Market Talk

Joshua Brown over at The Reformed Broker issues the call to arms:

There is absolutely no reason to believe that the government can lead us out of our current fiscal and monetary predicament, let alone restore the depth and diversity of the labor markets.  The only hope we truly have is that the innovation and determination Americans are famous for begins to emerge from the abandoned entrepreneurial class.

The men and women who, against all odds, start businesses and pursue new enterprises in this environment are the people who will be hiring and spending to take us out of it.  Finding solutions to problems in a profitable manner is how American entrepreneurs will win again.

This is what I was getting at when I said the only solutions were time and open markets, although I clumsily left out the most important ingredient: a spirited American citizenry. Brown does a much better job of getting at the heart of it:

The solutions to health care, disease prevention and control, pollution, border and port security and energy austerity will never originate in the bowels of the Capitol Hill bureaucracy.  Rather, they will come from visionary and nimble businesspeople who are given the space and capital to solve them.

There is a great deal of work to be done for the world to truly grow into the young new century, and there is no population I’d rather bet on to accomplish this work than the Americans.

That entrepreneurial spirit is desperately needed today. While our representatives in Washington and state houses across the nation dither, the nation falls deeper into disrepair and dysfunction. The NY Times’ Bob Herbert wrote from a conference in California that was focused on the state of the nation’s physical plant. If you’ve ever rode, for example, the Cross Bronx Expressway, you’ve got an idea where this one’s going.

We don’t hear a lot that is serious about the sorry state of the nation’s infrastructure or the trade policies that crippled so many American industries or our inability (or unwillingness) to compete effectively with China when it comes to the new world of energy for the 21st century or our abject failure to provide a quality public education for the next generation of American workers, scientists, artists and entrepreneurs.

Speaking at a conference here on Wednesday, Gov. Ed Rendell of Pennsylvania said that if we don’t act quickly in developing long-term solutions to these and other problems, the United States will be a second-rate economic power by the end of this decade. A failure to act boldly, he said, will result in the U.S. becoming “a cooked goose.”

Brown’s comments got to me thinking about something Robert Pirsig wrote in “Zen and The Art of Motorcycle Maintenance,” published back in 1974 (and he probably first wrote the words years before that) at a time when America was also in a tight spot. The book was subtitled “An Inquiry into Values,” and Pirsig does this all-encompassing search back through the history of philosophy to discover the meaning behind the word “quality,” what preconceptions and misconceptions were baked into rational thought at its birth, and how it affects our thoughts to this day. It sounds stuffy but it’s not at all. I highly recommend it.

Pirsig talks about how somebody who cares about their job, like, say, fixing a motorcycle, can’t help but do a quality job, and in doing so, have that good job noticed, and have that quality spread out like a wave. That’s how big things get done.

We’ve had that individual Quality in the past, exploited it as a natural resource without knowing it, and now it’s just about depleted. Everyone’s just about out of gumption. And I think it’s about time to return to the rebuilding of this American resource, individual worth. There are political reactionaries who’ve been saying something close to this for years. I’m not one of them, but to the extent they’re talking about real individual worth and not just an excuse for giving more money to the rich, they’re right. We do need a return to individual integrity, self-reliance and old-fashioned gumption. We really do.

The government doesn’t need to waste time with $700 billion stimulus plans, trillion-dollar bond buying schemes, bailouts, mortgage modifications, suspended accounting standards, suppressed interest rates, Fannie, Freddie or a banking lobby that can scuttle even the most obviously needed financial reforms.

It just needs to straighten out its own fiscal policy, set up a fairly regulated open market, and let the American people get back to what they do best, which is picking themselves up by their own bootstraps, summoning up some gumption, and going out there and doing a quality job.

Time and open markets. And some spirited Americans. That’s all we need.