January 28, 2011

Quote of the Day

"However that may be, since we must turn to what the socialists call a parasite, which of the two—the merchant or the public official—is the less demanding parasite?" - Frédéric Bastiat, French economist, 1848.

January 26, 2011

Not a Good Sign

Not a Good Sign

Airline pilot, copilot, flight engineer$93,690$120,012-$26,322
Broadcast technician$90,310$49,265$41,045
Budget analyst$73,140$65,532$7,608
Civil engineer$85,970$76,184$9,786
Computer, information systems manager$122,020$115,705$6,315
Computer support specialist$45,830$54,875-$9,045
Crane, tower operator$54,900$44,044$10,856
Dental assistant$36,170$32,069$4,101
Electrical engineer$86,400$84,653$1,747
Financial analysts$87,400$81,232$6,168
Graphic designer$70,820$46,565$24,255
Highway maintenance worker$42,720$31,376$11,344
Landscape architects$80,830$58,380$22,450
Laundry, dry-cleaning worker$33,100$19,945$13,155
Locomotive engineer$48,440$63,125-$14,685
Mechanical engineer$88,690$77,554$11,136
Office clerk$34,260$29,863$4,397
Pest control worker$48,670$33,675$14,995
Physicians, surgeons$176,050$177,102-$1,052
Physician assistant$77,770$87,783-$10,013
Procurement clerk$40,640$34,082$6,558
Public relations manager$132,410$88,241$44,169
Recreation worker$43,630$21,671$21,959
Registered nurse$74,460$63,780$10,680
Respiratory therapist$46,740$50,443-$3,703
Sheet metal worker$49,700$43,725$5,975

Not a Good Sign

January 20, 2011

Death to the BCS

As you can see below, 27 of the 35 bowl games (77%) had TV ratings of 5 or below.

Three of the five BCS games had TV ratings at 8 or below.

For some perspective, the NFL playoff games have averaged around 17.

For some more perspective, the show Mike & Molly consistently scores around an 8.

Why the Government Should Stay Out of the Way

The article below from the Atlantic is a great reminder to why the federal government should stay the heck out of the way.
How the Government Caused Overinvestment in Housing
By Daniel Indiviglio
Conservatives blame poor government policy for causing the housing bubble, while progressives blame the financial industry. While most arguments on the right focus on the government-sponsored enterprises Fannie Mae and Freddie Mac, its stance actually might not need to rely on them. Data indicates that the government's broader efforts to make housing an attractive investment has funneled money away from business and into the housing sector.
This analysis comes from University of Chicago economist Casey Mulligan, via the New York Times Economix blog. He analyzed the value of housing capital, as a measure of profitability, in the U.S. from 1950 to 2000. He calculates it to be average out to 5.7% over the period. Here's his chart:
housing capital mulligan.jpg
It was 6.4% in 2000.
He then did a separate calculation to determine the value of business capital. At 15.3% over the 50-year period, excluding taxes, it was much higher. This implies overinvestment in housing. Mulligan explains:
Business capital has been so profitable to the economy because it is more scarce. It's the law of demand: the less business capital there is, the higher the rate of return that remaining business capital earns because each unit of capital serves more customers. A low profit rate for housing is a symptom of its abundance.
This would seem to imply that prudent investors would be better off investing in business than housing, since business capital is more productive than housing capital. So what happened? The government made housing look like a more attractive investment. Mulligan also calculated profitability with taxes taken into account:
The business-residential profitability gap is almost 10 percent, but our attempts to adjust both profit rates for applicable taxes show that the after-tax profitability gap is zero to five percentage points.
In other words, tax differences sweeten residential real estate investment. They result in it looking nearly as profitable as business investment.
There are a few things to note about this finding. First, it's important to bear in mind that this was all before the housing bubble; Mulligan's analysis ends in the year 2000. In other words, the overinvestment in housing obviously got much, much, worse in the seven years that followed. This begins to show one reason why so much money flowed to real estate instead of to other investment options.
The second implication is arguably even more important. Business growth in the U.S. during that decade was weaker than it could have been because so much investment was coaxed towards real estate by the government instead of towards other more technology-driven industries. If the U.S. wonders why it's having so much trouble with economic growth now, it can look to the overinvestment in real estate over the past decade, which ultimately resulted in a tragic amount of capital destruction.
Third, this analysis shows the extent to which residential real estate benefits from favorable tax treatment and business suffers from relatively unfavorable tax treatment. If the government wants to figure out how to create jobs, there's its answer. It should reduce the tax benefits provided to real estate and provide them to businesses instead.
Up to now the government has had a dual-rationale for its preference for housing investment. One end it appreciates is promoting homeownership, because it has long (wrongly) viewed owning a home as a part of the American Dream. Second, the housing industry lobby is very powerful, as is evidenced by the ridiculously expensive but politically untouchable mortgage interest deduction. It's time for Washington to challenge this status quo and begin to encourage Americans to put their money in more productive investments that will facilitate stronger long-term economic growth.

