MUMBAI, India – The Dow managed a small bounce late last week. The bounce came as crude oil gushed higher, back above $30 a barrel. What next? We wait to find out…
We had dinner in London last night, before boarding a plane for India.
“A large part of the U.S. population must feel threatened by any kind of intelligence,” said a voice at a nearby table. A group of Englishmen were discussing U.S. politics. We eavesdropped.
“Can you imagine? That Trump… he seems like a flaming lunatic. His campaign is nothing but telling voters that he’s a good negotiator. He thinks it’s all just making deals with people. All that matters is getting a good deal.
Implanting a thought…
“Now he thinks people will vote for him because he got an endorsement from that total idiot Palin. What is the matter with Americans? How did they get to be so stupid?”
We almost got up from our chair. It was time to straighten these Brits out. But what would we say? Besides, it is a fair question: How did Americans come to be so stupid?
Of course, the same question could be asked of almost any nation. And it being Friday as we write this, and we being laid low by an epizootic and airline travel, we dug into our archives for an answer…
The American Brain
[Ed note: Originally published on November 5, 2004]
“There is no point in asking why Americans get caught up in the presidential election ritual, even when the campaigns are obviously manipulative and the candidates are far from the best the country has to offer. […] All rituals rest upon faith, not logic; all involve suspension of disbelief; and all seem as reasonable to the faithful as they seem absurd to unbelievers.”
– Forrest McDonald, The American Presidency
“I guess you found me out,” said a companion at lunch yesterday. “Yes, I am a monarchist. I don’t really believe in all these elections.” The man speaking was tall, fine-featured, very British, with the sort of hair your editor envies. (But then, he envies almost all hair.)
“Look, it all boils down to what the people will accept. They went along with monarchies for hundreds of years and were perfectly happy with them. When they didn’t like their king, they chopped off his head. That’s the way it ought to work.”
That is the way is does work. People go along with whatever hooey is popular. Not only do they go along with it – they go out of their way to take part in it. The front page of almost all the newspapers in Europe this week [in November 2004] carried photos of long lines of Americans eager to stand in solemn fraud to keep it going.
The entire queuemunity is here for the ritual…
Photo credit: Jiang Guopeng / Xinhua
Would it make any difference how the contest was decided? Would it be better if Bush and Kerry had just flipped a coin or fought it out with broken-off bottles in their hands? We don’t know.
As near as we can tell, democracy offers no particular improvement over monarchy, theocracy, or even dictatorship. Every system separates citizens from their money, bosses them around to some degree, keeps delinquents in line and generates its own statues, myths, and public holidays. But democracy is a la mode now.
Our crusaders in the Middle East do not risk their lives to force others to kneel down before the true cross; we judge our success in Iraq not on how many people convert to Christianity… but on how many turn into democrats! Not for the first time, we have reached what Francis Fukayama calls “the end of history.”
How to make sure they vote only once per election in Iraq…
Photo credit: Picture Alliance / DPA
We can imagine no better system, no finer people, no higher authority than the wisdom of the muddled masses… and no more glorious end than that which our fat plumbers, skinny scholars, and sly insurance salesmen have voted for us in the last election.
And so, the public spectacle of 2004: More people than ever before cast their ballots in the U.S. presidential election. But Americans have never been less free. There is a snoop behind nearly every door, a permission form to be filled out in nearly every day’s mail, a government regulator for practically every known activity, and a large mortgage attached to almost every house.
Nor have they ever been more timorous: A few fanatics with towels on their heads and murder on their minds have thrown the entire nation into hysterics. Nor have they ever been more in debt and more beholden to foreign creditors. Nonetheless, never before have they gurgled so triumphantly about America’s freedom, courage, and democracy.
Our beat is markets. But markets are moved by people and people are moved by their own beating hearts… and the curious programming of their own brains. We take a look at them…
Before mankind even existed, the pre-man primate lived on his instincts, like the rest of the animals. He had no language – no words. Which was probably a good thing. Often, he had no time for conversation. He had to react quickly.
Whether he was hunting or being hunted, an animal responds according to a sophisticated, but a completely unspoken and unthought logic. In nanoseconds, he made life or death decisions, without reference to any formal reason, elections, or newspaper headlines. He relied on what German philosopher Immanuel Kant called the “categorical imperative.”
