PORTLAW, IRELAND – Why was Donald Trump elected? What kind of accident was this?
The liberal intelligentsia has been trying to come up with an answer – not just any answer, but one that accomplishes two very important purposes.
It must point the finger of blame at someone else… not itself. And the answer must help put its fat butt back in the driver’s seat.
Cometh the Brandeis professor, Robert Kuttner to the rescue! What can he blame for The Donald’s rise? Capitalism! The New Yorker summarizes in a recent review:
Today, as in the nineteen-thirties, strongmen are ascendant worldwide, purging civil servants, subverting the judiciary, and bullying the press. In a sweeping, angry new book, Can Democracy Survive Global Capitalism? (Norton), the journalist, editor, and Brandeis professor Robert Kuttner champions [Karl] Polanyi as a neglected prophet. Like Polanyi, he believes that free markets can be crueler than citizens will tolerate, inflicting a distress that he thinks is making us newly vulnerable to the fascist solution.
Balance of Baloney
Today, we rise neither to attack Donald J. Trump nor to defend him. Our purpose here at the Diary is to connect the dots.
The Donald is a man of action… a media star. To his everlasting credit, he is not trying to force his ideas onto the nation.
He’s not interested in ideas. And he knows that Americans, in the main, detest them and generally mistrust anyone who thinks about them.
He just follows his instincts… hoping that they will lead him towards more fame and greater fortune.
But that leaves him out of the picture for today.
We’re talking about ideas… specifically, the boneheaded ideas of the Democrats, The Donald’s most vocal enemies.
We begin by pointing out the elegant balance of baloney that characterizes the modern American political system.
The Donald pretends to be a conservative; but there is nothing conservative about him. The liberals pretend to be “progressive,” but their most urgent priority is to take aim at the future… and shoot it dead before it gets too close.
Nobody knows what tomorrow will bring; neither Republicans nor Democrats want to find out.
The liberals want more power and more money for their pet projects, schools, welfare programs, medical care… and, of course, their wars.
Remember, it was then-Secretary of State Hillary Clinton who expanded America’s hapless role in the Middle East. We’ll let The Huffington Post summarize:
Hillary was a staunch defender of the military-industrial-intelligence complex at every turn, helping to spread the Iraq mayhem over a swath of violence that now stretches from Mali to Afghanistan. Two disasters loom largest: Libya and Syria.
The “conservatives” go along with the “liberals’” domestic boondoggles (they don’t want to lose elections). Then, when it comes to overseas misadventures, they up the ante.
“America needs a strong military,” they say, not realizing that military spending reached “hormegeddon” territory – where each additional dollar makes Americans less safe – long ago.
We coined the word, “hormegeddon” ourselves. We used it as the title for our last book. It’s a shame the neologism never caught on. It describes what happens after the law of diminishing returns runs its course: The returns go negative.
Some military spending may be good, even necessary. But too much can get you killed.
[Editor’s Note: Subscribers of The Bill Bonner Letter can read a digital version of Bill’s book, Hormegeddon, right here.]
Deep State First
Both parties represent, first and foremost, the interests of the Deep State, the loose collection of insiders, chiselers, and hustlers who use the government to get wealth and status for themselves.
And what is the common enemy of both the right and left wings of the Deep State? Corruption? Incompetence? The Devil himself?
No… it’s capitalism.
Economist David Ricardo, in his 1817 work On the Principles of Political Economy and Taxation, introduced the term “capitalist” to describe a person who owned wealth-producing assets.
But people had learned, centuries before, that they were better off if they respected private property, honored the commitments they made to one another, and used honest money to keep track of who owed what to whom.
“Capitalism,” in other words, is what happens when people are left alone and free to make win-win deals among themselves.
This is not to say there aren’t plenty of cheaters in the capitalist world. But they are the exceptions who are constantly weeded out. Most people pay for what they get… and get what they pay for.
Capitalism is not a “system.” It can’t be improved, reformed, or redesigned.
Like freedom itself, all you can do is take it away – by breaking contracts, stealing property, and counterfeiting money.
But the aforementioned Brandeis professor sees it differently. Kuttner rehashes the work of Hungarian intellectual, Karl Polanyi, who fled Hitler in 1933.
Neither Polanyi nor Kuttner seem to have thought much about how capitalism works. They think it can be “gratuitously cruel,” for example.
Of course, free people doing win-win deals with each other are bound to make mistakes. And the people doing these deals are bound to try to take advantage of each other when they can get away with it. The result appears chaotic, undisciplined, and unfortunate at times.
But capitalism is only indifferent; never cruel.
The word “cruel” is better applied to the deal breakers and property stealers – Lenin, Hitler, or Mao, for example. Their big ideas – “national socialism”… “from each according to his ability”… the “Great Leap Forward” – sent 100 million to early graves.
How many were killed by capitalists such as Henry Ford, Andrew Carnegie, or Steve Jobs, for example? How many lives were ruined by automobiles and cheap computers?
But Polanyi saw capitalism as a big danger. It caused economic hardship. And when people feel pinched, they get upset and vote for rabble-rousers like Donald Trump. Capitalism, in other words, leads to fascism.
Therefore, more power and money should be handed over to the “liberal” wing of the Deep State… to prevent the rise of fascism!
Knife in the Back
There is a piece of this that is probably correct.
When people think they are being cheated… they will want to try something else. Typically, someone will come along with a “New Deal,” or promise to “Make America Great Again,” or urge “Workers of the World, Unite!”
