History of Economic Recovery | Shepherd Capital Partners

03.03.2009

Then and Now

Learning from the lessons of Lincoln.

President Obama feels a close kinship with Abraham Lincoln. To be sure there are many similarities. Both were born outside Illinois (Obama in Hawaii and Lincoln in Kentucky.) Both men became lawyers and served in the Illinois State Legislature.

US National Debt continues to skyrocket with new budget.

Each served only a single term in Congress before ascending to the Presidency. And both men were (are) powerful orators who catapulted onto the national political scene and became commander-in-chief with no previous military experience.

President Obama often looks our 16th president as a model and source of inspiration, and as inspirational models go he makes a good choice. I would encourage number 44 to look to Mr. Lincoln even further however, for inspiration in substance as well as form. President Lincoln also governed during very turbulant times in our history. And as he so eloquently put it:

You cannot bring about prosperity by discouraging thrift. You cannot strengthen the weak by weakening the strong. You cannot help the wage earner by pulling down the wage payer. You cannot further the brotherhood of many by encouraging class hatred. You cannot help the poor by destroying the rich. You cannot keep out of trouble by spending more than you earn. You cannot build character and courage by taking away mans initiative and independence. You cannot help men permanently by doing for them what they could and should do for themselves.
- Abraham Lincoln

This quote is as relevant today as it was 140 years ago. Most people agree that our current crisis was brought about in great part by horribly irresponsible abuse of debt – by our banks and other financial institutions, by our government, and by the American people (as we argued in Save the World.)

So what are we doing? We are discouraging thrift, taxing the wage payer and spending WAY more than we earn. We, the American people, shoulder a hefty chunk of responsibility for our current mess, but we also seem to know when the party is over and how to make the necessary choices. The household savings rate hit 5% in January according the Department of Commerce, the highest level in almost 14 years. Meanwhile our government is ramping up its deficit spending to the tune of $1,750,000,000,000. Our government “for the people” needs to take a cue “from the people” – they owe it to us.

When people are doing well they travel more, go out to nice dinners, buy new cars. When times are tough we eat in, enjoy “staycations,” and just do the regular maintenance to keep our cars running well a few more years. We seem to understand that discretionary spending is a luxury of strong economic times. Shouldn’t we expect the same of our government?