Conspiracy of the Few

GUALFIN, ARGENTINA – “U.S. stocks fall on Trump talk…” began a headline at Bloomberg. Or it may be Trump action. We had already counted six major campaign promises – including no O’care repeal and no “America First” foreign policy – already buried (some for the better).

 

A bunch of campaign promises get the MOAB treatment…  A great many  theories have been proposed to explain Trump’s recent series of u-turns: 1. he is in thrall to the Deep State because he always was, or because he is blackmailed; 2. he plays a deep, Machiavellian game, and the strike on Syria and other policy reversals are just temporary reversals to get the media and the people promoting the story that he is a pawn of Putin off his back; 3. he simply reacts impulsively to situations as they develop, without even considering whether his actions are in line with his promises. Perhaps he was replaced by an android?

Cartoon by Nate Beeler

 

Then came four more major policy reversals on Wednesday. Seeking Alpha reports:

 

In a single day, President Trump appeared to reverse his positions on no fewer than four key pledges that arguably led to his election victory.

Trump told WSJ [The Wall Street Journal] yesterday that China is no longer a currency manipulator, he respects Janet Yellen and perhaps could nominate her to another term leading the Fed, he would support the Ex-Im [Export-Import] bank after previously saying he would shut it down (good news for the likes of GE and Boeing), and NATO was no longer obsolete since it is fighting terrorism.

 

In the same interview, Trump said he believed the dollar was “getting too strong,” sending the dollar lower and gold higher.

In a way, this is good news. “The Donald” is doing the same things, more or less, that anyone else in his position would have done. He is doing what the insiders want.

And now that Team Trump and the Deep State are lined up, we can get back to business. No need to focus anymore on day-to-day politics; the program is the same as it has been for the last 30 years.

Every government is a conspiracy of the few against the many. Call it communism, socialism, or liberalism… “divine right”… or “dictatorship of the proletariat”… or “Make America Great Again” – it hardly matters.

 

This quote (and variations thereof) has been ascribed to at least five different people, so it is not certain who actually said it first. It is the kind of idea that may have occurred to several people independently, mainly because it is so obvious. If one looks at historical political cartoons, one quickly realizes it has been a recurring complaint ever since elections were first held.

Photo credit: Jill Posener

 

The program is the same: Insiders use the government to take power, status, and money from the great mass of outsiders. What matters from the point of view of the average person is not what you call it, but how much of it there is.

The less the better. The government that governs best, as Jefferson put it, is the one that governs least.

 

Makers and Takers

The key difference between the insiders and outsiders is how they do business. Common folk do win-win deals with each other – trying as best they can to earn a living.

The insiders trade in win-lose deals… sweetheart contracts, taxes, wars, asset confiscations, financial repression. artificial interest rates, and restrictions and regulations that favor their industries.  And all of it is backed, ultimately, by the power of the feds to do you harm if you don’t go along.

When we talk about win-win and win-lose deals, we’re not talking about the outcome. We can never know how a deal will turn out because we can never know the future. We’re talking about the deal at the outset.

When two people in the Main Street economy make a deal – it could be as complicated as a merchandising contract or as simple as buying a quart of milk – each party to the deal must believe he will come out ahead. Otherwise, he wouldn’t do the deal. Win-win.

 

Demonstration in favor of free trade in London in the 1840s. There were pro free trade demonstrations in Spain in the late 1860s as well. Apparently there were times when people actually understood that voluntary exchanges are always a win-win, and that this fact is not magically altered by the existence of national borders.

 

But when the feds impose a new tax, drop a bomb, or write a regulation, they are forcing a bad deal on people. The manufacturer of the bomb may make a profit, but the people on whom the bomb is dropped have no choice but to accept it. Win-lose.

The bomb takes time and resources to build – destroying wealth that could be used for other things. When it explodes, it destroys even more wealth.

The common, civilized man of the Main Street economy is a maker. He has to give in order to get. His boss, his customer, his client – he has to satisfy them or he will get nothing.

The insider is a taker. He may toil from sunup to sundown, too, but the fix is in. Like a TSA agent or an EPA inspector, he gets his money whether he does anything useful or not. No need to meet a payroll, provide a real service, or satisfy a demanding customer.

 

A cartoon from 1917 – there is nothing new under the sun…

Cartoon via vetfriends.com

 

How the Ticks Get Shaken Off

So the measure of happiness (and wealth… though it doesn’t have to be financial wealth) in a society can be expressed simply as:

 

S (satisfaction) = RV (real value) of w-w – w-l

 

…all of which merely sets the stage for an observation.

Trump was right: The way to make America great again is to “drain the swamp” of all those win-lose deals imposed on them by the insiders. But now that we see that Mr. Trump is working with the insiders rather than against them – pumping in water, not pumping it out – we can see, faintly, what happens next.

Because the insiders never know when to stop. The feds control the system. And the insiders control the feds. They are like ticks on a dog. Collectively, they may know that if they keep draining the poor dog’s blood, the animal will drop dead, and they will all have to find a new home.

But individually, none of them has an incentive to stop sucking. They take, take, take… until something gives. Historically, the only way the insiders have been shaken off is by catastrophe. War, conquest, bankruptcy, revolution, or plague. Take your pick.

 

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.

 

 

 

Emigrate While You Can... Learn More

 


 

 
 

Dear Readers!

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 “Trump Is An Insider Now”

  • Kafka:

    So I guess it is down to “he’s not Hillary”. I read his book years ago when he was beating the drum about training yourself to live with 3 or 4 hours of sleep. Clearly he does not get enough restorative sleep to repair the brain and refresh the body.