The approach of a lion, for example, must have given rise to the same emotions as a registered letter from the IRS today. It also triggered another immediate categorical response: flight.
Crafty lions, still triggering a flight response…
Cartoon by Gary Larson
Our ape ancestor might never have seen a lion before. For all he knew, the big cat was a vegetarian. Or it was merely another monkey dressed in a cat suit. He could not know everything. So, he acted as modern humans do – on basic instinct, intuition, and the categorical imperative.
He evolved categorical rules. Or, it is probably more correct to say, they evolved him. See a big cat-looking animal approaching? Get the heck out of there as soon as possible! Those without the quick categorical response became lunch, not parents.
The development of words and language made a big difference because it introduced a new kind of thinking. Words had meaning. Words became categories – awkward, not nearly as subtle and fluid as intuitive categories, but versatile in their own way. Because they allowed humans to pass along more complex thoughts and sentiments.
“Cat! Big cat! Hungry cat!”
Unlike sounds that conveyed only emotions – fear, opportunity, danger, sorrow, and the like – words contained ideas… and large, super-charged metaphorical categories.
“Home,” for example. The single syllable is rarely emitted without a charge of emotion. In some circumstances, it brings tears to one’s eyes. It has a specific meaning – one may imagine his own ivy-covered cottage among the rolling hills of the Cotswolds… or his rustic cabin on the slopes of the Appalachians.
It has a general, categorical meaning, too. “Home” is where people live. It is also a financial asset for millions of people and a cost center for millions more. It is even a political term. Leftists, reformers, Bolsheviks, nationalists, Communists, and progressives of various social and political bents generally hate the word. It represents a traditional, bourgeois civilization – with its emphasis on private family life.
Loop, by Pawel Kuczynski
Given the opportunity, the reformers abolish the home and replace it with state nurseries and boarding schools for the children, along with drab worker housing for the adults – often sharing small apartments with other households. People will put up with almost anything, no matter how absurd, if it is for a “good cause.”
That is the disadvantage of man over animal. The animal will follow his instincts. Man will convince himself that his instincts are wrong… outmoded… retrograde. Then he will do the most remarkably asinine things – such as substitute state-run reformatories for family-run homes.
Often, the “smarter” the man, the more absurd and idiotic he can be. His “intelligence” helps him use words to persuade himself, and others, to do the most preposterous things! That is also George W. Bush’s great advantage: He does not appear smart enough to be an idiot.
His words didn’t make much sense. But voters sensed he had an intuitive understanding of the world similar to their own. Bush may be a fool, they reasoned, but when the average voter looked at him, he saw his own honest face… and he liked it.
“Let Freedom Reign”
Today, we humans are smothered with words. Words tumble out of newspapers, books, reports, TV, radio, the Internet. Some of the words are precise and useful – how to avoid taxes… a recipe for sponge cake… the instruction manual for a new computer. But many words are nothing more than invitation to rumble.
For example, when President Bush learned that sovereignty had been passed back to the Iraqis, the Commander-in-Chief sent a little note to Condoleezza Rice. With no speech writers or spinmeisters present to help, “Let freedom reign,” wrote the president.
Saluting the new primester (since deposed)
Cartoon by Steve Bell
We have no idea what Bush meant to say – if anything. If he meant that now we should back off and “let freedom reign,” it is a strange thought for a president who sent 150,000 troops… killed 10,000 to 20,000 foreigners (who, as far as we know, never did anything to us)… and destroyed Iraq’s government.
Maybe he meant that the Iraqis were now free… a situation he is merely applauding. But was it true? In what sense? Left to their own devices – that is to say free of foreign meddlers – Iraqis seemed quite content with a dictatorship. If getting rid of Saddam were so important to them, why would they not have done so themselves?
The English cut off Charles I’s head in 1649. Surely, the Iraqis had their own Cromwell somewhere… ready to do the “cruel necessity.”´Of course, the president’s apologists will have dozens of good reasons why the Iraqis needed us to intervene. We do not argue with them. We bring it up only to show how remarkably malleable and convenient words can be; it is a strange “freedom” that is only available at the whim of foreign invaders.
