In my professional work, I have always been fascinated by what I call “timeless information,” information that does not die with the end of the current news cycle. Having wielded a scissors well in pursuit of such information for many years, there are always piles and piles of it around my office.
Very interestingly, much news that appears only significant for the 48-hour news cycle becomes more timeless by relationship to some other 48-hour information. Suddenly you recognize that you have the pieces of a large mosaic which in the absence of collecting would not be evident.
So when a friend of mine asked me if I would write an essay on the relationship between the finances of the market economy and the government economy, I said yes. I could think of many things to say that were buried somewhere in all those piles of articles in my office. Eventually, the piles overwhelmed my essay, and almost overwhelmed me as they drove me down the road to what became the “Simple Guide.” I never set out to write a book, but the more I went forward into the wealth of knowledge produced over a long time by writers and journalists who were professionals in possession of great information with a 48-hour life expectancy before it was discarded into the trash, I could not stop.
The book is a tribute to these people. My role is the assembler of and commenter on a fascinating mosaic. I am indebted to all of them.
I was 12 years old when I first sold my labor for a profit of $1.00 per hour working 20 to 30 hours a week during the summer cutting grass. At 16, I acquired my social security card, without my knowing that my employers and I were both going to be paying payroll taxes for a long, long time. By the end of high school, a friend of mine figured out how we could get jobs at Granite City Steel. So began my first industrial employment. To become a member of the Steelworkers Union, we had to serve a provisional period and a hazing. In this setting, I met a man, Henry, who would become the greatest teacher I ever had. He was a hundred and fifty pounds of taut muscle with a personality and demeanor that were even stronger. He was going to take the white boy from across the river and show him things that he could never learn anywhere else. The steel mill had its own railroad and a lot of tracks. Henry took me under his wing, although I was larger, adopted me, cared for me, made me his co-worker and taught me the only trade I ever learned, being a Gandy Dancer, a railroad truck repairman. It was humbling and liberating at the same time. What fierce energy, what a sense of pride in work, what a colorful sense of humor, always taking care of his fellow workers, a great craftsman. And, what a great man in such a small setting. At the end of every day, he went his way and I went mine. He is a tribute to the men and women who do the “hard work” of our economy.
A memorable event at Yale University was to have a professor during my freshman year who was always postulating that the Soviet Union’s centrally planned economy might trump the world’s free market economies in the future. I soon learned real academic freedom meant skepticism about almost everything the student believed. And, therefore, at Yale, I began to develop my own skepticism about academics. Not surprisingly, I earned a B.A. in economics and regret that I was not well enough prepared to major in intensely mathematical econometrics. After economics, political history fascinated me. In fact, the global tour in the “Simple Guide” has its origins in this fascination with the study of politics and economics in various countries. In other words, if you want to understand a political system, study country’s economics and the outcomes they produce.
The combination of interests put me on the course of an offer of employment from the CIA in 1967. Maybe this also helps explain why my office is so cluttered with piles and piles of cut out articles.
In a great twist of fate, it snowed in May of my senior year. That winter had been a long one. And, the very day I had arrived back at Yale from receiving my job offer at the CIA, I was greeted by an acceptance letter from Stanford University Business School. I chose to head to sunny California in 1969 with a bunch of eager business types. At Stanford Business School, I had an academic awakening in which I discovered that almost all economic statements could be reduced to mathematical equations. That was the good news! Since Intel Corporation had not yet done its magic for small computers, my fellow classmates and I “programmed” our computer with 40 column cards and key punch. And to this day, I remain a “luddite” with respect for the personal use of technologies. (I am writing this with a pencil.)
By the time of graduation, the Vietnam War was waging on and I was on my way into the Navy immediately after graduation. It took me many years to fully understand the Vietnam War. I served as a line officer from 1969 to 1972 on one of the last destroyers built in World War II. I enjoyed my service and did well with my 40 man division of mostly unruly people, except when they were on duty. Having come from all points of the compass to the Navy that trained them, when they were on duty, they were a well oiled, motivated and reliable machine. Serving as a member of the great American institution, the U.S. Navy, was a privilege. The men I served with always taught me more than I taught them. And, yes, we did have our colorful experiences too.
To understand Vietnam, I had to read three great books over a period of years, “We Were Soldiers Once and Young,” “Dereliction of Duty,” and “Triumph Forsaken.” My private citizen analysis is this. Over 50,000 American Soldiers gave their lives, over 250,000 American Soldiers were wounded in action, we won all the battles, and after Nixon took the war to Hai Phong, we forced the enemy to the peace table. And while we were negotiating the peace, the Democratic Party, which had been infinitely patient with President Johnson’s prolonged “no-win” strategy, cut off funding for the war. At this critical juncture, the amount of money that would have been spent establishing the peace would have been chump change relative to the war’s total cost. The only explanation I can see is that they wanted to avoid handing a victory to Nixon. Because of the Democratic Party’s actions, 2,000,0000 to 3,000,000 Vietnamese and other Southeast Asians would die and the sacrifice of all the soldiers would be nullified.
Because the press had misrepresented all of the above, hardly anybody talked much about their military service or Vietnam, and we put our uniforms away. Arriving home, I went to work for McDonnell Douglas at Fighter Town USA where the F-4 Phantom and the very first F-15 Eagle (and later, the F-18 Hornet) were built. But large corporate organizations made me uncomfortable and I found my way to a smaller real estate company where I progressed from a construction coordinator to Comptroller of its parent company. In this capacity I helped in non-accounting activities including coal operations. The great lesson here was to see how successful entrepreneurs avoid risk and excessive borrowing while building value.
This period of my career covered a period of volatile and violent events in American economic history: the 1973 Arab Oil Embargo, the 1979 Oil Crisis, Jimmy Carter Stagflation, a radical spike in interest rates, the prime rate rising to 21%, the domestic rate of inflation rose to 12% annualized, and you could purchase a long term Treasury Bond with a 15% return. All of these events were unprecedented in our economy and provided a lot of hard knocks for everyone.
By 1981, I was ready to make the great entrepreneurial leap forward and start my own company. I had great hopes, but the reality is that it took me almost 15 years (yes, 15!), to establish a solid foundation for my business. And I had all the usual financial difficulties in the process of getting there. Let’s just say it was not dull with 4 kids to feed and educate.
In the end, Orion Investment Company specializes in low turnover long term investments where time, quality and the avoidance of risk produce superb returns. One of the most important things you must do in investing is not lose any of your beginning capital, for over long investment horizons, money lost early on costs you a lot of money later. We are far, far away from Wall Street with its products, and happily so.
Entrepreneurial risk will teach you more intensely and more forcefully about what makes the world go around. It is a reality trip that is a constant hard reality. This is why entrepreneurs, anybody who starts his own company, be it a restaurant or a computer chip maker, are so often the toughest critics of “Big Brother Government .”
So, in my 65th year, I found myself with my pencil writing an essay on government finances that uncontrollably morphed into “A Simple Guide: How Liberalism, A Euphemism for Socialism, Destroys Peoples and Nations.”
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