POITOU, FRANCE – Autumn has finally imposed itself. The yellow and gold leaves drift down… morning fog rises… and the remains of the day grow cold. We now have a fire in the fireplace all day long.
A couple of oak trees had to come down. They were almost dead. And an old araucaria threatened to fall on our heads.
Rotted trees are cut down on Bill’s countryside estate
“When they get old, the worms get into them,” explained the man with the chainsaw in his hands.
“Then they weaken fast. And the wood isn’t any good. It’s better to cut them down before the worms eat them up.”
The weather may be cold, but the markets are hot.
The Dow is above 23,000 points – a new record. And according to yesterday’s press reports, the job market hasn’t been this “firm” since 1973.
Meanwhile, the Senate has just approved a $4 trillion budget. Reports The Washington Post:
[B]y agreeing to the massive tax cut, Senate Republicans have officially moved the party far away from its promised goal of ensuring the tax plan would not add to the deficit. The White House and House Republicans had vowed that the tax cuts would be offset with new revenue from the elimination of certain deductions, but that is no longer the GOP’s goal. Instead, they have abandoned long-standing party orthodoxy of deficit reduction and are seeking a political win after months of frustration on Capitol Hill.
Just as we predicted, the Swamp has won. Neither party now has any interest in draining it.
We’re executing a wide flanking movement, trying to round up as many “dots” as possible to get a fuller, more accurate view of what is really going on.
In particular, we’re trying to understand why the U.S. government doesn’t work the way it’s “s’posed” to.
The American system, with its “balance of powers” and its bicameral legislature, was designed for small, limited government. It was meant to be a nation of “laws, not of men.”
But laws must be simple. And understandable. Moses only had 10 of them. Jesus, in his Sermon on the Mount, reduced them to just two.
Today, in the United States of America, we have 10,000… or more. Who can write and remember so many? Not the legislature.
Members of Congress, representing their constituents’ interests, can only come to terms on simple things they can all understand – when to declare war, for example.
Or they could vote to give a war hero a pension or declare a national day of mourning if Kim Kardashian should suddenly die. Or they might agree to raise the tax rate from 10% to 11% to cover a national emergency.
Over time, though, the system becomes more complex. The worms burrow in. (Readers will recognize the phenomenon described by anthropologist and historian Joseph Tainter in his book, The Collapse of Complex Societies. As societies evolve, they add complexity. Complexity costs time, money, and resources. Eventually, the costs of complexity overwhelm the productive output of the society. It collapses.)
Gradually, insiders get more control and create special privileges and emoluments for themselves; it becomes impossible for the people’s representatives to keep up.
They can’t know what scams are buried in 10,000 pages of Obamacare regulations… or what juicy plums lie in the 70,000 pages of the U.S. tax code.
Typically, as the system degenerates, the legislature is reduced to a group of blathering, blustering, blithering idiots, while real power shifts to the technocrats… the insiders… the lobbyists… and the apparatchiks and nomenklatura of the administration.
The legislature passes sweeping, grandiose, open-ended laws – often without reading them. Deep State functionaries, who know where the juice is, fill in the details.
That is what just happened. The Senate passed a “budget.” No member of the Senate knows what the feds are going to do with $4 trillion… or even where they are going to get the money. Neither does the White House. The insiders will take care of it. And their number one goal will be to take care of themselves.
You can see how this operates at the “war powers” level, too.
Congress – and only Congress – is supposed to have the power to declare war. Instead, it passes general, feel-good legislation – such as the Patriot Act, the War Powers Act (originally intended to limit the president’s ability to act on his own), and various AUMFs (Authorization for Use of Military Force) – and leaves the military cronies free to meddle and blunder as is their wont.
Neither the public nor members of Congress knows what they are up to. Are we with Al-Qaeda against ISIS… or is it the other way around? Who knows?
When four U.S. Special Forces soldiers were ambushed in Niger, for example, the typical, and sensible, response is: “What were they doing in Niger?” Or: “Where is Niger… is that where Nigerians live?”
Thinking Americans tend to be disgusted. They see the contradictions, the delusions, and the double-dealing. They turn off the TV, cancel their newspaper subscriptions, and throw away their voter registration cards… wisely turning their attentions to their gardens and their grandchildren.
The other 98% of the population is entranced. Hypnotized. Exploited. Like dead wood.
More to come…
By Chris Lowe, Editor at Large, Bonner & Partners
The S&P 500 hit a record high yesterday… the 53rd new high this year.
But it’s not just that U.S. stocks are at record highs…
…market volatility is also at record lows.
“Volatility” is Wall Street speak for big price swings in assets such as stocks, bonds, and commodities.
High volatility indicates that investors are conflicted about the future. Low volatility indicates that complacency has crept into the market.
Wall Street’s “fear gauge,” the VIX Index, measures investors’ expectations of S&P 500 volatility over the next 30 days.
