Debt (Not Capitalism) is the Problem

Our national financial crisis is not the inevitable failure of capitalism, but instead the inevitable failure of debt.   Debt is toxic at the personal, national, and global level. Like anabolic steroids, it promises to make people (and nations) more of what they want to be, faster than is naturally possible. At first, debt provides immediate positive results, giving citizens and government leaders the perception that borrowing money is wise. This is similar to the man who jumps off the roof of a fifteen story building and proclaims to a horrified crowd when he passes the fifth floor that everything is going great! Unfortunately, debt eventually takes more than it gives. Individuals, corporations, and nations only go bankrupt when they have borrowed money.  We all know people (with high and low incomes and extensive and limited educations) who were suckered into debt by their desire to grow rich faster than what is natural.  Like gambling, a sufficient number of borrowers succeed at creating quick wealth  to lure a significantly larger number of people into the poverty debt usually provides.

The Occupy Wall Street (OWS) movement is using the current financial crisis to vilify capitalism; however, debt, not capitalism is the evil that needs to be addressed. While debt is a component of modern capitalism, it is not a necessary one.  Throughout history, individuals and nations have achieved financial security with little or no debt. Traditional religions have admonished debt for centuries because of its enslaving qualities.  Unfortunately our current federal government encourages debt. It insures the loans (deposits) we make to banks, and it insures many of the loans the banks make back to us. From the government, we get tax incentives to borrow money and tax disincentives to make money. On Wall Street, the federal government partners with bankers to cook up exotic new forms of debt that will give citizens wealth and prosperity that naturally is not theirs to have without work, time, prudence, and thrift. When the government borrows money from our enemies to provide us bread and circuses, it is just a matter of time before our enemies become our masters.

     I believe capitalism, when personally practiced with prudence, brings more prosperity and freedom to more people and nations than any other system. I am concerned the OWS movement will end up throwing the baby out with the bath water. Instead of teaching the evils of capitalism, the OWS movement should be teaching citizens to avoid debt at both the personal and national level. Enron, MF Global, and college kids swimming in student loans are all tragic not because capitalism is a failed system, but because in every case the agents involved used debt to achieve riches faster and easier than is naturally possible.

Learning Logic after 40.

     I serve on the board of directors of a classical Christian school that uses the “Trivium” as the foundation for its academic program.  The Trivium, comprised of three distinct stages (grammar, logic, and rhetoric) was the system of education adopted during the Roman period to develop the "capable" Roman citizen. Refined in the medieval period, the Trivium is responsible for giving western civilization many of our greatest thinkers, doers, and leaders. Most of our founding fathers were taught under the Trivium system, as were most educated people in the western world until the middle of the nineteenth century. The beauty of the Trivium is that it plays to a child’s natural strengths. For example, elementary school children, whose minds are like sponges, are taught to memorize the grammar (or language) of their subjects. Junior high school-aged children, who are naturally disputatious, are taught how to think clearly and reason effectively during the logic stage, and older teenagers, with their natural desire to be accepted, are taught how to present themselves well during the rhetoric stage.

     Years ago when our school implemented the Trivium system we were short a logic teacher.  It quickly became obvious the number of people in Whitefish, Montana willing and/or capable of teaching logic to thirteen year olds was small to non-existent, so I volunteered. Having never taken any logic classes previously, I spent a year preparing in advance.  As I created my lesson plans, I realized how I had been cheated by my own public education because like most Americans, I was never taught how to reason effectively.  While students in ancient Rome learned the Three Laws of Thought, the Three Parts of Persuasion, and the Square of Opposition,  none of the 20^th century public schools I attended ever taught me to think critically or argue effectively. I am especially frustrated that the university I attended never required its graduates to demonstrate a firm grasp of critical thinking, but instead kept logic and argumentation well hidden in the obscure philosophy department.  

     Learning logic for the first time as an adult was like having my optometrist fit me with a correct set of eyeglasses. The whole world appeared clearer, and I wondered how much I had missed before I could see. Many subjects I previously found dull, such as political science, economics, and religion, were surprisingly more interesting once I had a basic understanding of logic. While it is certainly lamentable that I wasn’t taught logic as a youngster, I am excited that the internet has allowed me to pursue the education I never received.  While there are few things more obnoxious than a recent convert, I am looking forward to dedicating a number of  future blogs to logical principles.

Aristotle and the Friendship of Virtue

     One of my favorite books is Aristotle’s Nichomachean Ethics, and it is second only to the Holy Bible as my most often used reference for how to live an excellent life.  The weather outside today was pretty nasty, so I spent the afternoon thumbing through Book VIII, which is Aristotle’s treatise on friendship.  While the wind howled and the sleet fell, I came across some nuggets I thought were good enough to share.

