 | | The Daily Reckoning | Friday, December 16, 2011 |
- How to lead a “suckier” life...
- Which presidential candidate will most aptly give America what it needs?
- Plus, Bill Bonner on the likelihood of gold testing to the upside, the usefulness of a depression, and more...
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|  | | | | The Real World Applicability of Politicians | | Living Life Freely and Away from “World Improvers” | | |  | | Joel Bowman | Reporting from Rancho Santana, Nicaragua...
“This is what we get for trying to help people learn to be free.”
Your editor was wading through the soft, mid-afternoon caresses of the Pacific Ocean, just as the sun was beginning to hasten its retreat over the horizon. We’d only been in town a few minutes, but strict company policy prohibits us from doing any work before first taking a swim. And since we had a lot of work to do, we headed immediately to the beach.
“I’ve said it before on this trip,” Addison continued, motioning toward the paradisiacal surroundings behind us, “but let me just reiterate: this sucks.”
It may come as somewhat of a shock to our Fellow Reckoners, but Addison is quite correct in his assessment of Rancho Santana. It’s simply a matter of definitions. Indeed, life here does “suck”...in precisely the same way indefinite military detention without trial “rocks.” The postcard sunsets are “dog ugly” in much the same way John McCain, co-author of that despicable bill, is “smokin’ hot.” And the locals? Sheesh! They’re committed to making your stay absolutely unbearable...just as your politicians at home are committed to making your life enjoyable and your business profitable.
It occurred to us, while lazing about in the ocean, joking around with Addison and Chris Mayer, also down here for the Chill Weekend, that, according to these definitions, we ought to redouble our own efforts to try and live “suckier” lives.
How to do that? Clearly, we first need to distance ourselves from the “world improver” class. These are the people who are constantly reminding us that the current way of things is unacceptable...and that they need to fix it. Without their improving, their constant drive to liberate us from the horror of having to think for ourselves and to accept responsibility for our own actions, we’d be left in a real stink. So let’s do away with them.
Not that politicians don’t have some utility. It’s easy and amusing to poke fun at them, to chide them and harangue their idiotic decisions. And one can indulge this guilty pleasure in so very many ways.
It’s amusing, for example, to invent various forms of alternative employment for randomly chosen demagogues and sociopaths currently in the government's employ... tasks more befitting of their respective skill sets. One could, without too much difficulty, imagine Secretary of State Hillary Clinton selling fridge magnets from a tin tray at a busy intersection on a hot, midsummer’s afternoon. Picture for a moment the scuffed Ferragamos underfoot, the grey, late ’90s-cut pants suit, mottled with perspiration in all the most unflattering areas, the usually well-coiffed mop frantically frizzing in the humidity, mascara running like Rocky the Raccoon and a thin layer of smog and car soot blowing over those deeply entrenched frown lines, augmenting the lifeless facial landscape like shifting sands across some barren desert.
Fun, eh?
But so what? Beyond a moment’s entertainment, the time and effort spent conjuring such a frightful image is hardly worth the reward. And besides, when you do inevitably stir from your fitful daydream, you’re left with the cold, gut-punch reality that this woman is not offering anything of even moderate use, nor is she putting her considerable (stolen) wealth and (coerced) power behind anything of marketable value. Instead, she is busy waging an “information war” on your behalf, furnishing would-be enemies around the globe with exactly the kind of motivation their own warped doctrines require to justify the pursuit of violence against citizens who happen to hold a US passport.
That’s the reality. And no matter how much you might wish to alter it, the fix, as Bill says, is already in. Beyond moderately amusing imagery, politicians have little real world use. Our Reckoner-in- Chief has more on just that in today’s essay, below...
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| | The Daily Reckoning Presents | | Man for All Seasons | | In which The Daily Reckoning picks a candidate | | |  | | Bill Bonner | The Daily Reckoning has no voice in the US presidential elections. But we will nevertheless declare a preference. Were he to toss his hat in the ring, we would line up behind former Senator Jon Corzine. The ex-Goldman chief has the experience that America needs. He has been a front-runner in politics...and in the world of finance, what he doesn’t know about front running is probably not worth knowing. Presuming, however, that Corzine will be too busy fending off lawsuits or jail sentences, our next choice is Republican Newt Gingrich. Of course, we find him completely repulsive, who wouldn’t? But we believe he’s the man of the hour. History needs him, to carry on the work of Bush and Obama, hustling the great nation on its way to Hell.
It is rare for a decent man to seek public office. He is ashamed of pandering. He is embarrassed by the stupidity of his own slogans. He is appalled by the low-lifes and quasi criminals with whom he must associate and from whom he must beg support.
