The University of Chicago has produced another Nobel Prize winner. Congratulations. I will introduce, in a bit, a topic which I believe will be recognized as a Nobel years later — the fact that free trade isn't always a good thing, especially when the job losses that result reach a certain level that outweighs the benefits of lower consumer prices.

In other words, it doesn't matter if things are cheap if you have no money to buy them because you don't have a job!

Correct?

Such is the current trajectory of the US free trade policy, based on the inherent idea that a nation can survive as a service economy (the history of trade route cities proves otherwise) rather tan a manufacturing economy and that importing low cost workers will help you stave off decline as this happens. Actually, it only exacerbates countless problems because of unfactored costs.

But enough of that…let's talk about getting rich, really rich. How rich? Warren Buffet or Bill Gates rich…

Why is Warren Buffet rich? Well it's his karma - you can say the causes are from this life, and try to emulate them, but I doubt you'll get the same results. Why? A past karmic foundation must be there for the results to be so LARGE, no?

But there are two reasons among many conventional  ones, if we prod into that area, which I want to discuss.

One little known reason behind Buffet's success: Rich people tend to have longer time frames than ordinary people. They think in terms of the long term, and delay current consumption for future consumption. Their decisions are made with a long view in mind. They act for the long term. They invest for the long term. They make decisions with the long term in mind.

If only our leaders would think that way, rather than "How do I vote to win votes?"

By thinking in terms of the long term, rather than in 4 month long quarters (as most corporations do), Buffet isn't worried about what the stock market will do tomorrow, next week, next month or next year. When he buys, his heart is at rest because he's made an investment in a company, not a trading opportunity. He's thinking of the long term and uses a long term horizon for his investment decisions. He makes the RIGHT decision because he's thinking long term.

Hmmmm …. statesmen should think that way as well.

There's a second thing here — he thinks in terms of buying a whole company….being the sole owner. That changes your perspective as well as to what to buy and what to do;  it changes your perspective as to what you should do in terms of strategies and decisions, because once again the next few reporting quarters don't matter. You're the owner — the long term matters. Survival matters, not raping the firm or destroying it for short term gains.

When you make decisions as if you are the sole owner, you tend to protect your property a lot better than if you were just a temporary steward, who wants to therefore squeeze every dollar out of it he possibly can. I've seen it for myself in visiting Communist China that when you make decisions as if you are the sole owner of private property, everything runs better, too. When no one is the owner, boy oh boy is it a mess. (That's just reason #8247 why Communism is the stupidist thing around). When you give KFC managers a stake in their little chicken outfit,  productivity and profits improve almost overnight in the very same location that was managed by the very same person.

As I always said, think with WISDOM and you'll get it. Play with PhDs all day long with their theories and you won't. The US education system has now, for the past 30 years as an example, played with all sorts of new theoretical ways to teach and the results are now worse off than ever… the same can be said for our medical system that was once the shining light of the world. So much for PhDs vs. common sense wisdom and management.

This is all important for our topic… which is how should the leader  of a country think?

The leader of a country, elected or not, should think as if he is the sole owner of the country and make decisions with the long term in mind, rather than what's popular or unpopular to win him/her votes for the next election. He is a steward of long term decisions and consequences.

The short term type of thinking — to get votes for the next election — will sooner or later put the country in chaos and lead to many catastrophes, disasters and emergencies, or slow deteriorations rather than just 20 year crises, where everything could have been prevented. In order not to lose a vote, decisions that need to be made are never made. No one says anything important. No one wants to act until it's too late.

That is the job description of the politician. Not the statesman.

A perfect example is the benefit of having one official  language for a country.

HISTORY shows, yes history shows that countries fracture across language lines. Time and again, across nations and across time, countries fracture across language lines. Go check it. Go prove it. Try to say "this time it's different."

Countries that unify the language, on the other hand, cultivate an underlying framework for unity; those that don't unify the language make it just that much harder to stay together over time. Witness China and India; India still has several dozen languages that are an impediment to national unity compared to the unity seen in China, which decided to institute one language and writing system ages ago.  No one says you should not permit multiple language usage in a country. History just shows you should make one official language for all government purposes. That forces a minimum level of conformity and a common standard. It's a unifying force for the nation.

What about " free trade "… 

The economics behind free trade developed  during agricultural economies, not during industrial times of manufactured goods with high technology and huge firms that benefit from economies of scale.  It was developed  by countries that would benefit from the concept without being hurt by it.  They were  "special cases."

With globalization and free trade REALLY going international, countries are finding out that they really aren't benefitting as they assumed they would according to the free trade dogma.  What it really means is that someone can come into your country and conquer you economically, which I've shown how to do in my book on Kuan Tzu.

Some academics have finally put a finger on it - Global Trade and Conflicting National Interests, by Ralph Gomory and William Baumol. They have been called the "Martin Luther" of the Free Trade Church of globalization because their economic arguments favor a reformation of the process which is now destroying countries, especially the US. Within 50 years the idea will be discredited because of "special cases", but by then it will be too late.

For example, there are indeed differences to the strength of your economy depending on what you export. If two nations export the same amount of goods, but one wholly in the form of pretzels and the other computer chips, one has more strategic strength than the other even though the dollar volume of exports is the same. 

Common sense, but classical models don't allow for this …  nor do they allow for the fact that at some point the benefit of cheap goods is less important than an extreme of unemployment … and thus we see the decline of our most beneficial industries in return for the growth of shaky service based ones. This puts an economy at risks during times of crisis and extremes … and guess what? Extremes and crises seem to happen every 40-60 years or so!

To me the countries of Iran, Iraq, Afghanistan and so forth are not the BIG security threats to the US. This is is the basis of it all - economic security. Job loss and related issues are THE NATIONAL THREAT, and this is what's being ignored. See Freedom to Fascism for an eye-opening understanding.