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The Daily Reckoning | Monday, December 31, 2012 Somewhere between “Morning in America” and grisly, gnarled wreckage, A kinder, gentler assessment of the Fiscal Cliff... Plus, Chris Mayer and Joel Bowman return with some insightful on the importance of small government and challenging the Sate... ------------------------------------------------------ The Fiscal Cliff’s Big, Angrier Brother Is On His Way... Have you protected yourself from the coming “X Date”? It’s an event that has little to nothing to do with the fiscal cliff. Yet, it’s a date that could send the American way of life — and your personal finances — into a tailspin. And according to this presentation, we don’t have much time... Inside you’ll learn all the details behind this event... when to expect the debates in D.C. to begin... and, most importantly, how to make as much as three times your wealth as the event plays out. The presentation is free to watch. But for reasons you’ll see, it disappears from the web when the clock strikes midnight tonight. See it while you still can, right here. Quotes of the Day... “I hope we once again have reminded people that man is not free unless government is limited. There’s a clear cause and effect here that is as neat and predictable as a law of physics: As government expands, liberty contracts.” — Ronald Reagan Eric Fry, popping corks in Laguna Beach, California... Happy New Year, Fellow Reckoners! Another fascinating year is drawing to a close...and clearing the stage for the next 365 days. What will lucky number 2013 bring? A Reagan-esque “Morning Again in America,” perhaps? Or maybe the grisly, gnarled wreckage of an economy that plummets over a fiscal cliff? Or maybe something in between? Your editors have no idea, of course. But we do have one confident prediction for the year ahead: the bull market in state-sponsored terrorism will continue — not the kind that straps explosives onto a fanatical teenager and sends him into a crowded Iraqi marketplace to detonate himself into the laps of celestial virgins; the kind that straps fear-mongering catchphrases onto self-serving politicians and sends them into the public eye to terrify Americans into begging for “more government.” “Fiscal Cliff” is just such a catchphrase. It is terrifying...and to the extent that it incites fear — bordering on hysteria — it promotes a subconscious desire for “more government.” Without more government, according to the Fiscal Cliff fear-mongers, the economy will implode upon itself like a black hole. Pretty scary stuff. But here’s an alternative perspective — a kinder, gentler assessment of the dreaded Fiscal Cliff. It may not be a national disaster; it may simply be a good start, you know, just like that old lawyer joke: What do you call 1,000 lawyers at the bottom of the ocean? A good start. The Fiscal Cliff does not guarantee a recession; it does not guarantee a crisis; it only guarantees one thing: smaller government. The Republican Party used to call that “success”...and so did Aristotle, Henry David Thoreau, H.L. Mencken, Murray Rothbard...and more recently, our own Chris Mayer and Joel Bowman. Earlier this year, in two very memorable editions of The Daily Reckoning, Chris and Joel — each in his own way — highlighted the virtues of a government that becomes smaller. “As for me,” Chris wrote last September, “I always liked Henry David Thoreau’s opening salvo in his essay ‘Civil Disobedience’: I heartily accept the motto, — ‘That government is best which governs least.’ “I think he is right,” Chris continued. “H.L. Mencken had a similar view. I reach for my copy of A Mencken Chrestomathy — under the section ‘Government’ — and find this passage highlighted: The ideal government of all reflective men, from Aristotle onward, is one which lets the individual alone — one which barely escapes being no government at all. “While I have no love of government,” Chris concluded, “I do love America...I love several of its cultural attachments — such as barbeque and blue crabs, blues and jazz, poker, American sports like football and baseball and American beers — to name just a smattering... But in the land of politics, I am the standing opposition. Whoever is in power, I’m against him.” A few months earlier, Joel Bowman took up a similar theme. “Some people can’t just leave well enough alone,” Joel observed. “Whether or not that something is the right thing is, to their mind, beside the point. Just so long as it’s not nothing...That’s the real problem with Statism, Fellow Reckoner. All its various machinations are, in one way or another, inherently prescriptive. You try to mind your own business. You try to live a quiet and decent life...but there’s always someone telling you there’s a better way: Their way. Oh, and they’ll be needing your money and/or person to make it happen.” So please enjoy today’s “Best of” edition of The Daily Reckoning, while waiting to pop champagne corks to the coming Fiscal Cliff! Do you have any of these coins in your pocket? If you find any of these coins floating around, you may want to begin saving them... In short, we’ve just uncovered what could be the safest (and easiest) investment idea we’ve ever found. And it’s been hiding in our pockets the whole time. What coin is it? And why should you begin hoarding them now? Click here to find out. The Daily Reckoning Presents Politics, Politics By Chris Mayer [This article originally appeared in the Daily Reckoning on