Sound economic talk in hot political seasons

By Kevin J. Price

We are in one of the most hotly contested political environments in decades. People of all sides -- Republicans, Democrats, independents, and large number of third parties are all suspect of political labels. They don't want to know about the "Republican" way or "Democrats" approach, but simply the way that makes the most sense in working towards a sound economy.

No longer are the economists comparing our economic situation with the Carter years. Instead we are hearing about parallels with the Great Depression. During those dark years a series of economic tools were developed to talk about the economy, while dropping the political rhetoric. The group that developed them was called the American Economic Foundation and the principles they promoted were called the "Ten Pillars of Economic Wisdom." We need those type of simple principles in this hostile political environment today. People simply want truths and the Ten Pillars are filled with such.

1. "Nothing in our material world can come from nowhere or go nowhere, nor can it be free: everything in our economic life has a source, a destination, and a cost that must be paid."

2. "Government is never a source of goods. Everything produced is produced by the people, and everything that government gives to the people, it must first take from the people."

3. "The only valuable money that government has to spend is that money taxed or borrowed out of the people's earnings. When government decides to spend more than it has thus received, that extra unearned money is created out of thin air, through the banks, and, when spent, takes on value only by reducing the value of all money, savings, and insurance."

4. "In our modern exchange economy, all payroll and employment come from customers, and the only worthwhile job security is customer security; if there are no customers, there can be no payroll and no jobs."

5. "Customer security can be achieved by the worker only when he cooperates with management in doing the things that win and hold customers. Job security, therefore, is a partnership problem that can be solved only in a spirit of understanding and cooperation."

6. "Because wages are the principal cost of everything, widespread wage increases, without corresponding increase in production, simply increase the cost of everybody's living."

7. "The greatest good for the greatest number means, in its material sense, the greatest goods for the greatest number which, in turn, means the greatest productivity per worker."

8. "All productivity is based on three factors: 1) natural resources (NR), whose form, place and condition are changed by the expenditure of 2) human energy (HE) (both muscular and mental), with the aid of 3) tools (T)."This is straight forward enough. These three factors make up the totality of the economy. As a formula, this is seen as NR + HE x T = Man's Material Welfare."

9. "Tools are the only one of these three factors that man can increase without limit, and tools come into being in a free society only when there is a reward for the temporary self-denial that people must practice in order to channel part of their earnings away from purchases that produce immediate comfort and pleasure, and into new tools of production. Proper payment for the use of tools is essential to their creation."

10. "The productivity of the tools - that is, the efficiency of the human energy applied in connection with their use - has always been highest in a competitive society in which the economic decisions are made by millions of progress-seeking individuals, rather than in a state-planned society in which those decisions are made by a handful of all-powerful people, regardless of how well-meaning, unselfish, sincere and intelligent those people may be."

If you are on Facebook or other social networking sites, put these principles (or summaries of them) in your status with links to this article. These principles are purely consequential in their approach. If such happens, this will be the results. Those who oppose them do so on political grounds, but not reality. Tools such as this can restore sanity in an area that is begging for such today.

--
Kevin Price
Host, Price of Business, M-F at 11 am on CBS Radio News
Frequently found on Strategy Room at FoxNews.com
Syndicated columnist whose articles appear on a variety of media outlets.
His http://BizPlusBlog.com/ is ranked in the top 1 percent of all blogs by Technorati.
Kevin Price's Profile: http://www.google.com/profiles/PriceofBusiness