January 18, 2011

The Contributor

This entire blog post from author Stephen Mansfield is worth your time in reading.
I experienced one of the most fascinating meetings of my life this past week. It took place at Nashville’s downtown Presbyterian Church on a rainy afternoon a few days after Christmas. It was attended primarily by some 400 homeless men and women and I know what you might expect but give me a minute before you close your mind.

I should start by telling you that I have long been part of two movements that unfortunately have two distinct approaches to the homeless in our land. First, I am a political conservative who believes in limited government, the rule of law, private property, low taxes, strong defense and freedom for each man to rise to whatever heights his gifts allow. This places me among a tribe who tend to view homelessness as a liberal invention designed to squeeze funding from government budgets. The frequent response of my fellow conservatives to a homeless man on the street is to growl, “Get a job!”

I am also a Christian, though, and I have been privileged to lead activist churches that have engaged the homeless with compassion and generosity. We understand that our Christ so identifies with the homeless that to serve them is to worship him. So we have started halfway houses. We have driven buses into impoverished neighborhoods to offer food, clothing and medical care. We have taken the homeless into our own homes. More important, perhaps, we have embraced the biblical understanding that not all poverty and dysfunction is the fruit of sin and irresponsibility.

Obviously, my politically conservative and compassionately Christian worlds frequently collide.

So back to that meeting on that rainy afternoon in Nashville. The reason so many homeless had gathered that day was a publication called The Contributor, the “homeless newspaper” of Nashville. I had seen people selling the paper on the streets and I had even bought one or two, but I had no idea of the impact it was having on homelessness in Nashville. I also had no idea of how The Contributor was bridging my two worlds.

It turns out that The Contributor was begun a few years ago to serve the cause of the homeless. When I first heard this, I assumed the paper would be filled with articles advocating for the homeless. You know the stuff: complaints about the police, gripes about angry storeowners, tirades about the heartlessness of people today. I was pleasantly surprised. There were marvelous articles and many by people described as “formerly homeless.” There was poetry. There were funny essays. There were tender testimonials and even movie reviews. I was touched.

Then I learned about the economic impact of the paper. You see, the homeless can buy The Contributor from the publisher for twenty-five cents. They have to attend training sessions, observe certain standards and participate in follow-up meetings, but once they qualify they can sell The Contributor for a dollar. Many receive tips as well. The meeting I attended on that afternoon after Christmas was a training session before new editions of the paper were sold to “vendors,” the people we call homeless. But they aren’t just homeless anymore when they have The Contributor in their hands. They are vendors, entrepreneurs—yes, contributors.

Let me tell you what this means. A year ago, ten thousand copies of TheContributor were sold in Nashville. This last month, 120,000 copies were sold. This means that through sales and tips, over a million dollars have been put into the hands of the homeless in the last year. And it is changing lives. One of the most moving moments I’ve had is when the executive director of The Contributor, Tasha French, showed me photos that one formerly homeless man had sent her. You see, he had begun selling The Contributor and had made enough money to live. Then he got a home. Then he got a wife. The photos he sent Tasha were of his dinner table on Thanksgiving Day. It was lovely and filled with food and he was planning to invite some of his homeless friends in for a feast.