Tuesday, September 4, 2012] (Warning: The following covers political topics that you may choose to skip.) Canadians seem very interested in the US election, more so than my jaded American friends. Many Canadians I met wanted to talk about it. One Canadian told me: “Canada is like a mouse sleeping next to an elephant. We keep one eye open so we can scramble if the elephant decides to roll over. The elephant doesn’t notice when it rolls over, and it has no need to take heed of the mouse, either.” I had one meeting where a young analyst went on in mocking tones about how Americans don’t like to pay taxes. As a docile and subservient Canadian, this struck him as silly. He sang the praises of government safety nets and public works, etc. He then started to get into US history. Now, I don’t like to cross swords with people on politics anymore. Still, there is only so much an American abroad can take of having his country’s revolutionary and individualist history misrepresented as an Obama-esque government-built-it fantasy — especially from a seemingly smug Canadian. When he started talking about Hoover Dam and the Tennessee Valley Authority as great examples of the value of public works, I had to unsheathe the cutlass. One analytical tool that I find very humbling is the idea of alternative histories. As Nassim Nicholas Taleb puts it in Fooled by Randomness: “One cannot judge a performance in any given field (war, politics, medicine, investments) by the results, but by the costs of the alternative (i.e., if history played out in a different way). Such substitute courses of events are called alternative histories.” In essence, you can’t just look at the US Highway System and say, “Gee, look at that great thing and all that it’s done.” You have to consider the cost of the alternatives. What might have been done if the US government left that money in the hands of those who earned it? Who knows what alternatives may have been pursued? Perhaps the private sector would have created a more-efficient rail system. Perhaps the US would have considerable less reliance on oil. Who knows the compounding effects of this alternative history? As Taleb writes, alternative histories are not observable. We cannot turn back the clock and play the movie again to see what might happen. We can only imagine and guess. Still, I think it is humbling. Keeping this idea of alternative histories in mind is at least a way to get the busy world-improver to stop and reconsider his confidence. There is so much we can’t know. Anyway, there was a brief clash of swords as we debated this and that. No blood was shed. In truth, my heart was not in it. Political beliefs are a lot like religious beliefs. When you encounter someone who wants to tell you what a great thing government is and how we should all be thankful for it, you can’t hope to change his mind. He believes what he believes. You can only sit there and think of palm trees and rum drinks and wait it out, or change the subject. As for me, I should declare my own bias. I always liked Henry David Thoreau’s opening salvo in his essay “Civil Disobedience”: “I heartily accept the motto, — ‘That government is best which governs least;’ and I should like to see it acted up to more rapidly and systematically. Carried out, it finally amounts to this, which also I believe, — ‘That government is best which governs not at all;’ and when men are prepared for it, that will be the kind of government which they will have.” I think he is right. H.L. Mencken had a similar view. I reach for my copy of A Mencken Chrestomathy — under the section “Government” — and find this passage highlighted: “The ideal government of all reflective men, from Aristotle onward, is one which lets the individual alone — one which barely escapes being no government at all. This ideal, I believe, will be realized in the world 20 or 30 centuries after I have passed from these scenes and taken up my public duties in hell.” He wrote that in 1919, so we have a while to wait yet. (There are many more eloquent writers taking such stands, like Albert Jay Nock and Murray Rothbard.) While I have no love of government, I do love America. I love its history. I love the great big mass of land it inhabits. I love several of its cultural attachments — such as barbeque and blue crabs, blues and jazz, poker, American sports like football and baseball and American beers — to name just a smattering. I enjoy the company of many fellow Americans. But in the land of politics, I am the standing opposition. Whoever is in power, I’m against him. OK, no more politics....Thanks for reading! Regards, Chris Mayer, for The Daily Reckoning Grab Your Share Of Big Oil’s Paycheck... Pictured below is a map many Americans have never seen. That’s a shame, because today it holds one of the best profit opportunities the market has to offer. Big oil knows this map well — heck, it’s one of the reasons they always seem to turn a profit! Today, thanks to a little-known loophole, you could start grabbing your share. Click the map to find out how... The Daily Reckoning Presents No Consent Required: How the State Exploits Ignorance and Complacency By Joel Bowman [This article originally appeared in the Daily Reckoning on Thursday, June 28, 2012] “Libertarianism: The radical notion that other people are not your property.” We don’t know who first said those words. But we’ve seen the bitty meme circulating the social media sites recently. Could people finally be catching on? Probably only the “radicals”... But it sounds simple enough, doesn’t it? A kind of “do unto others...but not without their permission.” Of course, there are other ways to express this basic idea too: live and let live...to each his own and his own to each...and our personal favorite, mind your own [insert expletive of choice here] business... Alas, some people can’t just leave well enough alone. They feel the need, the compulsion, the “hand of history,” as Tony Blair once called it, to “do something.” Whether or not that something is the right thing is, to their mind, beside the point. Just so long as it’s not nothing... That’s the real problem with statism, Fellow Reckoner. All its various machinations are, in one way or another, inherently prescriptive. You try to mind your own business. You try to live a quiet and decent life...but there’s always someone telling you there’s a better way: their way. Oh, and they’ll be needing your money and/or person to make it happen. But how can anyone possibly claim the right to tell you how to live your life... and to force you to do it?! Seems a tough point to win, no? What about self-ownership? What about the non-aggression principle? What about “live and let live” and all that? Jean-Jacques Rousseau thought he found a workaround: The “Social Contract” he called it in his waffling 18th century treatise of the same name. In a nutshell, the social contract holds that, because we are considered part of “society,” we must therefore accept the terms — whatever they may be — of that “society.” In other words, it posits an implicit consent on the part of the individual to be governed by the state...simply because the state exists, and because the majority have so willed it. Call it “tyranny of the mob-jority.” But what kind of contract is this, Fellow Reckoner? A “contract” that makes up for lack of consent by simply presupposing it, is no contract at all. What kind of court would uphold such a flimsy non- agreement...besides one owned and operated by the beneficiaries of such an absurd ruling? Not that the enthusiastic Genevan is solely to blame. He was simply building on the misguided works of previous meddlers. Hobbes gave mens’ rights to the government. Locke gifted them to God (But which God? Interpreted by whom? And what for the agnostics?) Few left them in the hands of free men themselves. But what about man vs. nature, some may be wondering? What about...gulp!...anarchy! Hobbes argued that, without the state, men would descend into a tyranny all of their own making and that they need the state to “maintain order.” But is this really true? Are we simply to take Hobbes’ word for it, to give away our most precious freedoms because of an arrogant supposition? Is there any hope, in other words, for self-governing men and women? The state — along with its favored class of crony banksters, faux economists, prattling politicians, warmongers, tax attorneys, social parasites and the rest of their rotten ilk — has long feasted on the wealth and toil of the “free” and productive class. So long have they feasted, in fact, that they now control all the guns, all the courts and all the cages. But we needn’t “rage against the machine,” the preferred strategy for the young and the reckless. We simply need to actively withdraw the consent they claim. Writes Kevin Carson, contributing editor to the Center for a Stateless Society: The plutocracy depends on the state for its wealth. We don’t. All we have to do to destroy them is walk away. So they’d like nothing better than to distract us from building the kind of society and economy we want for ourselves and abandoning theirs to rot, and instead waste our effort and money fighting for control of their system on their terms. And how do we do that? With peer-to-peer technology — already flourishing in the areas of money lending (see DR article), property rental (see DR article), competing currencies (see DR article), startup fundraising, employment opportunities, micro-donations, court systems (see LFB article) and entertainment (see DR article)...to name just a few. We do this instead of supporting existing and entrenched corporations currently hiring the gun of the state to protect, by force, their own fattened interests in each of the aforementioned sectors. We do it, in other words, with cooperation instead of coercion. With ideas instead of edicts. With voluntarism instead of statism. Continues Carson: As they find it harder and harder to compete with progressively cheaper and more efficient technologies in the hands of ordinary people, they lean increasingly on a state that’s bankrupting itself trying to prop them up. So we can beat them simply by withdrawing from their system and building our own. Peel back the layers of any statist argument and you will quickly discover, at its cold dark heart, the notion that you do not own your self. You are, to some degree, the property of another. As such, you are to be ruled, governed and taxed in whichever way the owner deems to be “in the interest of society.” It’s enough to make the questioning individual cry... or laugh... or both. Either way, their message is clear: Free men are not to be trusted with their own lives. It’s time to tell these people to mind their own [insert expletive of choice here] business. Regards, Joel Bowman for The Daily Reckoning ------------------------------------------------------- Here at The Daily Reckoning, we value your questions and comments. 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