Friday, July 1, 2011

Happy 4th of July!


















We at Taylor Frigon Capital Management would like to wish all our readers a very happy Independence Day this 4th of July.

We extend these wishes to readers who are not in the US as well, since we believe that the truths articulated in the Declaration of Independence on July 4, 1776 are universal human truths belonging to everyone by virtue of being an individual human being -- they are not granted by one government or another but are "self-evident," "unalienable," and "endowed by their Creator."

We also feel it is appropriate to sound a note of optimism this July 4th, as so many in the United States and the world at large are beset by fears of a new debt crisis triggered by Greece which will engulf the world, 1970s-style hyperinflation, or some other form of "global train wreck" on its way.

While there are certainly significant economic problems -- almost all of them induced by harmful if well-intentioned forms of government intrusion or downright socialism (even if "European-style" socialism) -- we would point out that investors can acknowledge these problems while still acknowledging the fact that in the long run, the system of freedom, rule of law, limitation of government, and right to private property established by the Founders has led to the greatest advances in human productivity and prosperity that the world has ever known.

On the other hand, systems in which the government levies excessive taxes in order to support pension and benefit systems such as those enjoyed by certain government employees in Greece (and in California!) inevitably self-destruct. We have argued that the attention this fact is now getting is at least a silver lining to the clouds over Europe.

However, those who are predicting that America is already worse off than Greece (including many voices in the United States from both sides of the political spectrum) are overlooking the fact that the United States is producing more than it ever has in its history, and continues to be the home of innovation and entrepreneurship (yes, even in California!).

We believe that amidst all the current negativity, this weekend would be a good time to relax, consider the benefits of the liberty and rule of law envisioned by the signers of the Declaration of Independence, and be thankful for the society that their vision made possible.