    So the Decline of Empire continues.

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • Japan: It isn’t What the Media Tell You
      Known for Being Terrible For the past few decades, Japan has been known for its stagnant economy, falling stock market, and most importantly its terrible demographics.     A chart of Japan's much-bewailed demographic horror-show. Most people consider a declining population to be a bad thing due to the implications for assorted state-run pay-as-you-go Ponzi schemes, primarily those related to retirement. It is hard to be sympathetic, since it would have been possible to...
  • Bitcoin Facts
      A Useful Infographic When we last wrote more extensively about Bitcoin (see Parabolic Coin – evidently, it has become a lot more “parabolic” since then), we said we would soon return to the subject of Bitcoin and monetary theory in these pages. This long planned article was delayed for a number of reasons, one of which was that we realized that Keith Weiner's series on the topic would give us a good opportunity to address some of the objections to Bitcoin's fitness as a medium of...
  • An Update on Polly: She May be Coming Back to Life
      A Twitch of a Toe In our recent update on credit spreads we proposed to use the seemingly deceased  Monty Python parrot Polly as a stand-in for the suspicion of creditors in today's markets.  The question was whether Polly was indeed dead or merely in a deep coma. Depending on this, one should be able to gauge how powerful a miracle will be required to resurrect her.   Meet Polly. Is she alive?   In the first half of November there was actually a small sign that...
  • The Complete Idiot’s Guide to Being an Idiot
      Style Over Substance There are many things that could be said about the GOP tax bill.  But one thing is certain.  It has been a great show. Obviously, the time for real solutions to the debt problem that’s ailing the United States came and went many decades ago.  Instead of addressing the Country’s mounting insolvency, lawmakers chose expediency without exception.  They kicked the can from yesterday to today.   The empty chairs meeting – this is slightly...
  • The Zealous Pursuit of State-Sponsored Collapse
      When Bakers Go Fishing Government intervention into a nation’s economy is as foolish as attempting to control the sun’s rise and fall by law or force.  But that doesn’t mean governments don’t meddle each and every day with the best – and worst – of intentions.  The United States government is no exception.   From the “When the government helps the economy” collection: Breaking a few eggs while baking the bridge to nowhere omelet. [PT]   Over the...
  • Precious Metals Supply and Demand – Thanksgiving Week
      Grain of Salt Required The price of gold fell $7, and that of silver 24 cents. This was a holiday shortened week, due to Thanksgiving on Thursday in the US (and likely thin trading and poor liquidity on Wednesday and Friday). So take the numbers this week, including the basis, with a grain of that once-monetary commodity, salt. We will keep the market action commentary brief.   Relatively modern examples of salt money which was widely used in African countries until the...
  • Lessons from Squanto
      Standing In Your Way Governments across the planet will go to any length to meddle in the lives and private affairs of their citizens.  This is what our experiences and observations have shown.  What gives? For one, politicians have an aversion to freedom and liberty.  They want to control your behavior, choices, and decisions.  What’s more, they want to use your money to do so.   As this by now famous cartoon implies, the State is essentially a gang of criminals...
  • What’s the Point? Precious Metals Supply and Demand Report
      Questions and Answers A reader emailed us, to ask a few pointed questions. Paraphrasing, they are:   Who cares if dollars are calculated in gold or gold is calculated in dollars? People care only if their purchasing power has grown. What is the basis good for? Is it just mathematical play for gold theorists? How does knowing the basis help your readers? Is it just a theoretical explanation of what has already happened? Prove that if someone has known the basis...
  • The Stock Market and the FOMC
      An Astonishing Statistic As the final FOMC announcement of the year approaches, we want to briefly return to the topic of how the meeting tends to affect the stock market from a statistical perspective. As long time readers may recall, the typical performance of the stock market in the trading days immediately ahead of FOMC announcements was quite remarkable in recent decades. We are referring to the Seaonax event study of the average (or seasonal) performance across a very large...
  • The Party of Spend More vs. the Party of Tax Less
      Eternal Spendathon The Senate just passed a 500-page tax reform bill. Assuming it lives up to its promise, it will cut taxes on corporations and individuals. Predictably, the Left hates it and the Right loves it. I am writing to argue why the Right should hate it (no, not for the reason the Left does, a desire to get the rich).   The Federal debtberg has grown beyond all measure since Nixon's gold default. So has the money supply and the amount of private debt. No-one...
  • The Santa Claus Rally is Especially Pronounced in the DAX
      The Gift that Keeps on Giving Every year a certain stock market phenomenon is said to recur, anticipated with excitement by investors: the Santa Claus rally. It is held that stock prices typically rise quite frequently and particularly strongly just before the turn of the year.   Unbeknown to many, Santa Claus paid a high price for enriching investors [PT]   I want to show you the Santa Claus rally in the German DAX Index as an example. Price moves are often...
  • Heaven Forbid Peace Should Break Out Between the US and North Korea!
      Rude Interruptions As long as the US Empire can be funded and maintained on the backs of its taxpaying public, the chance of a deescalation of tensions not only on the Korean peninsula, but throughout the world are practically nil.  And as long as the nation’s current interventionist ideology holds sway, it will only be through a financial meltdown that the role of the US as global policeman will come to a much-needed end.   Hamhung, North Korea, June 30, 1950; an example...

Support Acting Man

Top10BestPro
j9TJzzN

Austrian Theory and Investment

Archive

350x200

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com