Conservatives want the homeless to get a job. In Nashville, they have. Christians want to help the homeless out of poverty and into lives of character and prosperity. In Nashville, The Contributor is making this possible. It is what we have hoped for. Something that works. Something that involves free market principles. Something that demands character. Something that is changing lives.

I want you to help. I plan to write for this paper if they’ll have me and my firms are going to purchase advertising and provide literary services, which is part of what we do. I want you to first log onto www.thecontributor.org and read up. Then, I want you do to what you do best. For some, this means giving money. You’ll see how on the site. If you run into problems, contact me through this site and we’ll help. For you business owners, I want you to purchase advertising. Surely you can benefit from 120,000 Nashvillians seeing your ad. Some of you will want to volunteer. Some of you more famous folks might want to agree to interviews that will appear in the paper or perhaps even offer articles of your own that will raise The Contributor’s profile. Feel free to contact me about this. By the way, The Contributor is already the most successful homeless paper in America. What would happen if we helped it become a model for thousands like it around the country?

Learning From T.R.

Author and Pastor George Grant shares some lessons learned from the great Theodore Roosevelt:

1. The first prerequisite of true leadership is a happy home. The private life is the proving ground for the public life.

2. Leadership is the art of pursuing the ideal in the midst of a world that is something less than ideal—and never losing sight of either notion.

3. A leader is an idealist who is simultaneously blessed with a strong dose of reality.

4. A leader knows that what is really important in life rarely puts on airs of importance.

5. There is little extraordinary about the achievements of a genius, a prodigy, or a savant. Inevitably, a great leader is someone who overcomes tremendous obstacles and still succeeds.

6. A leader has the ability to take any circumstance and see it through the lens of happy providence. He is living proof the fact that laughter is indeed, the best medicine.

7. The efficacy of leadership depends, to a large degree, on the leader’s incognizance of the consequences of doing right.

8. A leader understands that failure is merely the backdoor to success.

9. A leader will always prefer to be faithful than famous.

10. A leader invariably lives his life as a sincere imitator of the best attributes of others. Heroes always have heroes.

11. With great privileges come great responsibilities. Blessings bring with them duties. And the joy of liberty is the most sober obligation ever entrusted to men or nations.

January 12, 2011

What a Difference a Few Hundred Years Makes

I am currently reading Charles Rappleye’s biography of Robert Morris (a somewhat unknown founding father who played an unbelievably large role in the founding of this nation), and I wanted to share a passage in the book I found extremely interesting:

……Morris’ resignation highlighted one feature that distinguishes the American Revolution from so many of the revolutions that would follow: its leadership almost uniformly abhorred the positions of power they came to assume. Like Washington and Nathanael Greene, like Jay and Duane in New York and Dickinson in Pennsylvania and even Henry Laurens, Robert Morris entered public life reluctantly, out of a sense of duty, and always considered it a burden. None of these prime actors fought to hold on to power the way their successors did in France, in Russia, in China, or in most of the tumults that marked the Age of Revolution; each of them---save for Jay, a born jurist----would step down from their positions of responsibility as soon as they felt they were able. This is not to disparage the motivations of any particular, later revolutionists, but to point out one key characteristic of this first, remarkable revolution.

Why Systems and "Fit" Is So Important in All Organizations

Whether you are coaching a football team or running a company, you can learn something about how to put together a winning organization from the information below:

So How Do They Do It?

The Patriots led the N.F.L. in points scored. They threw the most touchdowns passes. They committed fewer turnovers than any other team since the adoption of the 16-game schedule. They ranked second in rushing touchdowns and in net yards per pass attempt. And yet, as we’ve described, they are almost entirely powered by late-round and undrafted players. So how does Belichick turn an offense that appears marginal on paper into a dominant unit?