Prisoner of Thoughts
Is a democracy – or whatever it is that America has set up in Iraq – freer than a dictatorship? We don’t know. It depends. Citizens may not be free to vote in a dictatorship, but they could still be much freer. Given the choice between a dictator who left us alone and a democracy where everything we did required state approval, we would choose the dictator!
One could ask a million questions about “freedom” or “democracy” and still know nothing. It is like an argument between a madman and a U.S. Senator – half incomprehensible… the other half, soothing lies.
The words do not confront each other; instead, they pass like busloads of tourists in front of a philosopher’s grave. Who was he? What did he say? What does it mean? No one knows… or cares.
You can deconstruct the word “freedom” into a thousand different syllables. Indian independence leader Mahatma Gandhi once remarked that he was freer in his prison cell in New Delhi than most people walking around outside. He meant he was a free thinker; others were imprisoned by their own traditions, instincts, and intuitions.
He was right… but also wrong at the same time. He was free of the traditional thinking of the average Indian, but he had merely become a prisoner of different thoughts – his own – and was now trapped in two cells at once. But now, in the name of “freedom” and “democracy,” Americans leap to their own suicide.
They are so sure their system is foolproof, they rush to test it – with unnecessary wars, unnecessary deficits, unnecessary conceits and pretensions… and political leaders that make your jaw drop. Even President Wilson would have been shocked; Eisenhower would have been appalled.
The cerebrum homelandium
Image credit: Don Bayley
But that is the charm of the American frontal lobe. It sets up thoughts like drinks at an Irish wedding. Before long, the guests can barely find their car keys, let alone their way home.
Image captions by PT
The above article originally appeared at the Diary of a Rogue Economist, written for Bonner & Partners. Bill Bonner founded Agora, Inc in 1978. It has since grown into one of the largest independent newsletter publishing companies in the world. He has also written three New York Times bestselling books, Financial Reckoning Day, Empire of Debt and Mobs, Messiahs and Markets.
You may have noticed that our so-called “semiannual” funding drive, which started sometime in the summer if memory serves, has seamlessly segued into the winter. In fact, the year is almost over! We assure you this is not merely evidence of our chutzpa; rather, it is indicative of the fact that ad income still needs to be supplemented in order to support upkeep of the site. Naturally, the traditional benefits that can be spontaneously triggered by donations to this site remain operative regardless of the season - ranging from a boost to general well-being/happiness (inter alia featuring improved sleep & appetite), children including you in their songs, up to the likely allotment of privileges in the afterlife, etc., etc., but the Christmas season is probably an especially propitious time to cross our palms with silver. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add a little value to your life.
Bitcoin address: 1DRkVzUmkGaz9xAP81us86zzxh5VMEhNke
One Response to “Democracy Is No Better Than a Monarchy… or a Dictatorship”
Most read in the last 20 days:
- US Financial Markets – Alarm Bells are Ringing
A Shift in Expectations When discussing the outlook for so-called “risk assets”, i.e., mainly stocks and corporate bonds (particularly low-grade bonds) and their counterparts on the “safe haven” end of the spectrum (such as gold and government bonds with strong ratings), one has to consider different time frames and the indicators applicable to these time frames. Since Donald Trump's election victory, there have been sizable moves in stocks, gold and treasury bonds, as the election...
- The Great El Monte Public Pension Swindle
Nowhere City California There are places in Southern California where, although the sun always shines, they haven’t seen a ray of light for over 50-years. There’s a no man’s land of urban blight along Interstate 10, from East Los Angeles through the San Gabriel Valley, where cities you’ve never heard of and would never go to, are jumbled together like shipping containers on Terminal Island. El Monte, California, is one of those places. Advice dispensed on Interstate...
- A Trade Deal Trump Cannot Improve
Worst in Class BALTIMORE – People can believe whatever they want. But sooner or later, real life intervenes. We just like to see the looks on their faces when it does. By that measure, 2017 may be our best year ever. Rarely have so many people believed so many impossible things. Alice laughed. "There's no use trying," she said: "one can't believe impossible things." "I daresay you haven't had much practice," said the Queen. "When I was your age, I always did it for...