They are all swarming around Newt Gingrich now. The handlers, pollsters, word polishers, idea chiselers, fund raisers, donors, hangers on, groupies, roadies — carpet-bagging rascals every one of them. Now they’ve got the scent in their nostrils. Their chests heave. The hearts pump. If they can just keep their man Newt from blowing himself up they’ll be in high cotton for at least 4 years. One will head a commission or a cushy seat at the UN. Another will get a contract to provide the pentagon with new ID badges. Another will ride into a remote Congressional seat on Newt’s coattails. Power. Money. If Newt wins, they win. Newt’s women will think themselves smarter and prettier. The men among them will feel their most private part growing bigger.
American presidential candidates generally fall into three categories. Those who are obviously incompetent. Those who are scalawags. And those who are jackasses. The job of the voters is to choose the defect most suited to the time.
Winston Churchill was a disaster as First Lord of the Admiralty during WWI; the Gallipoli campaign was his doing. Then, on how to deal with the Iraqi insurgents, circa 1920, he offered this advice: Use chemical weapons “against recalcitrant Arabs as an experiment,” he suggested, adding, “I am strongly in favour of using poisoned gas against uncivilised tribes to spread a lively terror.” Later, as Chancellor of the Exchequer, he put Britain back on the gold standard, but at a level that was bound to cause trouble. It came, in 1929.
He may have been incompetent. He may have been a big-mouth imperialist. But Churchill was the man Britain needed in 1940.
When times are good, the public generally prefers a scalawag. Clinton was the perfect president for the ’90s boom years. Warren Harding would have been a great fit with the boom of the ’20s. He drank. He played cards. He snuck out of the White House to go to girlie shows. Otherwise, he left people alone. But he was a little early. Most of the “Roaring Twenties” boom happened during the Coolidge administration. On the surface, Coolidge was a mismatch. Straitlaced. A bit of a scold. But he minded his own business and — like Clinton during the dotcom bubble or Bush during the property bubble — he let speculators ruin themselves without raising an objection.
The trouble with Herbert Hoover was that he was too much of a nuts and bolts engineer. The public turned him out. They preferred Roosevelt’s confident malarkey. They wanted a man with a plan. No matter that the plan was claptrap. They’d never figure that out.
That’s the problem with Obama. He has no plan. He doesn’t know what is going on, or what to do about it. Which at least marks him as more intelligent than most of his challengers, who have the wrong idea on both counts. But neither brains nor competence is what the public wants now. In an emergency it wants Churchill, not Chamberlain. A Roosevelt, not a Hoover. It wants a bold liar. A hearty delusional.
Gingrich is their man. A letter in The Financial Times compared him to Churchill. He compares himself to de Gaulle. Both are correct, in our view. He is as humble as de Gaulle and at least as competent as Churchill. He is a cad who reportedly told his second wife that she was too old and too ugly to be a president’s wife. He is a scoundrel who took $1.8 million from zombie mortgage lender, Freddie Mac. He makes angels weep; the gods get their backs up. So cometh Newt Gingrich to the Republican race. If you’re dumb enough, you think he’s smart. If you’re corrupt enough, you think he is honest. If you compare him to the field of candidates, he doesn’t seem any more asinine than the rest.
He is incompetent, scalawag and jackass all in one package. A man for all seasons. Most importantly, he is committed to keeping America on course to its own destruction. The US already runs the biggest deficits in the developed world. Gingrich would add to them — by about $850 billion, according to one estimate. He hopes Reagan- era growth will eventually balance the books. He also thinks an Electro-Magnetic Pulse is one of the biggest dangers America faces. And he believes in American exceptionalism — as if the nation can dodge fate with some special math that applies to it alone. But if you begin asking questions about Newt’s pensee you are missing the point. America’s empire is decadent and degenerate. It needs a man like Newt to help it on its way... to where all exceptional empires end up — on the scrap heap of history.
Regards,
Bill Bonner
for The Daily Reckoning
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| | | | | | And now back to Bill, with the rest of today's reckoning... | | More Upside for Gold as Government Spending Continues Unabated | | | Have yourself a merry little depression.
Dow up 45 points. Gold down $9.
We’re still waiting for a major correction in the gold market. Each time one begins, it seems to run out of steam before doing any real damage. At yesterday’s closing price, $1,577, gold is still solidly ahead for the year.
So, where’s the soft spot? Where’s the test? Where will it come from? When?
Don’t worry, dear reader, Mr. Market will test us. He’ll throw his curve ball. We have to be ready.
What if...
..instead of testing us on the downside, he tests us on the upside? This is not a prediction. Just a thought. What if gold suddenly shot up...and looked like it was going to the moon. What would we do?
Citigroup’s metals expert puts a $3,400 price on gold “in the next year or two.”
Jim Rogers makes a similar forecast.
What if they’re right? We only mention it because The Trickster has more than one trick up his sleeve. And he’s perfectly capable of running the price up to $3,500 BEFORE testing us.
We could get giddy, watching the price of gold hit record after record. And then, just when we think it is ready to scale its final peak, gold could turn tail and run for the valley. We wouldn’t believe it. We would hold on. We would wait for it to go back up.
