PARIS – Why does no one challenge the Deep State?
In this era of business-suit machismo, why does no presidential candidate propose kicking the biggest, softest butts – the ones that most need kicking?
We imagine the stump speech:
Wars? Okay with me… but not if you can’t win ‘em.
We paid $1 trillion to the people who were supposed to be fighting the War on Drugs. It hasn’t worked. Drugs are as plentiful and as easy to buy today as when the war began back in 1970.
I would say to the people responsible: “You’re fired! And give us back our money.”
We paid more than $1.6 trillion to fight terrorism and more than $2 trillion for the war in Iraq. Our boys may have done a good job out in the field, but the brass has totally failed.
When the war began we faced only a few hundred fanatics. You could have put them all on a luxury cruise ship… and never brought them back. Now, there are hundreds of thousands… maybe millions… of terrorists – some right here in the U.S.
Our leaders told us that drones, boots on the ground, and bombing would lead to peace and stability. Instead, they’ve done the opposite.
My message to the strategists, generals, and war profiteers: You’re all fired!
And how many times have we heard from politicians that we need to “help our hardworking families”?
That is supposedly why, since 2009, we have transferred $10 trillion or more to Wall Street to fight this war on the business cycle. The money was supposed to “trickle down.” Well, it didn’t. It stayed with the richest people in the country.
My message to the PhDs behind this program: “Go back to school. You’re fired.”
And get this… we’ve spent $22 trillion on the War on Poverty since 1964. We had 10% below the poverty line then. Guess how many are below the poverty line today? 10%. It was almost as if they didn’t want to win. I’d fire the bureaucrats responsible for it.
And all you Deep State lobbyists, hacks, hangers on, chiselers, zombies, cronies, and connivers: You’re all fired, too.
We’re taking back the U.S. government!
Here’s a story from the Financial Times…
America’s middle class has shrunk to just half the population for the first time in at least four decades, as the forces of technological change and globalization drive a wedge between the winners and losers in a splintering U.S. society.
The ranks of the middle class are now narrowly outnumbered by those in lower and upper income strata combined for the first time since at least the early 1970s.
Typically, the FT got the facts right but missed the point. Technological change? Globalization? No one’s fault?
Who provided U.S. tech companies and Chinese manufacturers with almost unlimited cheap funding?
Who cheated middle-class savers with zero interest rates? Who gummed up the U.S. economy with thousands of rules, regulations, and red tape – making it hard to start a new business?
Whose cheap money financialized the economy, shrinking the high-wage manufacturing sector while favoring low-wage service industries?
Who really squeezed the middle class? Mexicans? Muslims? Or Deep State cronies?
But wait… take a deep breath. It’s Friday. We take it easy on Friday.
Besides, who do we think we are?
We’re observers, not fixers. And what we observe is that no candidate – except Ron Paul, who never posed a serious threat – has ever challenged the Deep State.
And since it is Friday, we reach into the archives… for a missive from Nicaragua, where we’ll soon be headed to join a small group from our family wealth advisory, Bonner & Partners Family Office. (Members can still secure a place at the upcoming event here.)
“The Sandinistas did some good things and some very bad things,” said Antonio.
We were racing along dirt roads near the Pacific coast. Antonio – a boss in this part of Nicaragua – was pointing out the big ranches that the Sandinistas had confiscated.
Now, landowners are getting their property back – or compensation. But it is a long, hard process. The land may have been sold several times since the early 1980s. It will take years to sort out the mess in the land registry records.
“People come down here and they think they can do a title search like they do in America,” he continued. “But it isn’t that easy. You have to ask around. Some of the title claims are not recorded. You have to know who owned the property and how they got it.”
Americans would be considerably richer if they didn’t give up so much of their income to the government.
“But one of the good things the Communists did was to make people appreciate a good boss,” he continued.
Longtime readers are familiar with the winding roads we sometimes take. But it is a rare road that doesn’t lead somewhere. Not always where we intended to go… but often where we should have been.
Antonio employs hundreds of local men and women – building roads, building houses, tending cattle, cooking breakfast, doing laundry. He has teams of workers with machetes who cut the tall grass in the rainy season.
“Wouldn’t it be better to use a tractor with a bush hog?” I ask.
“Well, maybe, but this way gives people work,” comes the reply.
“At least you could give them scythes, so they didn’t have to bend over so much,” I suggest.
“What’s a scythe?”
Antonio’s family once owned 100,000 acres of cattle land in southwest Nicaragua. Now, he spends a good deal of his time trying to get the land back.
It is a tropical paradise along the Pacific coast. But nature rarely gives something without taking something away. Tidal waves, earthquakes, and volcanic eruptions have all left their mark.
In 1972, an earthquake leveled the capital, Managua. It killed more than 6,000 people, injured another 20,000, and left another 250,000 homeless. The nearby town of Masaya was also hit – it has many houses with collapsed roofs and walls still waiting to be repaired a decade later.
And in the early 1990s, a tidal wave swept away Antonio’s grandfather’s house – located just a few feet from our lodge.