Tom Brady is the obvious reason, but New England’s offense has been less explosive with more talented teams during the Brady era. Even though Brady’s probably playing the best football of his career right now, the offense’s success is about more than the quarterback. Conventional wisdom would suggest that Belichick is both a master of the draft, finding gems with late-round picks, and a fantastic coach in the truest sense of the word, able to turn young men into elite players with his tireless attention to detail.

I’d argue it goes a step further than that. The Patriots, for the first time in the past few seasons, have regained a level of organizational clarity that few teams can match. When Scott Pioli and Belichick built the championship Patriots teams at the beginning of the decade, New England consistently added “their guys,” players who fit the Patriot profile. With the drafting of Hernandez and Gronkowski, and the re-acquisition of Branch, to go along with Welker and Brady, the Patriots are back to finding players who, first and foremost, fit their system. Green-Ellis, Woodhead and Branch wouldn’t succeeed on a lot of teams, but Belichick knows exactly what he wants out of every roster spot and only looks for players who possess those traits. And that’s a big secret of his success.

January 9, 2011

Letter to Congressional Leaders

The Honorable Harry Reid
Majority Leader
United States Senate
Washington, DC 20510

Dear Mr. Leader,

I'm writing in response to Treasury Secretary Timothy Geithner's appeal to you to raise the debt ceiling.

I understand that you didn't ask for my opinion. And with no political positions on my curriculum vitae, you may not even recognize my name. But I have co-authored two books warning about the United States' fiscal situation, starting with Financial Reckoning Day in 2003 and followed by Empire of Debt in 2005. I mailed copies of the latter to you and the other members of Congress free of charge. While it may not be sitting on your nightstand, I trust that you're at least aware of the book.

After we published the book, I wrote and produced a documentary, I.O.U.S.A., which was screened in competition at the Sundance Film Festival, nominated for a Critics Choice award and shortlisted for an Academy Award. The film attempts to present the fiscal crisis facing the United States in a way that the average American could understand. The film took two years to produce and premiered on Aug. 22, 2008 - almost a month before Lehman Bros. declared bankruptcy, kicking off the Panic of '08.

So after a decade of attempting to bring the root causes of our economic woes to light, I humbly suggest that the shortsighted tone of Mr. Geithner's appeal is itself part of the problem. It is, in fact, no different than Secretary of Treasury Hank Paulson's frantic three-page proposal that kicked off the bailouts in September 2008.

Sir, in short, by raising the debt ceiling, we're delaying the day of reckoning yet again. Instead of paying for our excessive spending today, we'll pass that burden on to our children and grandchildren. I have three young children. And I, like many Americans, already find it a challenge to educate them and provide for their health care. Now I must also worry about what their future is going to look like...what opportunities will they find when it's their turn to join the work force or start businesses?

Mr. Geithner shares his fears of a default in his letter to you. But his request simply means my children - everyone's children - will have to deal with that default on their own.

Do we really want our children burdened by higher taxes, excessive government regulation, higher mortgage rates, reduced incentives to start their own businesses and, as things are going, the end of the freedoms that you, Mr. Geithner, the rest of the American public and I cherish?

Freedom is the very promise that America bestows on history. But now, through our own malfeasance, we are in a position of telling the world, "We cannot afford to offer you the opportunity to enjoy that freedom anymore."

How did it come to this? And why perpetuate the very malfeasance that threatens our future prosperity?

For most of America, understanding the fiscal condition of the nation is no easy task. For that, they place their trust in you. No doubt, it's easier to do exactly what our Treasury secretary is asking you to do - ignore the problem and continue to kick the can down the road. But I'm asking you, on behalf of future generations, to think deeper about the problem and begin addressing it today.

To help you with your decision, here are some images you can use to illustrate the magnitude of the national burden.

