The Age of Government is Past…

Goverment has been out paced by business.

Up until a decade ago the power of the federal state was the ultimate power of recogning as they controlled the strings, therefore all including business had to follow along like it or not.  Yet the world has changed and government hasn’t here is why we have many of the social problems of the day.  As think about it this way, back in the say the 70’s and even to the 80’s if a company did business globally it was a minority share and typically conducted only as a franchise of the parent.  Meaning it had to bend to local (country) laws and implied social norms.

However fast forward throughout the 90’s and past the turn of the millennium where we find a different world and while buck Rogers is missing the fact companies have out paced government isn’t.  What you say, commercialization has won out over taxation you say?  Well, yes as look at it this way, Apple Computer now has more cash and reach than the US government!  So who needs nukes when you have these things as this is about the only thing which (let’s hope) they don’t have.

Ok, did what I just write sink in?  Yes the multinational companies of today have more reach and money then the Governments they once operated under do as for obvious reasons Governments have remained “regional“, yet multinational companies have out paced (grown) them by going global.  So if a Government does something which one of these behemoths don’t like, they are no longer landlocked subject to the domain of that authority. (note to governments: put away the stick and get the carrots out as you need business more than business needs you)

Need a case in point, SOXs, yes the Sarbanes Oxley Act, one of the worse pieces of legislation to pass through congress and the killer of the US economy as did it have good intentions?  Of course, yet when business saw the negative effect it was going to bring, they packed up and left American shores.  Note, they didn’t go out of business and they still sell their products and services here.  It’s just they have moved their crown jewels to what they believe are friendlier shores.

So who loses out on the this, yes the societies which are left behind, people in the for the first time in the history of the country [America] are seeing a jobless recovery, as how could that be as if people are not working, then where is the money coming from?  Yes Virginia, while Santa Clause maybe imaginary so it seems is our current system(s) of Government is to as there is no longer that a hard link remaining between commercialization and taxation to fund all those soft social programs of the bygone years…

The Fantasy of an Ownership Society…

Foreclosed

Foreclosed

Back in the day it was 20 percent down to buy a house, and everyone (even yours truly) had to work for years to save this money however that all changed when we entered a new era and sorry to say it wasn’t the Age of Aquarius.  It was the age of the “Ownership Society” where every family like it or not was going to own a piece of the American Dream.  Yes, you read that correctly like it or not they were headed to home-ownership or should I say home-hardship.

First what got me thinking of this was a story in the USA Today titled Empty Houses: The Ownership Society is Over, it also struck me how much this is like the current healthcare debacle (material for yet another post).  As the common denominator here is someone else tried to imply their opinions of “right” on the populous as a whole. Here it started with the Clinton’s that everyone should be a homeowner and that would make for a better world or at least country.

However first off, home ownership is not for everyone, in my mind it is only second to rearing a child as there is a large amount of responsibility one takes on.  As there is constant up keep of the property, continued investments, extended financial commitments for things like property taxes as well as community obligations.  In short it is a lot of work and in the American model we also built it (wrongly) as a means to retirement where a couple would sell the family home and use the profits to retire and the government even supported  this with tax breaks at age 55!  However in the end it assumed a false economy in the ever rising home value would always rise.  This in turn led to the false belief a couple didn’t have to save as much cash as the difference could come from their home, so spend instead!  Bad move as if everyone thinks this way it doesn’t work and the American people found out the hard way.

However back to the socialization of ownership, as during the Clinton Administration one could say the program of “no home left behind” was kicked off and whether you wanted one or not you where getting one.  As policy (yes governmental) was going to get us there making it so much easier to own then rent (ever hear something called sub-prime), however forget all the responsibility hiding behind the curtain.  So we fed the funnel with a bunch of undesirable houses in questionable locations to people without the means to manage the situation they were going to be tossed into and we wonder why there was a problem?  Also in fairness the Bush administration did nothing to slow this train wreak either (by the way, where were all the SOX rules protecting us from this?).

One of the modern political misconceptions is we the people need to be told what is best as this is a perfect example of Dudley Do Right done wrong.   Today as shared in the USA Today story, these misfit homes are now once again sitting vacant and lonely much like some Hollywood C-List horror movie waiting to be made while the world moves on to build more rental units.

Yet we still have an administration and general governmental belief system that they are superior to Adam Smith’s Invisible Hand