The current state of the U.S. Economy has a great many folks looking for some form of government action; some form of strategic plan for arresting the seemingly unstoppable trend toward certain collapse. The subject of Economics is puzzling for many particularly on the macro or national level and there is an expectation that lingers in the public sentiment that the President and Congress should be doing something about it however it is doubtful that either possess the political will to do what must be done to correct decades of flawed economic and monetary policy.
The truth of the matter is that Presidents and the Congress have long focused on domestic economic-health issue favoring instead to assign this critical component to global administrative bodies; moreover, the labyrinth of government has been far more intent upon infusing social-management routines and the legislative agendas have been shaped and prioritized accordingly; point of fact, save for defense spending, the greatest component of the U.S. Budget is specifically dedicated to the funding of socialized-management programs (a.k.a., “entitlements”). The result of all of this bureaucratization has brought with it the need to develop a means to pay for it and in doing so government began, more and more, to draw from the native economic function and what it was unable to extract from your pockets, it simply borrowed. Meanwhile, as the process of institutionalizing entitlement-governance became the dominant national agenda, the national economic model morphed into a De-Generative process that I refer to as The PSE (Physio/Socio-Economics) Factor and the context of this term is as follows:
“The practices and tendencies of how economic processes are altered or enterprises conform or orientate themselves in response to political interferences or inducements. The motive force is typically advantage-driven by nature and trend toward defeating the beneficial effects of Torsional Economic Tensions which would otherwise serve as a perfecting and refining cause. In practice the PSE factor defeats all native, organic and normal economic cycles.”
This concept simply codifies the effects of central-planning and the various inefficiencies intimate with this totalitarian regime of thought and what follows are a few of its more conspicuous exhibitions:
- Corporate Governance: Enterprise seeks to take a greater role in the legislative process in order to protect, enhance and expand its profits.
- Barriers: Through the legislative process “protective measures”, under the guise of equality, deregulation or regulation, are promulgated and enforced however they are merely protective of Selective-Enterprise interests.
- Predation: As more and more economic influences are codified enterprises are no longer subject to the command of economic efficiencies and as government has no mandate for economic efficiency a perverse form of predation evolves. Enterprise discovers it can charge what it pleases without regard to normal market metrics and government has no obligation to object to their do so. Example: U.S. Defense Industry, G.E. and G.M.
- De-Generation: The interaction of these events draws greater participation (and thus greater reliance) of the private sector into the government centralized-planning sector. The result of which is the national economic cycle becomes more and more stagnant and degenerative as the entire system becomes co-dependent unable to persist on its own. This single word describes the present state of the U.S. Economy. Examples: U.S. Agriculture Industry, U.S. Energy System and Infrastructure as well the examples previously provided.
“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been 200 years.”
– Alexis de Tocqueville –
De-Generative Economies fail for the simple reason that, as it has in the U.S., devolved into a centralized-state of micro-management and have lost the most valuable (and organic) components of a functional economic system: Modular, Intuitive and Adaptable.
- Modular: A structural reference to an economy’s diversity; the manner and extent of/by which a system disperses its productive capacity across the national economic spectrum versus the degree to which it concentrates the process. The greater the degree of dispersal the more durable the economy. Despite what some may believe, “Box Stores” are not a sign of economic durability; they are quite the opposite.
- Intuitive: The manner in which an economic process anticipates changes in demand; its ability to alter its process toward greater efficiencies; its ability to address and eliminate defects and its ability to pro-generate; the most important attribute of the Intuitive component.
- Adaptable: The degree to which an economic process can apply its resources to multiple products, services and/or applications.
These three components are interdependent and each absent in the former Soviet Union economic model and presently in every one of the E.U. member nations. Where China is concerned, Adaptable is the only component active in its economic system.