As Mr. Geithner stated in his letter to you, "In February of 2010, Congress passed legislation to increase the debt limit to $14.29 trillion." To grasp that staggering figure, imagine stacking $100 bills on top of one another. To reach $14.29 trillion, your stack would soar 9,721 miles into the sky!

Said a different way, that's like 1,767 mountains of $100 bills the size of Mount Everest piled on top of each other.

Of course, the current debt wouldn't be a problem if tax revenue were exceeding our spending and therefore reducing the debt. But we both know that is not happening. Even if we taxed all Americans 100% of their income for an entire year, we still wouldn't be able to pay off our $14.29 trillion hole

What's more, the interest we're paying on the current debt is forcing us deeper and deeper into the hole. According to the TreasuryDirect.gov website, the interest payment on our debt was a massive $1.13 billion per day - for a total of $413 billion - in 2010.

The interest payment alone amounts to record-breaking deficits hit during the Bush administration just a few short years ago. If you agree to raise the ceiling, you effectively agree to drive up the interest payments until they exceed tax revenue - creating a situation in which we'll be forced to default, eventually. And the longer it takes to happen, the worse it will be for our children.

The Treasury secretary outlines how catastrophic a default would be for the financial system and the integrity of the United States:

Default would effectively impose a significant and long-lasting tax on all Americans and all American businesses and could lead to the loss of millions of American jobs.
When, I ask you, do we begin addressing the root problem? When do we admit that we're spending beyond our means and begin to address the problem in earnest? "We can live beyond our means for a very long time," to paraphrase a leading financier from I.O.U.S.A., "and we can do it on a very large scale - but we cannot do it forever."

The United States is like a private company suffering from a pension burden it did not plan for and that is losing market share because its products are no longer competitive. And it is as if the management has decided to take an extended vacation, rather than hold a meeting to find a way out of the hole.

In Congress, you don't address the real problems. You talk around them, play politics with them and then make frantic appeals at the 11th hour to borrow more money to paper over the problems again for yet another year.

At this pace, how do you honestly believe the government will ever balance its books again? In the era of uncertainty created by mayhem in Washington and ever-increasing global competition, how do you expect the economy to get back on track?

Let's put the numbers aside for a second. I'd like to ask you a simple question:

Imagine for a moment that you've chosen to smoke cigarettes all your life. You've ignored the warnings about them that appear all around you. Then, eventually, and unfortunately, you get diagnosed with lung cancer.

Luckily, you've caught the disease in its very early stages. The doctor presents you with two choices.

First, you can enter chemotherapy. The road to recovery, the doctor tells you, will be harsh. You'll suffer extreme nausea. You'll hardly be able to swallow from the ulcers you develop in your mouth. In short, you'll go through hell in an attempt to beat the disease. But because you caught the disease after the first symptoms appeared, you have a high chance at a full recovery.

The doctor also offers a second alternative. He's worked out a deal that allows you to rid yourself of the disease instantly. No pain. No suffering. No hell. All you have to do is agree to give the disease to your 2-year-old grandson.

Would you make that deal, Mr. Leader?

I trust you'll make the right decision about our nation's fiscal health. At the very least, there needs to be an honest debate over raising the debt ceiling. If you provide the rubber stamp Mr. Geithner is asking for, you will be as guilty as he of passing the buck. Each time the buck gets passed, the stakes get higher. The default Mr. Geithner fears only looms more ominous in our future.

The newly elected speaker of the House, John Boehner, has gone on record saying he'll agree to increase the debt limit because we have to be "adults" about addressing the fiscal crisis the nation faces.

What, may I ask, is "adult" about failing to address this issue altogether?