As you can see, volatility as measured by the VIX has never been lower since the data for the index began to be collected in 1990.
In other words, investor complacency has never been higher.
– Chris Lowe
Google, Goldman Bet Big on Blockchain
“The blockchain” is the decentralized ledger technology underpinning cryptocurrencies like bitcoin. Many believe the technology could have applications far beyond cryptocurrencies. And now, two of the biggest names in tech and banking are going long on blockchain technology.
Who’s Really Being Left Behind
As Bill has written often, much of “flyover America” has been left out of the economic recovery of the last decade. Now, a new interactive map shows precisely who is being left behind.
Trump Could Send This Sector Soaring
A recently-leaked White House memo shows that Trump could be preparing to making sweeping changes to one industry. Palm Beach Letter editor Teeka Tiwari has the details, and reveals which stocks could be primed to soar.
In the mailbag, readers consider if Trump was the Deep State’s real candidate…
As a non-American, it always mystified me why anyone would see Trump as anything other than he is, namely the Deep State candidate par excellence. Not only has he no history of ever doing anything for anyone but himself, but he has gamed the system with the best of the Deep Staters.
If the definition of gullibility is believing what people say, rather than what they do, it should be abundantly clear that a significant percentage of Americans – commonly identified as Trump’s “base” – are gullible. Clearly they weren’t the only ones sucked in.
– David H.
I happened on your essay “The Real Deep State Candidate” while searching for articles written by David Stockman, whom I greatly admire. Your essay was so accurate and insightful I had to read it several times to be sure, at this early morning hour, I wasn’t still dreaming.
I, however, disagree with your last sentence that “Mr. Trump… was the Deep State candidate all along.” Just look back at the late night of 11/8/16 when Dow Futures had dropped 750 points. About 15 hours later, the Dow was up 250 points, a swing of 1,000 points!
Hillary, the ultimate neocon, Wall Street darling, consummate insider, despicable corporate shill, was in my opinion the overwhelming choice of the “Deep State.” But the American voters threw a major “monkey wrench” into the machine. So the Fed had to do some very quick “heavy-lifting.” That was: rush on over to their keyboards, type in a journal entry, click on a mouse, and conjure into existence hundreds of billions (maybe even a trillion) of more “funny money.” It was “hard work” typing in those “extra zeros,” but somebody had to do it.
– Jerry G.
Xi Jinping opened the Chinese Communist Party conference the other day by pledging to build a socialist state that is “open to the world.” Obviously, he has observed American history. America built its success by being at least relatively open to the world.
Now, the Deep State, as exemplified by its representative, the isolationist, Know-Nothing Donald Trump, wants to close us away behind various forms of an Iron Curtain, literally so on the Mexican border, where we can seethe in our own juices.
The Deep State must have become suicidal, because that is the way to national self-destruction. Mr. Trump’s bias against anything that he decides is un-American just fosters biases and hatreds within the body politic. He is a perfect example of the worst of America, and the sooner the Republican party finds an excuse to impeach, to “fire” him, the better off we will all be.
– Charles B.
I too, wondered if Trump had a plan to slash U.S. government spending/bureaucracy because he saw, as a businessman, what waste there seemed to be. You’ve hit the nail on the head. Never have I seen someone so out of his depth politically.
In his previous world, maybe money did talk and he could get people to behave in a ‘Weinstein’ manner. But politics is all about how you make those people feel in themselves, ‘marketing’ for the people you like.
And all I can feel is a sinking sense that for all the great Americans I have met over the years, he’s making you all look like bar-room fools. I wait with interest for who he chooses to replace Janet Yellen. Maybe that choice will be the moment the markets take fright?
– Richard T.
Meanwhile, more feedback on the Diary’s new format…
Don’t like your new Diary format at all!!! Loved the way it was!!!
– Gary M.
I think the new format is great! It seems to be more to the point and reads a bit quicker too… Keep the stories coming, if nothing else, we can at least laugh with you as you move about the world.
– Arthur P.
I prefer the old format. This looks like change for change’s sake. What’s the point of it?
– Nick P.
I like the old format better. Change doesn’t always equal progress.
– Michael C.
The new format looks great!
– Jim L.
Meh… seems a bit less friendly.
– Laurie F.
Preferred the old format, although people do like sparkle with their news. Vibrant businesses always create slicker web pages over time. Car companies keep the tool and dye makers very busy with new sheet metal every year, although they seem to have hit a stagnant stretch in design, having kowtowed to federal mpg requirements causing them to mostly look alike.
Using the automotive analogy, I’d say don’t stray too far from what you have been doing; it still sells and what really matters is under the hood.
– Michael C.
One of Bill’s top analysts, Chris Mayer, just made a startling confession: “I’ve been holding back for years.”
Chris recently told us that he’s been keeping some of his most profitable ideas from readers, and even Bill, for years. But now he’s setting the record straight. See more here.