When the CEO's Speak Will We Listen?

John Jazwiec wrote:I am a CEO and someone who makes a lot of money.

If you are going to lead a company, there is no substitute for strong leadership. Part of being a strong leader is to take risks. There is an old saying that "there can be no breakthrough without a breakup". Unless a leader is willing to stand up for the long-run, call a competitors bluff, live with the short-term pain of the breakup, and be confident that taking a hard line stand will eventually lead to a breakthrough, they will never last in the top job.

As a high wealth earner I have three points I would like to make to Washington. One is that after my first $ 250,000 I just in invest my money into banks. While that my be good for banks, it does nothing for the economy's ability to create a multiplying effect because I am not going to spend the additional money on consumption.

The second is that I would would gladly have my marginal tax rates be higher so that the 99% of Americans with only 75% of the nation's wealth can prosper. I am not saying I academically believe in a progressive taxation. I am saying, that I can't make more money, if there is no thriving middle class to buy things I make.

Finally I am anti-government spending. More to the point I am against throwing too much money into too many pots. What I want is a national government to set strategic goals, and make a small amount of infrastructure investment bets that will eventually lead to long term growth.

The mythology of free enterprise alone leading to national wealth growth is an urban legend. The Erie canal that connected the Atlantic Ocean to the Great Lakes turned Manhattan from an island port to the world's financial center. No canal, no skyscrapers, no free enterprise.

The same can be said by the North building a railway and telegraph system that defeated the South, kept the Union in-tact and was used by free enterprise to productively exploit western expansion. FHA and the GI Bill provided free enterprise with an unprecedented educated middle class to exploit. The national interstate highway was built, despite the national debt being 60% of GDP, allowed suburban expansion and better supply chains. Finally the Apollo program led to many inventions we use today. Most impressive though was the inspiration of a generation to become engineers and become the world's greatest inventor.

In each case, came targeted government investment and then free enterprise and wealth creation of everyone.

Today all we are doing is arguing about how a fixed amount of wealth should be distributed, instead of targeted investment for long-term wealth creation. The next big thing is a world class infrastructure and green jobs. A nation like China has the political will to win this race in a flat world. While the U.S. is still fighting 20th century battles.

Until everyone understands that one percent of us, have 24 % of the nation's wealth and are not going to spend it. Until everyone understands that wealthy people have a vested interest in a vibrant middle-class and is more than happy to pay higher taxes to achieve it. And until we realize we need a federal government to be the chief national investor instead of the chief national spender, Rome will continue to burn.

John Jazwiec wrote:My father, who was an accountant, to this very day, still carries around a blue notepad, noting everything he has ever spent his money on. His idea of a good time, is making sure his checking account balances to the tee.

When I was 18, my father finally let me run my own checking account. He asked me to balance it after the first month and I failed. He asked me how was I ever going to make it in life without knowing where every cent was spent. I answered "I will just make more money".

It made total sense to me. But it made my Dad really mad. I was always looking forward and my father was always looking backward.

My father only saw a world of status quo, while I always saw a world where there was a difference between spending money and investing it.

Deficit hawks are analogous to my father, while progressives are analogous to his son.

Here is why I admit to being called a "government progressive". I am not a Democrat or Republican. I am totally against government spending. I am totally against spending trickles of money into too many pots. I am for setting ambitious national goals and placing one or two large government investment bets.

The mythology of Adam Smith's free enterprise has never been the source of American Exceptionalism. Briefly here is a chronicle of government progressiveness being the seed of free enterprise and not the other way around -

In the early 19th century the Erie Canal was built. It cost a fortune and was derided by newspapers. But after ten back breaking years, the Atlantic Ocean was connected to the Great Lakes. Manhattan went from a small island with a port, to become the financial capital of the world. No canal, no Manhattan skyscrapers and no great free enterprise.

Before the Civil War, railway and the telegraph connected the U.S. North. The civil war was not won by great military generals. It was won, because battle orders could be communicated in real time and ammunition's and food could be quickly supplied. The lasting legacy of the railway and the telegraph formed the foundation for economic free enterprise growth by a productive means for western expansion.

From after the Civil War until Woodward Wilson, the U.S. constantly went from boom to bust. The boom was created by westward expansion and the bust was due to speculation with unregulated banks. By President Wilson time, the boom's fuel had long since came to an end and the busts could only be cured by mega rich people like JP Morgan. The country was made up of a very few rich people and too many people who were mined to death when there were jobs and poverty when there were not jobs. Hence the creation of the Federal Reserve. Free enterprise was unleashed to everyone because of a national banking system.

After World War II, the government invested in FHA and the GI Bill. This lead to an unprecedented expansion of a vibrant middle class. Free enterprise benefited from unleashing the most educated middle class the world has ever seen.

Then President Eisenhower, with the debt at 60% of GDP, built the interstate highway system. Besides the jobs it created, this allowed educated workers to live in affordable housing outside the city and become mobile to relocate to other jobs in other cities by just jumping in the car. Free enterprise benefited by a larger pool of workers who could live more affordably.

Finally the Apollo program, which President Kennedy noted as "nothing more challenging, nothing will cost more, and nothing more impressive to man", focused an entire nation on a goal. The technology it created, we still use today. It's inspiration for students to become engineers was its most impressive achievement. Free enterprise, road the abundance of engineers, into making America the world's greatest inventor. One of the inventions was the ability of computers to talk over the internet.

And now, here we are in 2010, some 40 years from making big government investments, and we are stuck in the mud.

The next big thing is dramatically improving infrastructure and green jobs. In a flat world, where other nation's like China have the political will to win this battle, the U.S. is still looking at the world through 20'th century thinking.

The U.S. is my dad. Counting its spending and prioritizing around the status quo. While other American's like me, believe that government progressiveness will lead to economic expansion by building a solid foundation for free enterprise.

The national discourse should be focused on how to make more money in the long run. Not counting it's pennies as if we are only destined for the status quo. Continued status quo only leads to arguments on how to allocate a fixed national wealth. In 1975, seven percent of the national wealth was concentrated in one percent of Americans. Today, twenty four percent of the national wealth is concentrated in one percent of Americans.

We are not moving forward. We are moving backwards. Backwards to the so called "gilded ages" between the end of the civil war and 1913. If we continue to stay on this path we will just be arguing about how declining wealth should be allocated. When instead we should be talking about how to set a national goal that creates more wealth for everyone in the long run.