Addison Wiggin
Executive publisher, Agora Financial
Co-author, Financial Reckoning Day and Empire of Debt
Executive producer, writer, I.O.U.S.A.

cc: The Honorable John A. Boehner, Speaker of the House
The Honorable Nancy Pelosi, House Minority Leader
The Honorable Mitch McConnell, Senate Minority Leader
The Honorable Dave Camp, Chairman, House Committee on Ways and Means
The Honorable Sander M. Levin, Ranking Member, House Committee on Ways and Means
The Honorable Max Baucus, Chairman, Senate Committee on Finance
The Honorable Orrin Hatch, Ranking Member, Senate Committee on Finance
All Other Members of the 112th Congress

January 5, 2011

Death to the BCS

Rick Reilly absolutely nails it with his latest article for ESPN:
There is no Auburn versus Oregon game. No Tostitos BCS National Championship Game on Jan. 10. It's been cancelled on account of fraud. It's as phony as an Ivory Coast election.

If TCU can't play for the national championship, then nobody should play for it. Bust the crystal football this year. Until Nostradamus rises from the grave and can predict the future, we need to play this thing off. Anything else is about as real as Cheez Whiz.

TCU's 21-19 win over arguably the hottest team in college football -- Wisconsin -- Saturday in the Rose Bowl means the Horned Frogs are undefeated and untied and unwelcome in the BCS "Doesn't Prove A Damn Thing Game" in Glendale.

The Horned Frogs' perfect 13-0 season was rendered pointless by The Greedheads Who Run College Football.

Crazy, huh? TCU wins the roses and gets the thorns.

What a lie this BCS era is. They say a playoff would take too much time away from school, yet Oregon's players will have had 37 days off when they play again.

They say with this system, "every game counts." Except of course, TCU's epic win over Wisconsin to stay undefeated Saturday. Counts exactly as much as a rainbow to Stevie Wonder.

They say they don't believe in a playoff but they already have a two-team playoff. Why is a four-team playoff system any worse than a two-team system?

And what's the upside of a playoff? Besides quadrupling the money the colleges would make and quintupling fan satisfaction, I mean? And what's the downside? Oh, yeah, it would end the cash grab BCS officials wallow in now.

What a lie this BCS era is. They say a playoff would take too much time away from school, yet Oregon's players will have had 37 days off when they play again.

Just another day in college football -- the Chrysler K Car of sport -- the only place in the world where athletes have to shrug and say, "Well, I guess we just have to settle for an undefeated season," as a few Horned Frogs did after the game Saturday. "Today we proved that we have just as good players as anybody else in the country," said Horned Frogs QB Andy Dalton, who won't get the chance to prove another thing -- that they're better.

It makes me so mad I want to knock people's hats off their heads.

But when somebody asked TCU coach Gary Patterson on Saturday night if he was mad about it, all he said was, "I'm looking forward to sitting on my couch and watching the national championship game, because I don't have to sweat. I don't have to call a defense."

Really? That's all he's got? The inspirational "I Have a Couch" speech? He may have a great brain for football (he's won 36 of his past 39 games), but he seems to have mislaid his spine for the moment.

What Patterson should've said was: I don't know what game they're playin' next week, but if we're not in it, it's a load of bull potatoes. Just 'cuz somebody puts their boots in the oven don't make 'em biscuits. Anybody wants to be champion has gotta come through Fort Worth. It ain't hard. We got hotels, too.

Patterson is a guy who supports a playoff. He received texts all week from "all the little guys" in college football who never get the chance. But when he had a chance to speak up for them, for an entire sport, he got even littler.

That's OK. There's one guy who can change all this with the stroke of a pen. He's a guy who has broken a mountain of promises in the past two years, but can make it all right by making good on a promise he did make, the one to look hard into a playoff. President Obama.
In October of '08, he told me on his campaign bus that he was going to make a real try at getting an eight-team playoff done. Once in office, he told "60 Minutes," "I'm gonna throw my weight around a little bit." But he hasn't.

You want to win re-election, Mr. President? You could do worse than backing something that's already favored by 63 percent of Americans, and will now be favored by nearly every Texan, not to mention Utahan (Utah undefeated in 2004 and '08, but left out of the mix for a BCS title shot), Alabaman (Auburn undefeated in '04 but left out) and Idahoan (Boise State undefeated in '06 and '09 and left out).

