John Scott - "Life, Liberty and the Pursuit of Happiness"... a dated document?
Let’s ponder these now controversial words in modern society and analyze what they might mean versus what the Founding Fathers intended. While on a flight from Detroit to Denver this past week, I saw a man reading USA Today. The headline of the business section titled Money, projected in bold print, “ Confidence and Calm are Critical”. What? I found myself reflecting on the Ben Bernacke video I sent to you back in February. If you remember (or did not watch it), it outlined his view that the Fed lacked options to help the economy and thus his current plan was to embark on a “communications campaign” to entice Americans to spend. What? But looking deeper into this quandary that we find ourselves in, our intense emotions, which we have discussed for many years now, have now created a society that demands “ security”. This has become our primary focus, and it is a losing formula.
Let’s agree for the purpose of this writing that we all still agree with the Founding Father’s notion of “the Pursuit of Happiness”. What fosters happiness; security or freedom? Another word for ‘freedom’ is ‘liberty’. What does that mean to you? Americans are experimenting with replacing our freedom with the notion of security. Do you see this everywhere? I do, and it is having a dramatic effect on all facets of our lives including government regulation and even our investments. Historically, cultures that have over- valued security have had a devastating history. Consider at least three cultures that were feeling unsafe: the French pre-Napoleon, Germany just prior to Hitler’s populist win, and the more modern Ugandans in 1971 with the rise of Idi Amin. Go back and Google or study these and in each case the people were feeling really unsafe and therefore increasingly prioritized security. The predictable then happened and in each case a charismatic figure came along with a promised security, which of course garnered great support and ultimately got them elected. None of these leaders forced their way into power … that came after winning their elections or popular consensus. This is a critical point. I think it proves two key lessons:
1. Total and complete security is simply impossible.
2. Leaders who have to pursue it eventually get frustrated and thus have to take on a reign as dictator to get things done their way.
This is what the history books show us over a few centuries.
Now, I know that I am probably ruffling some feathers, so let me say that I do not feel that America has deteriorated so much that we are in a similar mess today. But I do think we have begun the steps to lose our focus and we need to be careful to, if not dramatically, shift our thinking or we could be headed for the history books. In essence, we just don’t understand the cost of freedom and accept the risks that are inherent. Freedom is not, nor will ever be, free. When reminded, we should know that. It is only through freedom that one can find real happiness. Happiness always carries elements of risk. Pursuit of security fosters paranoia as we experience the inevitable and senseless impossibilities.
Can we apply this truth to portfolio and wealth management? Unquestionably so! Your happiness will never be even close to complete by simply placing your money in a box or a savings account. Doing so only quells one’s fears of losing it. This is paranoia … right? Freedom, on the other hand, is using your hard-earned wealth to enhance life for yourself and others. To serve and be happy, not hoard and be fearful. If this is the truth … and I know it is … then wealth needs to be handled in a way that effectively manages risk. The fact is that without exposure to elements of risks, one can never truly live a life of Freedom. If you are reading this and struggling with this concept, call me personally and let’s drill down deeper. At Cedrus, we exist to help our clients, families, and friends buck the trends of a deteriorating culture, and instead stand as “points of light” in an unsettled and fearful world of pawns that are being played in a “communications campaign”. Let’s pursue happiness together.