update 6/05/2009: You can watch Dave Ramsey's Town Hall for Hope free on Hulu.
I attended Dave Ramsey's Live “Town Hall For Hope” Simulcast Thursday night and wanted to share some thoughts from the program. Is this related to the CPA Exam? No – but it's related to the economy and the job market – two things that strongly affect the accounting profession and your pursuit of the CPA designation.
Let me say two things:
1. This is Dave Ramsey's opinion (which I usually happen to agree with) and commentary and not intended as professional advice of any kind.
2. There will be people who take issue with various things that he said because everyone has an opinion and many people with opinions think that they're experts. As it turns out, they're just experts on their own opinion, and even that is subject to change. If you think Washington walks on water, the following will probably fall on deaf ears.
Oh, and one more thing – I was scribbling furiously during the event and took notes as fast as I could and still read my own handwriting. I tried to quote him word for word, but had to fill in the gaps afterward using the live blog from the telecast, and it *still* may not be perfect, but the spirit of the message is intact.
The program started with fear. Americans are scared right now. It starts in Washington, the media follows, and it causes Americans to freak out.
“Fear is the antithesis of hope.”
A man named John Maynard Keynes received a B.A. in mathematics from Cambridge in 1905. He came to the US in 1934 and had a meeting with FDR to tell him how to get the US out of the Great Depression. FDR finally listened – four years later. Keynes held that full employment can be maintained with government spending, government investment, and government hiring. Keynes also said that the government must deficit-spend in a slow economy.
In 1944, everything rebounded with the GDP skyrocketing and unemployment dropping to 1%.
The New Deal and Keynesian Economics worked a miracle, right? Wrong.
In 1941 something called World War II was going on and the men of the US were off fighting and the women were working stateside. Everyone was working and we were making stuff – a lot of stuff, for the war.
“Keynes got credit for what World War II did.”
Then, Milton Friedman – the father of capitalism came along and said “you're wrong”.
“…democracy is like a three-legged stool. One leg, political freedom; the second, economic freedom; the third, moral responsibility. Weaken any leg?the stool topples.” – Michael Novak
“We need a capitalism that has a value system that cares about its employees and cares about its customers.”
“Capitalism is the source of hope for America.”
Good Morning America
Dave was on Good Morning America around the time of the first bailout (Fall 2008) with two fellow “financial goobs” that he highly respects and believes that they are sincere. They made comments like “well Dave, they have to do something…most economists agree that something has to be done.”
“I'm reading a different (economics) book than they are reading.”
“I believe you can be sincere and still be wrong.”
“Bush bailed out stupidity. The new administration came in and they stimulated stupidity.”
“The truth is you're grownups, you don't need a keeper or a caretaker, and this is how life works. It's not fair…We've got to go back to some basics. We need to love people enough to allow them to fail. Failure brings clarity. Failure will run you towards excellence. If there's no chance you can fail, you will never be at your best…Failure needs to be an option.”
“We need to re-introduce a word into the culture. This word is now politically incorrect – the word is ‘no'. It will set you free … No, you can't buy a house. You're freaking broke.”
“My father used to say ‘you shot it, Tarzan, you eat it.' “
“Take responsibility when you cause the mess. Learn your lessons and keep going.”
Question for Dave: “Is this our generation's “Great Depression”?
“I hope this is this generation's Great Depression. People from the Great Depression were changed after going through it. That generation learned and gleaned something from the pain.”
In the Depression, the stock market lost 90%; we've only lost 57%. This isn't even the greatest recession in our generation.
When Nixon resigned, the stock market dropped 50% and took 60 months to recover. We had 11% inflation and gasoline lines that went around the block.
In 1982, after four years under Carter, US inflation was 10-13% and 30 year fixed interest rates were 17%.
Yet – 47% of Americans polled say that they fear losing their job.
Why? Fear – not reality.
Question for Dave: What other alternatives are there to the stock market since things are so bad?
Fact: In 100% of the 15 year periods in the stock market's history, the stock market has made money.
The stock market is artificially low right now. Why? Fear. It's hysteria driven by the media.
“If you don't believe that Wal-Mart and Home Depot will come back – you've given up. Do you really believe that these companies are worth half of this time last year?”
“If you have money to invest in the stock market, it's like you are at K-Mart and it's the blue light special.”
“I've decided that economic forecasters exist only to give meteorologists credibility.”
Three things to do if you're struggling with hope.
1. Get up. Take action. Get moving. Even if it doesn't make sense, at least you are doing something.
2. Don't participate in loser talk. If you hang out with losers, you know what you are going to be? A loser. Stay away from the “Eyeores” who whine about everything in life. Studies show that your income is within 10% of the average income of your 10 closest friends. Choose your friends and influences wisely.
“Five years from today you will be the same person you are today except for the books you read and the people you meet.”
3. Learn to give again. If you don't have money, go serve the homeless. All of a sudden, you'll get your eyes off your hopelessness.
Tonight was a breath of fresh air. It's nice to hear someone say publicly that we're going to “be ok” and have some optimism for a change. Optimism seems to be in short supply these days.
The quote of the night:
“It's not a perfect formula, but you know that your best chance at success is YOU…and it's really your only chance. If you wait on some congressman to fix your life – darling, you're going to have a long wait. Have you noticed how effective they are at anything? If you stand there at the mailbox, you're going to be standing there until you're old. The President is not going to fix your life whether he's Republican or Democrat…and it's not their job even if they think it's their job.
It's YOUR job to fix your life.”
Amen, Brother Ramsey.