     Aristotle believed that friendships could be broken into three different types:  (1) friendships of pleasure; (2) friendships of utility; and (3) friendships of virtue. While each type of friendship involves individuals displaying goodwill and decency towards each other, the reason why each type exists differs greatly.  Aristotle suggests that people who understand what a friendship of virtue is and how to experience one is an important element of a life well lived.   

        The first type of friendship is that of pleasure. The friendship of pleasure is based on the foundation that some individuals simply enjoy each other’s company. As children, it is much more fun to play in the sandbox with someone else that it is by yourself. Adolescents and young adults enjoy spending time with one another, and mutual interests are often the magnets that draw them into a relationship. Sometimes it is a sports activity, a school club, a particular genre of music, or simply two individuals who feel better in each other’s company that draws two people together. The single purpose of friendships of pleasure is the enjoyment each party takes from the relationship. Because this type of friendship requires both parties to experience satisfaction, friendships of pleasure usually end when the pleasure diminishes. Aristotle suggested that friendships of pleasure are often found in adolescents, but I believe many adult friendships are centered on pleasure alone. This is a major reason why so many American marriages end in divorce.

      Aristotle called the second type the friendship of utility, but I will call it the friendship of “usefulness.” The friendship of usefulness is based on the mutual profit both individuals gain from the relationship. This is the type of friendship we often experience in the marketplace, where we are gracious with the city clerk because we believe civility will encourage the clerk to help us, and the clerk is pleasant in return so we won’t complain to her superior. We also practice friendships of usefulness with our co-workers, believing it is better for all parties when we act decently towards one another. While we may actually enjoy each other’s company, friendships of usefulness only last as long as the need for mutual gain. If the city clerk retires and no longer provides us service, we don’t go out of our way to maintain the relationship. Likewise, while many of us like our co-workers, we don’t usually spend our leisure time with them in addition to our work hours. Aristotle believed friendships of usefulness were demonstrated most often by older adults such as, individuals entwined in a business deal, neighbors sharing a common property line, or the relationships between supervisors and employees. Like that of pleasure, friendships of usefulness are based on what individuals take from the relationship.

The last type of friendship Aristotle describes is the friendship of virtue. Friendships of virtue are experienced when two individuals enter into a relationship for the single purpose of bringing good to one another. Unlike friendships of pleasure, where the goal is to experience enjoyment, or friendships of usefulness, where the goal is to achieve mutual profit or peace, friendships of virtue focus on the well-being of the other person. Pleasure and usefulness are often experienced in friendships of virtue, but they are merely incidental. Friendships of virtue are focused on what the parties bring, rather than take, from the friendship.

  Aristotle explained that friendships of virtue can only be practiced by people of excellent character.  He believed that at least one person in the relationship had to be habitually virtuous and the other person must possess the potential and willingness to be virtuous.  Even in friendships where the virtue of the parties is unequal, the willingness of the more virtuous to teach and share with the less virtuous results in the increased happiness of both.  Like parents who love their children, or mentors who guide their protégés, the givers profit from the relationship as much as the receivers.       

Friendships of virtue are the highest form of friendship.   When two individuals covenant to help one another towards excellence, the benefits are extraordinary. While friendships of virtue are certainly magnificent, Aristotle laments that they are also extremely rare.  People are lucky in their lifetimes to experience even one friendship of virtue. This is due in part because most people regrettably are not virtuous.

Although rare, friendships of virtue are not nonexistent.  In my community I am surrounded by excellent people who are engaging in friendships of virtue.  There are husbands and wives striving to out-serve one another. I know mentors who selflessly teach their charges to be excellent, and I worship with people who give more than they take from their relationships.  While it appears at first glance that such relationships are drudgery, the result is the exact opposite.  Excellent people engaging in friendships of virtue are happier and more content.  I consider myself fortunate to have so many examples of friendships of virtue to observe and emulate.

In my church our pastor regularly teaches  us that:

     “Love is the demonstrated preference for the well- being of another, above ourselves, even at great personal expense, with the help of the Holy Spirit.”

     This defintion of love I believe is the quintessence of the friendship of virtue, and I believe Aristotle would approve.

How the Government Can Incent Americans to Maintain Healthy Body Weights

A couple of weeks ago I attended an excellent presentation given by a nutrition specialist from our local hospital. The presenter was speaking about the dangers of obesity in general and type 2 diabetes specifically.  I was shocked by the statistics she shared. She stated that 79 million Americans are at risk of developing type 2 diabetes, and that one in four young Americans are rejected for military service because they are overweight.  I thought the numbers were a little sensational until I surveyed the people in the room and realized our audience closely matched the figures (no pun intended) our presenter provided.

