by Carl Delfeld, Global Markets Strategists, The Oxford Club
Monday, December 24, 2012: Issue #1932
The independent streak in America runs deep.
Independent voters now outnumber registered Republicans and Democrats. Independent investors are changing the landscape of financial services. Charter schools are leading innovation. Entrepreneurs form the backbone of our economy.
I think it all comes from the cowboy – a powerful symbol I appreciate much more after living in Colorado for more than a decade.
As America faces its tough economic challenges in a presidential year, perhaps we should look at just why the cowboy is the symbol of America at home and around the world.
Cowboys represent both geographic and inner mobility, and the willingness to take risks. To persevere, and overcome hardship and challenges is the story of the cowboy – and of America. The American cowboy is everything good that our country is and should be.
Simple and Straightforward
First and foremost, the cowboy is self-reliant, but generous in helping others in distress. He likes to keep things simple and straightforward. Resilient and persistent, the cowboy accepts and welcomes that great accomplishment and wealth only come with commensurate risk. He has a keen sense of honor and stewardship, and appreciates that activity and flexibility are the keys to success in gaining a livelihood.
In judging a rope hand, issues of gender and race are ridiculous and “betting the ranch” is done with their own money. While there’s nothing wrong with borrowing money to finance a herd, cowboys know that it’s hard to ride tall in the saddle when you owe everybody in town.
I believe the above characteristics aren’t just vital to success on the range, but in our personal lives and in our nation’s economic and political matters.
But cowboy capitalism, like its sibling cowboy diplomacy, has taken a beating lately, and not just in the salons of Europe. Unfortunately, the cowboy image many carry in their heads is upside down: the cowboy as reckless, carefree and irresponsible.
It seems to me that our country is unfortunately riding away from true cowboy values and many Americans feel this in their bones. But don’t despair…
It was French historian Alexis De Tocqueville who recognized that “the greatness of America lies not in being more enlightened than any other nation, but rather in her ability to repair her faults.”
In my book Red, White and Bold: The New American Century, I suggest eight key relationships that need to be rebalanced if this is to be another American century.
Risk is Not a Four-Letter Word
Let’s briefly look at the first two relationships, with cowboy capitalism in mind.
Risk vs. Reward – The basis of capitalism is weighing potential rewards against risks, making a decision, and then putting capital to work. Taking risks shouldn’t be confused with gambling, but rather careful calculation of the probabilities of success against the sobering possibility of “back to the drawing board.”
It’s vital to keep in mind that risk isn’t just a four-letter word. On the contrary, without taking risks, nothing of lasting value can be accomplished.
All of America’s scientific and commercial achievements were due to individuals taking risks, sometimes despite what appeared to be daunting odds. And economic growth comes only when capital is allowed to flow to its most productive uses – and that means to people and companies taking on these risks.
A culture of risk taking and innovation is at the heart of American capitalism and the process of creating wealth. America’s vigor is also closely tied to a culture of second chances. At the rodeo of life, the only unforgiveable sin is failing to try in the first place.
Responsibility and Honor – But while the cowboy and the trail boss understand that a nice bonus awaits them if they get the cattle to market on time, they never think, like some bankers, executives and traders, that the cattle they look after actually belong to them. Cowboys have a sense of keen sense of stewardship, responsibility and honor that all people should follow.
Cowboys also understand that while on a cattle drive a lot can go wrong – and usually does. Looking to Washington to get them out of a fix is hopeless and insulting. They’re an independent lot, and depending on the Mideast for energy or the Chinese for debt financing is like a cold cup of black coffee on a bleak winter morning. Cutting spending, offshore drilling, nuclear power and clean coal are all better than going on bended knee.
Finally, any cowboy would grimace at the complexity of government red tape, many of our financial products and an impossibly complex tax code that confronts every budding entrepreneur, as well as the 27 million small businesses in America that generate most of our economic growth and employment.
As a rule, cowboys aren’t keen on paperwork.
In 1936, The Federal Register of new regulations contained 2,600 pages. By 1950, it had grown to 20,000 pages, and by 2008, it had grown to 80,000 pages.
Try getting that into your saddlebag.