- Where’s the Outrage?
Blind to Crony Socialism Whenever a failed CEO is fired with a cushy payoff, the outrage is swift and voluminous. The liberal press usually misrepresents this as a hypocritical “jobs for the boys” program within the capitalist class. In reality, the payoffs are almost always contractual obligations, often for deferred compensation, that the companies vigorously try to avoid. Believe me. I’ve been on both sides of this kind of dispute (except, of course, for the “failed”...
- Trump’s Trade Catastrophe?
“Trade Cheaters” It is worse than “voodoo economics,” says former Treasury Secretary Larry Summers. It is the “economic equivalent of creationism.” Wait a minute - Larry Summers is wrong about almost everything. Could he be right about this? Larry Summers, the man who is usually wrong about almost everything. As we have always argued, the economy is much safer when he sleeps, so his tendency to fall asleep on all sorts of occasions should definitely be welcomed....
- Pope Francis Now International Monetary Guru
Neo-Marxist Pope Francis Argues for Global Central Bank As the new year dawns, it seems the current occupant of St. Peter’s Chair will take on a new function which is outside the purview of the office that the Divine Founder of his institution had clearly mandated. Neo-Papist transmogrification. We highly recommend the economic thought of one of Francis' storied predecessors, John Paul II, which we have written about on previous occasions. In “A Tale of Two Popes” and...
- Side Notes, January 14 - Red Flags Over Goldman Sachs
Red Flags Over Goldman Sachs Just to prove that I am an even-handed insulter, here is a rant about my former employer, Goldman Sachs. The scandal at 1MDB, the Malaysian sovereign wealth fund from which it appears that billions were stolen by politicians all the way up to the Prime Minister, continues to unfold. The main players in the 1MDB scandal. Irony alert: apparently money siphoned off from 1MDB was used to inter alia finance Martin Scorcese's movie “The Wolf of...
- Trump’s Plan to Close the Trade Deficit with China
Rags to Riches Jack Ma is an amiable fellow. Back in 1994, while visiting the United States he decided to give that newfangled internet thing a whirl. At a moment of peak inspiration, he executed his first search engine request by typing in the word beer. Jack Ma, founder and CEO of Alibaba, China's largest e-commerce firm. Once he was a school teacher, but it turned out that he had enormous entrepreneurial talent and that the world of wheelers, dealers, movers and...
- Money Creation and the Boom-Bust Cycle
A Difference of Opinions In his various writings, Murray Rothbard argued that in a free market economy that operates on a gold standard, the creation of credit that is not fully backed up by gold (fractional-reserve banking) sets in motion the menace of the boom-bust cycle. In his The Case for 100 Percent Gold Dollar Rothbard wrote: I therefore advocate as the soundest monetary system and the only one fully compatible with the free market and with the absence of force or fraud...
- Silver’s Got Fundamentals - Precious Metals Supply-Demand Report
Supply-Demand Fundamentals Improve Noticeably Last week was another short week, due to the New Year holiday. We look forward to getting back to our regularly scheduled market action. Photo via thedailycoin.org The prices of both metals moved up again this week. Something very noticeable is occurring in the supply and demand fundamentals. We will give an update on that, but first, here’s the graph of the metals’ prices. Prices of gold and silver...
- Regime Change: The Effect of Trump's Victory on Stock Prices
A Soaring Market On January 20 2017 Donald Trump will be sworn in as the new president of the United States. On the stock market his victory has triggered a lot of advance cheer already: the Dow Jones Industrial Average rose by a sizable 7.80 percent between the election and the turn of the year. Two big winners: the DJIA and Donald Trump - click to enlarge. Many investors are now wondering what effect the change in government will have on stock prices in the new...
- Donald and the Dollar
No Country Can be Made Great by Devaluation John Connally, President Nixon’s Secretary of the Treasury, once remarked to the consternation of Europe’s financial elites over America’s inflationary monetary policy, that the dollar “is our currency, but your problem.” Times have certainly changed and it now appears that the dollar has become an American problem. Richard Nixon and his treasury secretary John Connally. The latter is today mainly remembered for his...