I don’t think there is any disagreement that America’s health care prices are rising at an alarming rate. Both freedom-loving tea partiers and progressive leaning socialists agree that the cost of health care for Joe Six-Pack can’t increase much more without a complete system breakdown. While I will save my own solutions for reducing healthcare costs for a later blog, I will state here that: (1) obese patients will always cost more than patients who are not obese; and (2) obesity rates will continue to climb as long as someone other than obese Americans picks up the bill for obesity related ailments.

How expensive is an obese American compared to a non-obese American? According to Eric Finkelstein, director of the RTI Public Health Economics Program in Research Triangle Park, N.C., prescription drugs for obese Medicare patients is 72% higher than for non-obese Medicare patients. For all Americans, both young and old, the annual cost of treating overweight patients is $2800 higher than for their healthy weight peers, according to a study by Chad Meyerhoefer of Lehigh University that was recently published as a working paper (No. 16467) by the National Bureau of Economic Research. In 2010, it was estimated by the Center for Disease Control (CDC) that the medical cost to treat obesity alone is $168 billion annually. (This is 16.5% of America’s total annual health care expenditures). If medical costs weren't enough,  obese employees cost American employers $73.1 billion annually in lost productivity due to missed work days as a result of illness. (Overweight employees are sick more often than their fit counterparts).

The frustration behind obesity is it is largely preventable. Unfortunately, federal regulations encourage obesity by forcing non-obese citizens and employers to pay for it.  We can argue whether or not America is a socialist nation, but most Americans are forced to pool their health care costs with other Americans not of their choosing. Whether it is federally regulated health insurance, Medicare, or Medicaid, Americans have little choice about who they can share their health risks with.  What this means is fit Americans, who pay the same taxes and health insurance premiums (but use less health care), are subsidizing overweight Americans who use more.  This kind of a system is unsustainable.

The best way to solve America’s obesity problem is not more government regulation. We don’t need food police or a fitness czar to solve or national weight problem. Instead, we need to remove current laws that incent people to grow fat. The fastest and most effective way to encourage people to pursue healthy body weights is to allow Americans to choose their health insurance based on lifestyle choices. This will result in one of two positive outcomes: (1) overweight Americans will self-regulate their own body weights to make themselves more marketable to less expensive insurance pools; or (2) overweight Americans will pay for the additional risk their lifestyles bring to the insurance pool.

In America, citizens should be free to maintain whatever body weight they can personally afford. Being overweight should not be a crime; however, forcing fit Americans to pay for their neighbor’s unhealthy choices is thievery. The universe has an order that naturally encourages humans to make good choices, but man’s misguided efforts to control society from a central authority usually ends up destroying the very citizens it purports to assist.  Freedom, not tyranny, will have the greatest positive impact on inspiring Americans to maintain healthy body weights. Any system that forces Americans against their will to pay for their neighbor’s poor choices will ultimately end in failure.

Am I A Communist?

    I love to debate. Recently in the heat of an ongoing Facebook argument, my opponent accused me of being a communist.  I believe the last time I was accused of being a communist was grade school. However, after much introspection, I had to admit that I am a communist.  In 1991, on the border between Saudi Arabia and Kuwait, I became a Christian communist, and I have been a passionate member of my commune ever since.

     In my Christian commune, we are taught to behave in ways that bring honor to our leader, and there is a rulebook that hasn’t changed for centuries. In my commune people are expected to follow the leader and the rulebook, but nobody is forced to remain in the commune against their will. In the commune we are guided by a worldview that inspires us to give more to the commune than we take, and what we take from the commune we believe are gifts, not entitlements. There are some in the commune who habitually give less than their ability and take more than they need, but the system seems to overcome its challenges when properly lubricated with grace and forgiveness.

Unlike the system that exists outside, my commune doesn’t force anyone, givers or takers, to belong to the commune against their will.  My experience in the commune has been a positive one. In my commune people often choose to deprive themselves of luxuries so they can afford to help the less fortunate in and outside our commune. Although my commune is often ridiculed, insulted, and despised by its beneficiaries, my commune gives more than it takes from the outside community. My commune feeds the poor and heals the sick outside my commune, even when those outside my commune curse our leader’s name.  

 There was a heavy price I had to pay to fully reap the promised benefits of my commune membership: I was required to voluntarily choose the leader’s ways over my own. While I wasn’t necessarily kicked out of the commune when I was selfish, it appeared the more I gave, the more I received.  Because this contract was built on a supernatural belief, it was difficult to accept until I experienced it.

