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Strictly Business
| June 2, 2009
Entitlement in America:
Past, Present and Future
This week's Strictly Business is written by
Blake Christian, CPA,
MBT who is a
Partner in the firm Holthouse Carlin & Van Trigt LLP and he is
also Chairman of the Board of the Long Beach Area Chamber of
Commerce.
 Arguably
one the most famous political quotes in United States history is
John F. Kennedy’s 1961 inaugural speech, which included the
timeless: “Ask not what your country can do for you, but what
you can do for your country”. Today, this brilliant quote may be
even more appropriate, based on the worldwide political,
economic and social environment.
The timelessness of this memorable quote is highlighted by the
surprising fact that these words were penned approximately 36
years before the words were spoken by JFK (without proper
attribution to the author). The real source of these words comes
from the famous Lebanese philosopher and poet, Kahlil Gibran
(1883 - 1931). This timeless question was appropriately directed
to the politicians of Gibran’s era. Virtually the exact words
were first used in Gibran’s 1925 Arabic-language article which
translates into either: “The New Deal” or “The New Frontier”. A
quick read of Gibran’s article should assure anyone that FDR did
not use Gibran’s article as his “New Deal” blueprint.
Gibran’s article was directed at his Middle East contemporaries
and challenged them to do away with their old selfish and
corrupt ways and improve the lives of the masses. However,
Gibran’s article and solutions were far from recommending
socializing government. In fact he rhetorically asks: “Are you a
governor who denigrates himself before those who appoint him and
denigrates those whom he is to govern, who never raises a hand
unless it is to reach into pockets and who does not take a step
unless it is for greed? Or are you the faithful servant who
serves only the welfare of the people?”
I suspect both Gibran and JFK would be terribly disappointed to
see the level of entitlement of the masses and government
intervention in the United States and many other countries
today.
The irony here is that during last year’s Presidential campaign
many parallels were drawn between JFK and President Obama, and
the “Ask not…” question was quoted extensively, yet
post-election, the vast majority of Americans have suddenly
become very comfortable with the concept of the federal
government bailing out their businesses, their homes, their
student loans, their credit card balances and their cities and
states.
Sadly, this quickly evolving “Entitlement Mentality” whereby the
Gibran/JFK mantra has degenerated into: “Ask not what you can do
for your country, but what your country can do for you”
(regardless of the short-term and long-term costs).
President Lincoln, possibly the most highly regarded U.S.
president in history, would clearly be disappointed with recent
developments. To his credit, President Lincoln summed up his
expectations of citizens with: “Let not him who is houseless
pull down the house of another , but let him labor diligently
and build one for himself, thus by example assuring that his own
shall be safe from violence when built.” It is difficult to
speculate how Lincoln might view housing subsidies, mortgage
bailouts and ACORN’s business plan.
The shift to increased reliance on government programs, and
increasing government intervention, seems to strongly resonate
with today’s Millennials and Gen Y voters. And why shouldn’t it?
If you can access a disproportionate amount of money and
services while paying less than full price via your personal tax
burden or fees, it sounds like a pretty good deal. But as
Margaret Thatcher is attributed to saying: "The problem with
socialism is that eventually you run out of other people's money
[to spend]."
Until people figure out that there are massive hidden and
deferred costs with these recent federal, state and local
government trends, we will very likely see increased levels of
government intervention for the foreseeable future.
The increasing entitlement mentality and government intervention
is effectively eroding the entrepreneurial foundation which has
made the United States the true land of opportunity for over two
centuries. With technologies allowing virtually any business to
operate internationally and a worldwide banking and economic
network, business owners have the option to operate their
businesses from any location. We are already seeing large
numbers of companies moving from highly taxed and highly
regulated cities, states and countries to lower-taxed and lower
regulated jurisdictions.
Rest assured that the current worldwide recession will see
certain countries evolve into “business centers of choice” based
on their competitive tax rates and free-market regulatory
approach – leaving highly taxed and highly regulated countries
such as the U.S. with shrinking economic and tax bases.
More mature businesses and their owners may have more difficulty
moving their businesses offshore to escape the grasp of U.S.
taxes and regulations due to complexities in tax laws and
general mobility issues. However, the same Gen Y and Millennials
who are embracing government hand outs will more easily be drawn
to other more flexible countries to establish their businesses
and residences.
With the daunting economic challenges at the federal, state and
local level, this is not the time to sit on the sidelines and
complain. Every citizen should be asking: “What can I do to
improve my city, state or federal government?” By volunteering
at your local school, church, homeless shelter or city
commission, you can take an active role in your community and
begin making positive changes. You should also reach out to your
local, state and federal legislators via letters and phone to
make sure they fully understand your position on various issues,
including, deficit spending, tax rates, and social programs.
Don’t assume that they “get it”. They do need and value your
input, including suggested solutions. Today, the squeaky wheel
truly does get the grease.
So the next time you hear or see the famous quote attributed to
JFK, please remember that those insightful words have their
roots in a Middle East philosopher. And take a hard look at the
federal and your state and local political landscape and
evaluate your personal contributions and how your legislators
are facilitating with citizens being either net contributors or
net beneficiaries of government programs. You can make a
positive difference by getting involved...
...and that’s Strictly Business.
Blake
Christian, CPA, MBT
Partner, Holthouse Carlin & Van
Trigt LLP
Chairman of the Board, Long Beach
Area Chamber of Commerce |