There are also dangerous bugs. My wife is a healthy woman. But when I found her unconscious on the bathroom floor, with her eyes rolled back in her head and foam coming out of her mouth, I knew that something about Nicaragua did not agree with her.
(Dr. Rosales from nearby Rivas gave her a shot and some pills and she was soon as good as new. After Elizabeth recovered, we spent our days in idyllic bliss. We walked along the beach in the morning… and then took an early swim. In the heat of the day, we read and studied Spanish. In the evening, we went horseback riding and took another swim in the warm ocean surf. There was little else to do, but we were happy doing little else.)
Antonio drove his pickup down the narrow dirt road as though he were trying to outrun a tornado.
Storms of dust followed us, choking the poor campesinos walking along the roadside… and covering the schoolchildren in their bright white and blue uniforms.
He rarely slowed – for cows, chickens… or even humans. Instead, he just tooted his horn and counted on the survival instinct of his fellow mammals to keep them out of his way.
Gradually, Antonio is cleansing the gene pool of animals with slow reflexes. “One time, when I was in a big hurry to get to Rivas,” he explained, “I hit five chickens along the way.”
“You know, another good thing the Sandinistas did? They made people poor. Rich people can afford to be Communists. But people in Nicaragua began to see themselves getting poorer and poorer as their relatives in Miami and Costa Rica were getting richer.
“People don’t mind being poor, as long as everyone else is poor. But when other people are getting rich, they don’t like it…”
Antonio is helping to answer one of the most puzzling questions of our time: Why has the level of government spending continued to rise in the U.S.?
Government is an economic deadweight. It is a cost… a net consumer of capital… a black hole into which wealth disappears.
Typically, ceteris paribus, the more government, the poorer people are. That is why “the government that governs least governs best.”
Since the fall of the Berlin Wall, there has been less need for defense spending in the U.S. And with the full-employment economic boom of the 1980s and 1990s, there is less need for social spending.
But taxes and government spending continue to rise. Why?
Antonio is right: Americans would be considerably richer if they didn’t give up so much of their income to government.
But it is not absolute wealth that matters; it is relative wealth.
We drove through a small village. Looking into the houses through open doorways, I could see the simplicity and poverty in which many of the people of Nicaragua live.
Their houses often scarcely have walls – just rude boards nailed onto posts. Nor do they have much furniture – little more than a hammock and a rocking chair.
But what do they need?
They have a tin roof over their heads… and chickens and pigs running around the yard. Occasionally, there is fish, too, taken right out of the ocean with a simple hook and line.
They don’t even need fishing rods; the hooks are swung around and tossed into the sea, with the line wrapped around a short board as it is trolled in.
Some kind of festival was under way in the village. Several men were mounted on horseback, with a few dozen cheerful onlookers standing by the road. In the middle of the road, overhead, a chicken was tied to a rope stretched between two trees.
“They are playing a game,” Antonio explained. “The idea is to see who can grab the chicken’s head and tear it off. It’s hard to do.”
“Is the chicken alive?” I asked, wondering what the SPCA might think.
“Well, not for long.”
The sight of the happy, well-fed villagers enjoying their sport reminds us how little we really need to be happy. Just food, clothing, shelter. And a chicken that is smart enough to escape Antonio’s truck.
Everything else is vanity – little more than an attempt to feel that we are better than others (or at least to avoid allowing other people to feel superior to us).
There are a lot of ways to feel superior, but today we gauge our superiority in dollars and sense.
Nicaraguans can’t afford more government, because they are poorer than their neighbors. But Americans are rolling in credit (which they confuse with real money). And they don’t mind giving up some of it to leaders who promise to tie up their enemies… and wrench their necks off.
Further Reading: As Bill warns, America’s addiction to credit will end badly. In fact, what he calls the “Great American Credit Collapse” looms closer every day. And the cronies and zombies in Washington and on Wall Street are only making it worse.
Bill has taken the unusual step to put together a presentation detailing all his research. It details how the final credit catastrophe will unfold… how it’ll change your life forever… and the steps you can take now to prepare. Access it here.
Revenues and profits are sagging at U.S. businesses.
One sector that’s bucking the trend is technology.
Today’s chart looks at the projected annual revenue growth for five of the largest U.S. tech companies by market cap and for the S&P 500.
As you can see, S&P 500 revenues are expected to shrink in the 12 months to March 2016. But revenues at all five “Big Tech” firms are expected to grow. And three of them – Google, now Alphabet, (NASDAQ:GOOG), Amazon (NASDAQ:AMZN), and Facebook (NASDAQ:FB) – are expect to grow revenues at over 15% during the same period.
This won’t come as a surprise to subscribers of tech expert Jeff Brown’s new advisory, Exponential Tech Investor.
As Jeff put pointed out during his recent webinar on how to profit from the next wave of revolutionary breakthroughs in technology… the growth in the tech sector is explosive right now.
Consider the amount of time it takes to get to a $1 billion valuation. If you think back over the last three decades, your typical Fortune 500 company would take 20 years to get to a $1 billion valuation.
Facebook was able to do it in about five years. Uber did it in two and a half, and a company called Slack – some of you may have heard of or used its workplace productivity software platform – did it in eight months.