When I used to live outside the commune, life was more cynical and unhappy. It was confusing and frustrating living outside the commune because the rules were always changing, and they were so complicated everyone was afraid.  Outside the commune, people didn’t talk to their neighbors, and they used lawyers to solve even small disagreements.  Outside the commune, I was taught that inside the  commune life was oppressive and boring, but I discovered the people inside the commune are every bit as fun loving as those living outside the commune. Once inside the commune, I observed that many of the behaviors the outside proclaimed to be liberating were actually enslaving. Until I actually joined the commune, I was a supporter of the anti-commune movement; however, now that I am a communist, I find great comfort in my membership. What I experienced outside the commune routinely failed me, but what I have experienced inside the commune has been consistently positive. For me, life outside the commune was scary and unreliable; however, inside the commune life has been secure and reliable.

Now that I am a communist, I am often insulted and ridiculed  by people outside the commune for being a communist. (I guess it is only fair because I used to attack Christian communists myself). My commune is often attacked for being selfish, even though it has proven to be less selfish than the society outside the commune. My commune is routinely called racist, even though my commune’s record on race is superior to that outside the commune. Finally, my commune is accused of propagating untruths, even though little I experienced outside the commune proved reliable. I guess what ultimately led me to exit the society outside and join my Christian commune was the continual disappointments I experienced out there.

  I am often encouraged by people living outside to leave my commune and re-join the society-at-large; however, I already know from experience how frightfully bad life is outside the commune.  I no longer desire to live outside my commune,  where people are tricked into creating governments strong enough to force their neighbors into behaving and thinking a certain way, only to have those same strong governments oppress the very people who created them, and in ways the creators never intended.

While I can’t speak for all communes, I am proud of my commune’s record on social issues.  I know throughout history there have been embarrassments identified by those living outside my commune, yet the historical transgressions of my commune weren’t a reflection of the teachings of our leader, nor were they worse than the transgressions of societies living outside my commune. Though far from the perfection required by those living outside of my commune, my commune’s history has been net positive. It is a shame when those outside my commune bring light to our shortcomings and ignore our successes.

 There are some in our commune who live their lives like they really believe our leader is the Truth. From the successes I have observed from these hard core communists, I want to be just like them. Others in our commune live like they believe some of what our leader says is true, and this group experiences varying levels of success. Many who join our commune live their lives exactly like they did when they lived outside the commune, and they are just as insecure and frustrated as they were before they joined.  The funny thing about our commune is it only works for the people who live their lives like they believe the leader’s teachings are true. Everyone is free to leave our commune anytime the outside looks like a better deal.

After living both outside and inside my commune, I prefer living inside. I often get frustrated when those outside my commune want the material benefits  my commune produces without the worldview that makes those material benefits possible. It is sad those who choose to live outside my commune don’t understand that it is our worldview, not its resulting benefits, that holds the real power.

Within my commune good and evil are easily discerned, and they are never changing; but outside my commune, good and evil change every election. In my commune I am free to be good; outside my commune I am forced to be whatever is contemporarily decided by the majority (or a panel of life-appointed judges) to be good.

It would be wrong for me to force anyone to join my commune; however, I will testify it has proven better for me than life outside the commune. While it appears life outside my commune is spiraling towards destruction, I know I am secure within my commune. If my choice to voluntarily join my commune and follow the teachings of my leader makes me a communist, I plead I am guilty as charged.

The S.P.R.I.F. Model

 In 1999, my friend Kurt asked me to be part of a “coming of age” ceremony for his soon-to-be thirteen year old son Daniel. Based on his intention to formally introduce his boys to the responsibilities and characteristics of manhood, Kurt determined to have his sons mentored by men who were successful in the areas of spirituality, physical fitness and health, relationships, intellectual achievement, and finances (SPRIF). I was so impressed by SPRIF that I chose the model for my own son’s thirteenth birthday manhood ceremony.

Serving as scoutmaster of Whitefish, Montana’s Troop 17, I later used Kurt’s SPRIF model as the foundation for developing boy scouts into “mighty men of character and service, who give more than they take wherever they go.” Because of the success we achieved in helping young men live exemplary lives, I adopted SPRIF as the guideposts for my own life. Over time, I noticed many of my clients were not flourishing, even when they were financial secure. I started to incorporate spiritual, physical, relational, and intellectual goals into a few, select financial plans. When I did, I observed these clients were more content with their lives. Upon establishing my own firm, I made a business decision to build my financial planning practice on the SPRIF model where I guide my clients towards achieving balance in the areas of their lives that they value.  

Now that I am an empty nester, I am ready to start my next adventure: public speaking. While I am not quitting my day job, I am going to structure my schedule so I can devote more time towards teaching and public speaking. I will focus my efforts on skills that lead others towards lives well lived. The purpose of this blog will be to post my thoughts and deeds towards this endeavor. I am also hoping readers will send their own ideas about how to be excellent so I can share them with others.

Blogging is new territory for me, but I am anxious to get started. Please feel free to comment on how I can do a better job.

Semper fi,

Joe Coco