Obama must have the Justice Department sue the BCS for violating the Sherman Antitrust Act. The BCS is run by a cartel of the 11 BCS conference presidents, Notre Dame and the five big bowl games who are restraining trade and colluding to hoard the gold. They are not exempt from antitrust rules. Utah Sen. Orrin Hatch (R) and Texas Rep. Joe Barton (R) have already looked into this. It would work. How many millions of dollars did TCU just lose by not being allowed to play for the title, not just in bowl TV dollars but in alumni donations and national prestige?

My favorite hypocrisy of the Bowlsheviks is: "The bowl system is tradition!" Yes, kids, there's nothing so "traditional" as a team from Texas winning the Rose Bowl and then moving to the Big East.

TCU is a killer team with an amazing story. TCU's seniors won 44 games. What reeks is they won't get a chance to win a 45th.

Just do it, Mr. President.

If this were basketball we were talking about, you'd have it done by the weekend.

January 3, 2011

World Airline Traffic - 24 Hour Time Lapse

Pretty fascinating stuff (the yellow dots are airplanes):

Book Recommendation

I just started reading (per Gov. Mitch Daniels' recommendation) Death to the BCS.
The book is a must-read.

If you think politics is crooked, corrupt, and bureaucratic, wait until you read about the BCS and the bowl system in general.

How America Messes Up Its Kids (Mark Goulston)

I felt like this entire article from Mark Goulston was worth quoting:
How America Messed Up Its Kids... And How We Can Fix Them
In today's world of blame and finger-pointing, we're teaching our kids that accountability and responsibility are slippery slopes that don't mean what they used to. For example, have you witnessed a parent-teen conversation that went anything like this:

Teenager: "Please, Mom and Dad, just let me do this, and I promise that I will take full responsibility for it."

Parent: "Do you realize that taking full responsibility means that if it backfires and goes wrong, you will own up to it, pay back whatever it takes to make up for it going wrong and learn from it so that it doesn't happen again?"

Teenager: "I didn't agree to that."

Parent: "Well, then what do you think taking full responsibility means?"

Teenager: "That if it goes wrong, I will say, 'I'm sorry.'"

If you have witnessed such a conversation, do you agree with the following?

Among our main roles and responsibility as parents is to teach, coach, guide and pass on to our children the character (and I do mean character) traits of self-reliance, resourcefulness, initiative, taking responsibility for one's actions and learning from one's mistakes (see "How to Raise a Self-Confident Child").

If at age 18 they are lacking these, they are going to find success, happiness and life in general a challenge and even overwhelming.

To bring it into sharper focus, consider that at the exact moment that you as a parent bail out your child from facing the consequences of their screw-ups and taking full responsibility for them, literally millions of children in this world the same age as your child are taking full responsibility for their actions and becoming smarter, stronger and wiser. Within the next 10 to 20 years, those children (from China, India and elsewhere) will become your child's boss, and they won't bail out or accept your child's excuses. Instead, they will fire your children.

How Did America Mess Up Its Kids?

One explanation might be what preceding generations had to endure and what they wanted for their children.

For instance, Americans born between 1900 and 1924, referred to as the G.I. Generation, were born to parents who endured coming to the United States, then heard and watched how the countries that they came from became embroiled in World War I, then enlisted to fight in the Great War and then lived through the Great Depression. It's understandable how these parents who lived through such difficult times would want their children to have it better. Having it better was about having a life where they didn't need to fear for their lives or livelihoods. It wasn't about sexual freedom or accumulating disposable income to conspicuously consume with.

The G.I. Generation grew up during the Great Depression, went to fight in World War II and then gave birth to the Baby Boomer Generation, born between 1946 and 1964. It's understandable that wanting their Baby Boomer children to have it better, especially during the prosperity and relatively peaceful years in the 1950s, would go beyond mere economic survival. Instead, it crossed over into giving their children more of what they had less of, from more sexual freedom to more drugs to more rock and roll to hot cars and especially more mobility as Baby Boomers left home to settle down across the country.

