if doing nothing would have been better or worse.  And btw, we will never know if President Obama saved or created 3.5M jobs-though that is a topic for a later post titled “Zayo Management Team promises Investors that it will either preserve or grow its revenue by $20M.”

Nonetheless, I don’t think I have heard anyone suggest the “do nothing at all” approach.  Certainly, my suggestion is not that we rest on our laurels.  My point is this:  I believe that we would be better served if the policies of the past three months were laser focused on attending to the crises.  Instead, I observe that the crises was used as a cover to railroad in the far-left-wing democratic agenda.  I believe open and honest dialogue was skipped.   I believe the promise of involving both sides of the aisle was broken.  I’m still glad Obama was elected president–as the historical significance of his presidency is important to our nation.  But, like many others, I will want to see a lot more Republicans in Congress in 2011.

Anyway, thanks for the comments and for reading bearonbusiness.

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Mr. President: Sieze the Moment

My series on Captain Kirk and the Unintended Consequences of Compassion prompted a lot of comments.  Thank you everyone who responded.  Here are some of the highlights:

John Fontana provided several comments including “Very well done and carefully worded. Could not agree with you more“.  I guess I forgive John for his comments of a couple months ago.      John also commented:  “…an entire generation…of people [seems to have forgotten] that equal opportunity does not guarantee equal results; that if left alone innovation and long term growth are achieved thru a series of failures.“  Well said John.

A different John said: “It’s not clear to me that compassion for the people is our biggest risk here – The government seems to have a significant bias for the super-wealthy that could be a far greater problem.”   I too am frustrated by the bailout of the financial institutions.  Perhaps something significant was necessary but I agree that very weathy people benefited in an inappropriate way.  But, John, you are taking your eye off of the bigger picture of socialistic policies.

Scott contributed a few long comments, much of which I didn’t agree with or didn’t fully understand.  Buried in his comment was “This administration and the majority in the legislative branch are starting to prove they are just as arrogant and stupid as the previous administration. I am now convinced that obama is very naive…“   The choice of words is inflammatory but the sentiment is something I am tending toward.   It is amazing that the Bush administration was ridden out of town–based on good reason I might add–for being arrogant, naive, and stubborn.  So shortly into this new administration, the same tendencies are being displayed.  Only difference is that Bush displayed them in International politics whereas Obama is displaying them in domestic.

Darren added: “There’s also the old theory of ‘Creative Destruction’ from which turned into the term ‘disruptive innovation’ in the 1990’s.“  Good point.

Rob said:  “This post feels like part of a process whereby someone comes to the slow conclusion that they are regretting putting in office the person they voted for. Smaller government is good. Obama did not run on that platform.“  Rob–don’t rub it in. I used to tell Democrats that they couldn’t blame me for voting for Bush since they put John Kerry up as the alternative.   Now I’ll say don’t blame me for voting for Obama as the Republicans came up short in their alternative.

Bill said: “Sounds to me like Captain Kirk would have the US automakers and all other ‘too big to fail’ companies die their violent deaths, and have society learn, grow and rebuild from the events, rather than ‘humanely’ allow them to limp along, draining our society for 500 years.“  Well said.  Except Kirk would provide reasonable assistance so long as the “victims” are willing to help themselves.

From the get-go, MH caught onto where I was taking this:   “I think you’re making the comparison to our current economic “war”. The government is trying to simulate a healthy economy which will cause this to drag out longer than necessary. If they step back, let us feel the destruction of the mistakes, then recovery can begin and lessons can be learned.” Very perceptive, MH.

Rico opined:  “Evolution that while painful to some of us (I know, my number came up and I am unemployed now), is necessary nevertheless. Let us fight the good war, learn from it, minimize collateral damage, and if comes to it, die with honor.” Thanks for sharing your thoughts Rico. 

Steve showed his Trekie bent:  “…I am a Star Trek fan… I find it interesting to see how much of the advanced futuristic technology depicted in the show has come to be common place today.“  Then Steve couldn’t help himself, as he closed his comment with “live long and prosper.”

Finally, Mark chided the notion of looking to William Shatner for life lessons:   Instead, Mark pointed to “Cheryl Ladd in the trailer for Charlie’s Angels.“   If you are referring to the wet hair, bikini, boat clip, I will concede the point.

