GEO Principle Blog

Use faith and reason to make career choices

I write about the banking industry for my day job, so my attention was drawn to this article by David Leonhardt on President Obama's interest in reforming the financial services industry. It is set to run in this Sunday's New York Times magazine.

For me, one of the most interesting parts of the article comes at the very end where he writes about the possibility of the largest financial firms losing their ability to generate the level of profits they have enjoyed most of the past two decades. Leonhardt writes:

"Highly leveraged financial firms became a dominant part of the economy. Their profits allowed the firms to recruit many of the country’s most sought-after employees — mathematicians, scientists, top college graduates and top former government officials. Yet many of those profits turned out to be ephemeral. So some of the best minds were devoted to devising ever-more-complex means of creating money out of thin air, the proceeds of which then drew in even more talent."

I am fascinated by the author's sense for who constitute the workforce's "best minds." Apparently it was those geniuses who devoted their professional energy to devising money-making schemes without regard for customer or society. 

For any of us, figuring out where we should fit into the workforce is a big decision -- a decision which I would argue must be made in the context of both faith and reason. Reason alone might drive someone into a lucrative business without consideration for the purpose of the work. Faith helps a person see his or her purpose. Reason alone might lead someone to money alone, but faith and reason together will lead someone to a purposeful career that may also pay well.

The great management guru Peter Drucker is famous for advising people to not seek wealth or fame, but to seek usefulness. I wonder if these "best minds" who went to work for the big Wall Street firms ever read Drucker. Intelligence is important, but it is not enough by itself. There should be faith behind the intelligence that guides a person in how to use it. Without that guide, genius gets wasted on the development of negative amortizing mortgages and securitization schemes that hide the quality of underlying assets.

When your friend or pastor encourages you to live your faith, this is what they are talking about. Make important decisions in your life according to both your faith and reason so you don't end up devoting your life to meaningless endeavors.

Two changes would make entrepreneurship more attractive

I am a big fan of entrepreneurship. I consider myself to be an entrepreneur, albeit on a small scale. Entrepreneurship gives a person great freedom to take their work in a spiritually-fulfilling direction. I am not suggesting this is easy, but at least when you are working for yourself, you can consider options that would not be possible if you were working full-time for someone else.

Only a small percentage of people in the workforce venture out on their own. I think there are a lot of people who would make great entrepreneurs if they would just give it a try, but too many are unwilling to give up the security they perceive to be getting from their current employer.

Plus, there are a number of other things that hold people back. Being an entrepreneur is not only risky, but it is difficult because the culture, including its tax laws, are really set up more for employees than self-employed people.

Here are two suggestions for lawmakers to create a more entrepreneur-friendly culture:

First, give self-employed people parity with employees on FICA. When you work for someone else, you are required to pay 6.2 percent of your income for Social Security. But if you leave your employer to start your own business, you have to pay both the employer's and the employee's portions, bumping the tax up to 12.4 percent. This is a huge disincentive for many people who might otherwise consider striking out on their own. Government should give self-employed people the option of paying only 6.2 percent, commensurate with a corresponding reduction in benefits in their retirement years.

And second, don't discriminate against small business owners and self-employed people on health insurance. An employer can deduct the expense of the health insurance he or she provides employees, but the business owner cannot deduct the portion of the expense used to purchase insurance for him/her self and family. In other words, the cost of the business owner's health insurance has to be included in the business owner's income for tax purposes. Employees get health benefits without paying taxes on them but if you own a business, that health insurance counts as compensation and is taxed just like a paycheck. Health insurance already is a huge stumbling block for would-be entrepreneurs. It is pretty tough to go from a company-provided health insurance plan to one that you have to fund completely on your own.

Small businesses provide a large portion of the jobs in this country, as well as a lot of the innovation. Lawmakers should do all they can to encourage people along entrepreneurial paths.