But it was not capitalism that cheated America’s working class… nor even capitalism in Austria that led to Hitler’s rise in the 1930s. Austria had been ruled by coalitions of Marxists, fascists, and social democrats since the end of World War I, with varying degrees of meddling.
And in the U.S., the peak in win-win was probably in the late-19th century.
Since then, the Deep State has grown, with its taxes, regulations, the Fed, its Great Society, and its wars – all of them meant to hobble capitalism and keep the money flowing to the insiders.
As we have seen in these pages, the new, gold-free dollar of 1971 probably did the most damage. It perverted the capitalist system.
“Capitalists” no longer needed real capital; they could get it from the Fed – free money that no one ever earned.
The Deep State no longer needed tax revenues, either; it could borrow trillions without voting for a tax increase.
The rich got richer on all this unearned cash. The working classes got poorer, as their major asset – their time – declined in value.
Why did the masses vote for Trump? The answer is easy: They felt the knife in their backs.
They didn’t know who had put it there… but they knew it wasn’t Donald J. Trump.
MARKET INSIGHT: BUYBACKS HEADED FOR NEW RECORD
By Joe Withrow, Head of Research, Bonner & Partners
Corporate stock buybacks have hit a blistering pace in 2018.
Corporate stock buybacks are when a company repurchases shares of its own stock from the marketplace, then “erases” them. This reduces the total number of shares outstanding, which, in turn, increases the price per each remaining share.
And according to an estimate put out by Goldman Sachs, stock buybacks are on course to hit a new record this year.
Today’s chart tracks the total amount of stock repurchased by companies in the S&P 500 Index each year from 2006 to 2017… as well as this year’s estimate from Goldman Sachs.
As you can see, corporate stock buybacks are estimated to hit a record $650 billion this year.
That would surpass the previous record of $589 billion set in 2007.
– Joe Withrow
How to Run a Business Like Bill Gates
Not all businesses are made equal. Those that stand out from the crowd have a few things in common…
Why 3,000 Swedes Have Microchips Under Their Skin
The Swedes have embarked on an unusual experiment: putting microchips into thousands of their citizens. The chips act in place of key cards that you might use at work or the gym. Is this “biohacking” the way of the future? Or is it a dangerous trend?
Stocks Could Be Cut in Half by the End of the Year
Professional stock trader Jeff Clark sees a monster bear market looming. He says that U.S. stocks could be cut in half before this year is over. But don’t panic. Do this instead.
In the mailbag, Bill’s Diary, “How to Get Ahead in the Swamp,” has sparked conversation…
Well said, well said – once again. I’d like to offer one small amendment: “Put enough complicated laws on the books and what you really have is a government of men – and women – who help you get around them.” Not sure who The Donald has, but you can’t forget Lois Lerner and dear old Nancy Pelosi.
– Margaret T.
The only way to have a swamp-free government is if it’s run by computers. In the real world, you only have ebbs and flows of corruption. But it takes two to tango. The question is where the quo is for Novartis, for example, or AT&T, for that matter. Seems like they wasted their money. Isn’t that a form of draining the swamp?
– Erich K.
I’m sorry that you have negative comments about Ms. Gina Haspel’s past. She participated in the black business of international espionage and did not play to Hollywood movie critics. Seems that other countries like to poison folks, and they were not Hollywood-scripted, either. You may want to add a cry room in your home remodel.
– Charles D.
Donald Trump is about to shock the world. He works methodically, but he works. Behind the scenes, he is working the position like a master chess player. Why do you think there have been so many big names that are hired and then suddenly gone? Loyalty is hard to find and can’t be bought – so much so that Macron and Merkel looked like the globalist puppets that they are by trying (and failing) to keep Trump in the deal. When money flowed to Iran via the deal, three planes were used. One landed in Iran. The other two… are the price of doing business with crooks. Trump and his confidants have the dirt on everybody, the kind of stuff that can shutter careers, change lives, and ruin well-planned, decades-old – even centuries-old – money scams (like the ones where you print up a dollar for pennies and lend it for full face-value plus interest).
Yes, the clock is ticking. Many think it’s ticking against Trump. If they only knew. The truth is going to hit them like a Mike Tyson uppercut that knocks their lights out. The scams of the past have all their dealings rooted in similar evils. Now, those evils will be wielded like a masterful sword. Control and influence only work when you have the upper hand. They lost it the day Trump was inaugurated, possibly even before it. They thought Hillary would win. They had bet the farm, the stables, and even the cows on her. Now, the payback begins. Sit back and get ready to watch a master play the game.
– Robert C.
Meanwhile, a Dear Reader reviews Bill’s recent vintage…
Your wine is fine. I popped open a bottle the very evening I received your non-reserve wine, which was a scant two days after I ordered it. It’s very drinkable – no tannin bite, rich color, mild aroma – but it’s not what I would call bold or robust. If I had to use two words to characterize it, I would say smooth and pleasant.
– Jim R.
Editor’s Note: Have you tried a bottle of Bill’s Tacana Malbec? Is it bold and robust? Or smooth and pleasant? Order a case and decide for yourself.
IN CASE YOU MISSED IT…
Jeff Clark isn’t your typical stock trader…
He rarely wears a suit… hardly ever goes into the office… and seldom leaves his house before noon.
But he’s been able to do all of this because he’s found a method to make more money in a few days than most people make in a month. Here’s how he does it.