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Comments on BearonBusiness
I know I shouldn’t mix politics with business!

Yesterday was Part III of Captain Kirk and the Unintended Consequence of Compassion.  The moral of the Captain Kirk episode was applied to today’s economic woes.  Though ugly and painful, market corrections necessary to a prosperous long-term economy.  If government and society dampens the pain, a multi-generational war of our own creation might result.   This war has a name—Socialism.

You don’t buy it?  You think socialism has a bad rap?    My question to you is this:  have you traveled to Cuba lately?

In yesterday’s post, I cited the source of my conviction:

If you have any sense of history, you know that the prosperity created by the American free market system  is without precedence.   This is especially true as it pertains to the middle class.   Never has a society created such a large and prosperous middle class.   Also unique in the American society is how often an individual can start poor and end up wealthy.   Regardless of where you grew up, what color your skin is, or what you believe in, you have a bonafide opportunity to achieve wealth.

My question today is “Can American be better?”   That is, can we build on all that is good and make it even better? After all, this is the promise that got Barack Obama elected.   Well, this promise AND the legacy of George Bush.   AND an opposing candidate who was uninspiring and up there in age.  AND an economy that was unraveling in the days leading up to the election.  AND an opponent’s running mate that though hot, ready-to-be-president she was not.

Let’s get back on track.  “Can America be better?”  Sure.  You bet we can.   That is part of what makes us great.  But here is my point:

We need to do this cautiously, and we need to do it with great humility.  In our tangled mess of an economic system, there is a recipe that works.   It inspires people to work hard.  It rewards creativity.   It gives the underprivileged a bona fide shot at success.  It creates great wealth–enough to allow America to ship billions of dollars oversees to help people throughout the world.  Let us marvel at how well our economic system works.

My issue with Washington is not that they aspire to make our system better.  I understand the altruistic desires around “healthcare, education, and a green earth”.   My concern stems from the lack of appreciation of what our economic system has achieved in its current form.  Many seem to despise the system or, at a minimum, ignore its accomplishments.   Instead of honest debate about how to make it better, massive changes were railroaded in without allowing time to even understand what was being done.  For decades, we might need to live with a mess that we do not yet understand.  In our quest to make all better, we might damage what has made our economic system so special.

The unintended consequence of our compassion might cripple an individual’s ability to prosper from their own hard work, smarts, persistence, and good fortune.   Misguided social engineering might level the playing field by greatly reducing society’s overall prosperity.

Again I will ask:  have you traveled to Cuba lately?

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If you haven’t already, you might want to read  Captain Kirk and the Unintended Consequence of Compassion and Captain Kirk and the Unintended Consequence of Compassion (Part II). They tell the story of “A Taste of Armageddon”–a first season Star Trek classic.   Captain Kirk encounters a civilization that is marred in a 500 year war–but one that is fought through computer simulation.  This feat of social engineering prevents the painful death and massive destruction of a real war.  But it doesn’t prevent the killing itself–for if your number comes up at the end of the computer game, your duty is to report to a death chamber for your humane elimination.  Kirk ends the war by destroying the computer.   Faced with the prospect of a real war, the arch rivals make peace and their 500 year war ends.   Start to finish, the multi-century problem was solved in 1 hour, including commercials.

The moral of the story:  the unintended consequence of compassion was that the war continued for generations.

What does this have to do with America circa 2009?   A lot.    Market corrections are ugly.   People lose jobs.   Life savings evaporate.   Homes are foreclosed.  Businesses go bankrupt.

It is ugly and painful.

But it is necessary ingredient to a prosperous long-term economy.

Why can I say this with conviction?  If you have any sense of history, you know that the prosperity created by the American free market system  is without precedence.   This is especially true as it pertains to the middle class.   Never has a society created such a large and prosperous middle class.

Also unique in the American society is how often an individual can start poor and end up wealthy.   Regardless of where you grew up, what color your skin is, or what you believe in, you have a bonafide opportunity to achieve wealth.   Is it harder on some than others?  Of course, but less so as every year ticks by.   We have chipped away from the unlevel playing field and, over a period of just a handful of decades, the field is noticably more level.

The destruction of the economy forces society to adjust.  Get smarter with investing.  Hold corporations more accountable.   Be more responsible with personal financial management.  Or face the consequences.