Next, early Baby Boomers gave birth to Generation X, and later Baby Boomers gave birth to Generation Y/Millennials. Although Baby Boomers experienced much more freedom than their parents, as a generation they still largely took responsibility for their actions and did not expect to be bailed out. Baby Boomers may have been tolerated and moderately indulged by their parents, but they didn't take it to the level of entitlement. That required another generational turn.

As the G.I. Generation gave their Baby Boomer children more freedom from oppression and repression, the Baby Boomers have given their Generation Y/Millennials freedom from responsibility and accountability for their actions. They have moved past indulging them directly to spoiling them. And rather than letting their children face the consequences of their actions, Baby Boomers have more often bailed out their Gen Y/Millennial children. And when children feel no responsibility or accountability for their actions, the next step is for them to feel and act entitled -- entitled to act according to how they feel and to what will immediately gratify them, and entitled to not do whatever they don't want to do. It is this attitude that would give rise to the Parent-Teenager dialogue that opened this blog.

What We Can and Need to Do About It

An initial step that might be helpful is to reach a consensus between parents and their children as to what terms related to personal responsibility mean. Here are ten terms that come to mind for me:

Commitment: the level of dedicated action(s) you continue to take after your enthusiasm for an enterprise stops.

Accountability: taking full responsibility for your actions by owning up to the negative or failed results, taking action to make up for it to the person(s) you let down, and learning what you did wrong so that it doesn't occur again.

Maturity: how well you are able to resist an irresistible impulse and instead have and exercise judgment and do the reasonable thing. In the brain we refer to this as exercising one's executive function.

Honesty: this is simply telling the truth according to the facts as you understand them. You know honesty best, when you tell a lie. Pathological liars lie whenever they are trying to get their way and take advantage of a situation. Compulsive liars lie both when the are trying to get their way and when they are trying to get out of facing the consequences of their actions.

Forthrightness: this is coming forward and telling the truth and revealing untruths that you become aware of. It's believing and following Justice Louis Brandeis words: "Sunlight is the greatest disinfectant."

Character: what you do when you are frustrated, angry, annoyed, afraid and/or bored and nobody is watching and your chance of getting caught is close to nil.

Sacrifice: what you do unto others who will not (immediately) be able to pay you back by doing unto you.

Compassion: what you feel unto others who will not be able to do more than say, "Thank you."

Thinking ahead and planning: overcoming the aversion to anything that causes you to forego immediate gratification.

Listening: and then pausing to consider what you've heard before rejecting it, tuning out or competing with it (a skill every generation needs to learn).

What additions or corrections would you make to this list? What terms come to your mind regarding personal responsibility and being accountable and what would be your definitions?

Next step...

As soon as it's possible, parents, teachers and children need to begin having an ongoing discussion of these terms at the beginning of every school year from the third grade forward. That is because these concepts will take on different meanings as children grow. Include as much interactive and experiential exercises as possible. And finally, make a central part of those discussions: a) why children should care about these ideas and values (one reason being that if they don't, they will be unhirable at age 22 when they finish college); and b) how to implement these values into curriculums and schoolwork.

Here is the challenge: People don't do what's important, they do what they care about. Something that might get in the way of parents "caring" about teaching and guiding their children to have and live the above values is that too often parents live vicariously through their children (i.e. know any screaming parents at their kid's soccer games?).

It's also possible that many parents want to indulge their children because those parents resented the deprivation they experienced and that they don't unconsciously want their children to resent them. To counter this, parents need to go from resenting the hardships they had (and acting out on them by spoiling their children) to appreciating how that adversity helped them develop such positive traits as tenacity, perseverance, resilience, resourcefulness and perspective.

Children will only take personal responsibility and be accountable for their actions when parents care enough and see the value in saying "no" when appropriate instead of "yes" and then sticking to it.

It's also helpful for parents to keep in mind the advice I provide managers and leaders: "If you sacrifice being respected for being liked, you won't be either."