Pro-Generative Economics (PGE):
An economic process best characterized by the term: intuitive-adaptability. PGE is the complete antithesis of conventional (or theoretical) business cycles: incubation-expansion-exhaustion. This model postulates that the economic cycle can be extended perpetually by overturning the exhaustion phase through maintaining a perpetual incubation cycle. The theory intimates that economic de-generation occurs due to any of the following interferences: (1.) Economic Degeneration. (2.) Convenient-fatigue. (3.) Predatory Acquisition. (4.) Coercive Action (Government).
Pro-Generative economics is, as you would expect, the complete opposite of De-Generative economic and from its genesis, in early U.S. economic history, the process was maturing into an extraordinarily functional system; its processes at work creating a diverse economy with incalculable economic wealth-generating capacity. At work, using a few basic examples, it moved a nation from the horse and buggy era to the automobile, isolated agricultural capacity to a national food distribution system; coast to coast by train in 7-days to four hours by jet aircraft. I would offer that an indication of the De-Generative economic affect is illustrated by the following examples:
- 100 years later we still rely on the internal combustion engine.
- The U.S., once the breadbasket of the world, is now a net-importer of ag-products.
- The national transportation system is in a state of disrepair.
- Our energy productive capacity is its own form of obscenity and our infrastructure is a patchwork of late-19th Century technology.
Yes there have been technological advancements and innovations however their yield has been diluted primarily as the economic value creates little if any domestic benefit and this too is its own form of de-generation: The ascendance of the multi-national corporate structure and the adverse effects of globalism. The pro-generative economic model does cannot function in the global model of predatory economics; it functions on the ideal of perpetual economic refinement through continuous re-generation of a domestic process; all functional economies only ever function at the local level and expand from there.
Unfortunately, what has happened here in the U.S. is that government has been used as a mechanism for defeating the economic process and then attempts to replace the loss of one’s individual economic capacity, which would otherwise assure self-reliance and economic fitness, with government handouts it pays for in the most inefficient manner possible; taxation and debt-acquisition.
Unless and until the politically-induced narrative is removed the process of restoring a Pro-Generative Economic philosophy is structurally impossible however this is only the first way-point along the road toward emerging from our present fiscal and economic wasteland. The most effective way to approach the issue is to address the process outside of government and its wicked processes; a strategic goal specific as to outcome with deliberate mechanisms for arresting the defects out of the current system and then simply presenting it to Congress with a demand for enacting the legislative components.
We have written a series of books with this issue in mind and they are available through all the most conventional means. We’ve also initiated a bi-weekly series title “TIMF E-ops” which discusses this very issue; I trust you will follow the Series which appears on the TIMF Website and post to our Facebook page. However, so as to not appear as if I am baiting the subject, here are a few of the hi-lights of a deliberate and specific plan of attach:
1. Affect a Constitutional Amendment banning money and lobbyists from the legislative and election process.
2. Replace the current U.S. Tax Code (there are several articles on the TIMF Website that discuss this issue in great detail).
3. Overhaul the U.S. Banking System. First action, restore the Glass-Steagall Act.
4. Replace all Government-Sponsored retirement and benefit plans merging them instead into a national system of privately managed options.
5. As part of item #4 herein, establish an investment option that would consist of “Development Bonds” the funds from which to be applied in the following item.
6. Fast-Track technological innovation for energy generation and infrastructure reconstruction which would include integrating existing rail right-of-ways into a functional hi-speed passenger rail system domestically designed and produced.
7. Rescind any/all WTO/GATT and related Trade Agreements.
You see, form a statement made above;
“…it functions on the ideal of perpetual economic refinement through continuous re-generation of a domestic process.”
Let’s be clear on this last point; the economic process is a perpetual process and the thought that continuous economic processes exhaust resources is an illusion promulgated either by shear ignorance or by those who simply prefer the ease of picking low hanging fruit in the dark from an orchard owned by someone else. Or, of course, they may simply be a flock or gaggle of vultures!
So you see it isn’t a lack of vision or resources that restricts our future; it’s simply a matter of will.
Curtis C. Greco, Founder