But what happens if we dampen the consequences?   What happens if we don’t let businesses fail?  What happens if we protect salaries and pensions, even as we watch an industry such as auto die a slow death?  What happens if we take too much money from those who achieved success and give it to those who haven’t?  At what point are we hurting society by misplaced compassion?   When do we cross the line where we are doing great harm to those people that we think we are helping?

I’ll end this post here.  But I’ll pick it up tomorrow witht the question:  “Can we do better?”.

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Teleportation and the Obsolescence of Fiber Optics

Part 1 of   Captain Kirk and the Unintended Consequence of Compassion ended with James Kirk destroying the computer that simulated war.   Kirk saved the U.S.S. Enterprise from needing to turn over its crew members over to die–though their deaths would have been humane.  You see, the civilization that the Star Trek gang stumbled upon decided that war was unnecessarily cruel.  Sure, people had to die–that part they understood.  But why did the deaths need to be so painful and gory.  And couldn’t the collateral damage be avoided?

So they put their best social engineering to work.   And they decided that they could turn over the fighting of the war to computer simulations.   At the end of each computer battle, Social Security Numbers would pop out like lottery balls.  Only in this lottery, you got the gas chamber instead of a pile of money.    War was thus more compassionate.   One catch though–this war lasted 500 years.

But then the leader of U.S.S. Enterprise beamed down and came to the rescue.  In a passionate outburst that made Phil Donahue envious, Captain Kirk pointed out the unintended consequence of the simulation.  War causes violent death.  War causes massive destruction.   This is why war is to be avoided.   This is why civilizations must act responsibly so as to prevent war.  Violent death and massive destruction is the necessary deterrent.

Via social engineering, this kind-hearted civilization sought to make war more gentle.   But this social engineering came at a steep price–500 years of continuous war.  The incentive to prevent or end war disappeared with the removal of the violent death and massive destruction.  This lasted until Captain Kirk destroyed the computer and did a Phil-Donahue on them.  Once the simulation stopped running, peace was made and the war whose cause was long forgotten came to an immediate end.

Okay.   There you have it.  A lesson for 2009.   Hint–think domestic not international politics.   Explanation will arrive in a couple days.  In the meantime, tell me what you think.

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Teleportation and the Obsolescence of Fiber Optics

No worries.   I am not a Trekkie.   I don’t even have Star Trek on my Facebook list of favorite TV shows.  But immediately after the Godfather Trilogy, Pulp Fiction, and a Bruce Springsteen concert, there is no better bible for life lessons than Star Trek’s 3 seasons of everlasting fame.  And one of them is apropos in U.S. politics circa 2009.

Show number 23–”A Taste of Armageddon”–was a first season classic.   It aired on February 23, 1967.  For Chicago readers, this was around the time of the great Chicago snow storm of 1967.  I was four years old.

The U.S.S. Enterprise is transporting an Ambassador to distant star cluster.  Captain Kirk, who is accompanying the Ambassador, beams down and has a convo with the planet’s head honcho.  Kirk learns that his planet has been at war for 500 years with a nearby planet , one that was originally settled by their people but is now their sworn enemy.  They have been at war so long that they can’t even recall why.

Luckily, this inter-planet war is fought by compassionate nations.  Social engineering (read clue to today’s tie-in) evidently is one of their specialties.  These kind-hearted people discovered that the deaths that come with war are unnecessarily violent and the destruction is an avoidable by-product.   So they did away with the exploding devices.  Instead, the outcome of the battles was determined using a computer simulation.

A war is still a war even if computer simulations are used as substitutes for things that go pop.    But for war to be a war, deaths are a must.  So, when the computer spits out its results, the people calculated as casualties voluntarily report to dis-integration chambers to die.   The deaths are compassionate–you might say this is the change they came to believe in.

Enter U.S.S. Enterprise.  The computer incorporates the ship into its simulation and, as fate would have it, calculates that the Enterprise is destroyed.   Captain Kirk, bless his heart, refuses to cooperate and instead destroys the planet’s war computers.  “Not good”, cries out the planets’ leaders, as they know that this breaks the treaty that set up the simulated war.  Now a real interplanetary war is imminent.

Part II of the story on Monday…

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Captain Kirk and the Unintended Consequence of Compassion (Part II)
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