And then...wouldn’t we feel stupid, if we’d taken that ride all the way to over $3,000...and then rode it all the way back to today’s level? Wouldn’t we be put out with ourselves, if we sold out then...thinking gold had put in its final top and we missed it?
According to the 50% principle...it could hit $3,000...collapse to barely $1,500...and then soar again...possibly going to $5,000...or even $10,000. That’s what we’ll get in the final ‘crack up’ boom that is coming.
Who knows?
But what we see is more upside than downside for gold. Because the motor pulling gold up still has a lot of gas in the tank.
In the US the feds spend $1.60 for every dollar they raise in taxes. In Europe, the euro-feds prepare to bail out their banks and sovereign debtors.
And guess how much the feds have already spent? They were so desperate to avoid a debt crisis...or a depression...that they threw the throttle wide open on the biggest rescue effort the world has ever seen. Bloomberg calculated that $7.7 trillion were put to work. Our estimate was higher — about $10 trillion, we guessed.
Well...we were both way off. Here’s the news report:
As part of the Ford Foundation project “A Research and Policy Dialogue Project on Improving Governance of the Government Safety Net in Financial Crisis,” Nicola Matthews and James Felkerson have undertaken an examination of the data on the Fed’s bailout of the financial system — the most comprehensive investigation of the raw data to date.
The extraordinary scope and magnitude of the recent financial crisis of 2007-09 required an extraordinary response by the Fed in the fulfillment of its lender-of-last-resort function.
The bottom line: a Federal Reserve bailout commitment in excess of $29 trillion. Whoa! The feds put at risk an amount equal to 200% of US GDP. And for what? So that a depression wouldn’t knock 5% off GDP? Even the Great Depression of the ’30s only set the US back by 30% of GDP. A similar setback today would cost the economy less than $5 trillion.
Do you see what we see? Even if it worked — which it didn’t — the feds’ efforts would have been a disaster. Who would spend $29 trillion to save $5 trillion?
But wait. There’s more. This assumes that a depression is unnecessary...or that it doesn’t do any good. We know that’s not true. A depression does a lot of good. It wipes out bad investments and eliminates bad speculators. It forces capital into more productive, more profitable uses. It kills off zombie industries. It retires worn-out industries...and reduces costs so that new industries can arise. It’s the ‘destruction’ that Schumpeter’s ‘creative destruction’ needs.
The more we think about it, the more we’re beginning to like depressions. After scammy bailouts and bogus recoveries, a depression would be something to look forward to.
And more thoughts...
“People die in different ways,” said our friend. “Some die well. Some die badly.”
We had just related the story of an aunt whose funeral we attended a few weeks ago. She had been given last rites. She fell asleep. When she awoke she seemed disappointed.
“What...am I still alive?”
“Well, she had the right attitude,” our friend continued. “So many of my friends and family have died in the last few years I’ve become almost a connoisseur of death. There are good ways to die. And not- so-good ways.
“Most people accept it. But not all. A friend I was with a couple weeks ago fought it every step of the way. And it made her mean. It was as if she thought it was our fault she was dying.
“She was disturbed by the whole thing. So, we tried to get her to come to terms with it. We told her that it was okay... We told her that it was okay to die. But she acted as if that meant we wanted her to die. Her last words were ‘what are you trying to do?’
“And you remember Paul? He thought it wasn’t fair. He couldn’t figure out why he was dying. He wasn’t a smoker. And he was dying of lung cancer. He thought there had to be a reason. And he couldn’t figure out the reason. It bothered him until the day he died.
“But now Randy [our friend’s ex-husband] is dying. He’s in intensive care. The doctors are amazed. They’re not trying to prevent him from dying; they’re trying to figure out how come he’s still alive. He’s had so many heart operations, it’s amazing that there is anything left of it. He’s got so many pig valves you expect him to oink. He’s had a lung removed too. And he’s got something else wrong with him...nobody seems to know what it is.
“And everybody thinks he’s indestructible. He’s been shot. Stabbed. Beaten up. But he’s fearless. I think he has a gene missing or something. You know, he ran away from home at 14. He lived in pool halls and bars. In the worst part of town. He hustled pool games. He smoked. He drank. Men always respected him, because he had no fear of anything. Women loved him.
“He would go into bars in the worst part of Washington. All black bars...rough places. Most white guys would be afraid to go into those places. But they called him the ‘white nigger.’ He was always at home in those places.
“And you know how handsome he was. He still is. But now, it’s over. He knows it’s over. He’s saying goodbye to everyone. And now he’s sorry about the way he lived. He told me, ‘I should never have let you divorce me...’
“And he’s right. But he didn’t give me any choice. I gave him 5 years to get off drugs. But he never did get off. And I didn’t want our child to grow up with a drug addict father. So, I had to divorce him. But I loved him anyway. And he knew it.
“And now, he’s dying...
“Funny how your life can take a turn...it could have turned out so much better for both of us if he had just given up the drugs. But he wouldn’t...and you never know when you’re at one of those turning points.”
Regards,
Bill Bonner
for The Daily Reckoning
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