What’s extraordinary about this is these aren’t artificial valuations. These are real companies with real products that have been deployed and are used by millions of customers. And they’re making money.
If you missed Jeff’s webinar, don’t worry. He’s put together a special investor presentation on this fast-growing sector. In it, he reveals his top eight ideas for technology profits today. Watch it here now.
Here’s John D. Rockefeller’s Wealth-Building Secret
Most people don’t know it, but even after the government forced the breakup of Standard Oil, Rockefeller continued to get richer. And many people today are still using his secret to build fortunes of their own.
The U.S. Stock Market Is a Lot Less Healthy Than It Looks
There are more than 6,000 stocks trading in the U.S. But you typically hear about only the 500 stocks in the S&P 500 or the 30 stocks in the Dow. And of those 6,000 stocks, more and more are hitting new lows – a bearish signal.
How to Count the People the Police Kill
Last year, 14,249 Americans were murdered, according to federal crime statistics. And 51 police officers were killed in the line of duty. But there are no official statistics on how many people the police killed… until now.
In today’s extended edition of mailbag… support for Bill, after yet another wave of Diary cancellations by offended subscribers.
Tough duty waiting on Trump to call while imbibing at your Paris bistro… and having to cringe at reading the comments from the mailbaggers you have irritated.
Keep practicing your voodoo, please. There are few opportunities to smile these days. And you provide an important daily dose.– Dave E
Your recent mailbag fare is too much fun! I’m beginning to enjoy it even more than your daily missives.– Dennis T.
I very much enjoy Bill’s observations (whether I agree with all of them or not) and feel they enrich both my intelligence and life views. Your cancellation is your loss.– Art P.
Why take such a thin-skinned, dogmatic posture and throw one’s candy in the sand over ANY alternative view? Isn’t that a form of “thought fascism”?
I leave your two days of writings with both greater appreciation and fear of the man. Thanks you for pushing we the readers into levels of consideration we never would have reached on our own.– David S.
I for one am not mad at you over Trump. I also am glad he is not part of the establishment. Don’t know who I will vote for, but I do enjoy your newsletters.– Sylvia H.
You pegged it: “The appeal of Trump and Le Pen is not what they are, but what they are not.”
And yes, some of us do know the game is rigged. The politicians and the monetarists versus we the people. It’s like being down thee goals with two minutes to play – even the referees have packed up and gone home. I doubt there’s a great deal any one person or government can do.– Michael W.
I really enjoy, and appreciate, your writings. Too bad some folks seem to feel that a firm decision HAS TO be made right now one way or the other on Trump… and that everybody MUST BE for or against him.
I read your musings as being somewhat tongue in cheek… but with the caveat that it may just be so after all. An approach that makes for entertaining reading and food for thought. Keep up the good work.– Dan E.
Bill, you are my favorite philosopher/commentator. Actual voting is just another census or pseudo-dialectic tool for information or manipulation only.
What if “they” held an election and nobody voted?– Vincent C.
It’s hard to believe people can get so worked up over Bill’s obviously flippant writing. The guy is a master of humorous writing and it never ceases to amaze me how people get so worked up over what are just light-hearted, clever, humorous observations. You wonder what sort of lives these people have.
Don’t stop writing, Bill. Reading you is the best part of the day!– John B.
I love your wit, but even more your willingness to ignore the torpedoes and hold your course. How could anyone assume your piece on Trump was in support of him?– Mike L.
Has sarcasm been banned? Do people not have a sense of humor for the absurd? “Me thinks they do protest too much!”– Peter F.
I think your comments on Trump are brilliant.I especially like the slogan suggestion: “Too rich to steal and too dumb to lie.” (But not too dumb to say outlandish, politically incorrect things that keep him in the spotlight!) And your perfect summation: “Trump’s appeal is not what he is, but what he is not.”
Right on, Bonner. This is what keeps me reading your editorials.– David B.
I always look forward to Bill’s Diary. No, I don’t always agree with him, but he certainly makes one think.
On Trump, I didn’t see an endorsement of him or a disagreement with him. I think some people just can’t see truth for what it is.– Joe F.
I thoroughly enjoy your sarcastic commentaries and hope you keep them coming.
A good laugh is still the best medicine, particularly in these grey days of pending chaos and dispute. It is unfortunate that, apparently, a lot of you subscribers just can’t appreciate your style.
I live in Bavaria and find it refreshing, invigorating and something to look forward to each day.– William C.
AWESOME. I love you, man. Keep up the good work. One of the best parts of my day is to read your newsletter. Wishing you and your family all the best this holiday season.– Colin L.
Apparently, irony is dead.– Don D.
We recently held an urgent roundtable meeting to discuss the massive wave of tech innovation that’s about to change everything in our lives.
It’s going to be a very exciting… and very scary… time to be alive.
That’s why industry expert and Exponential Tech Investor editor Jeff Brown outlined the basic steps you need to take to stay personally and financially secure… and how you can profit from the coming shift.
If you are in or near retirement, Jeff’s research could make a huge difference to your life.