In America today, takers rob makers whilst police and politicians earn handsome sums aiding and abetting the robbers.
Today, I am indebted to young Mr. Bill Bonner, Chairman, Bonner & Partners, who sends us the follow note about “watching the zombies.” It is suggestive of a debate that ought to have been enjoined by the Party of Weak Men, my own, against the hilarious dictates of the sulking, pouting, self-aggrandizing, Children’s Party, not my own, the past election cycle.
My Party, the Party of congenitally, weak men, backed down instead of standing up when Mr. Romney was quoted as saying, essentially, that one-half of the country was carrying the other half on its back–not to mention half of the rest of the world now supported as wards of the American free money machine.
Actually the breakout was, I think, 53% vice 47% makers over takers–counting only the American burden, ignoring the rest of the world perched on the backs of the American makers. Accessing the, solely American, field position, 53-47 in favor of makers seemed to me at the time a breakout suggestive of a, cautionary, tepid, hope for salvation.
My Party, ever ready to throw a race that can’t be lost, if only to avoid dealing with real issues, failed to enjoin the debate, the premise of which ought to have been this: once that breakout of takers over makers crosses the 50 yards line, we’re toast–by which meaning, at that point, more than a majority have a vital, tangible, self-interest in perpetuating a government that takes from the producing class and gives to the idle class.
Retreat from a position 50+ yards line benefiting takers over makers is not possible and thus, is, game over for US as a nation of any consequence.
Quite naturally, that issue was abandoned in terror and fright by my Party, Party of the weak man, when air-headed news girls expressed chagrin that Mr. Romney was “being mean to the sick people, little babies and the poor.” Heavens!!!
Mr. Romney, of course disavowed his own words and ran a campaign in which he said, essentially, nothing, except that he was proud to say he was not the incumbent–a platform that, on paper, made good sense given the intense enmity–in fact far too nice a word, but this is a family program–that the Americans hold for that incumbent.
The weak Party, my Party, lost, as usual. The Children’s Party, not my Party, won, as usual. Mr. Bonner, sends us an interesting spin on these takers v. makers events and, suggests, implicitly, what might have been had my Party only been brave—just this once. But of course, that can never be.
That all said, while I am happy to introduce you to Mr. Bonner and his interesting, on topic, note of today, I take substantial quarrel with him respecting a certain Mr. Grover Norquist, the self-styled anti-taxation fella. Mr. Bonner seems today enamored of Mr. Grover Norquist. He oughtn’t to be.
But then, Mr. Bonner hails from Baltimore, so I make due considerations.
Mr. Grover Norquist, the anti-tax fella, has been around this city, Washington, for a good number of years selling his pots and pans amongst the unseemly carnival of other hucksters and salesmen found here feeding off the corpus politic in general. Grover likewise is but part of a very large and very comfortable cabal of hucksters and highwaymen that feeds in specifics on the faux debates that are called here “substantial and pressing, even dire, life or death, differences of opinion,” but that are, in reality, simply different fellas making different, very loud noises, the purpose of which is, not to make things better for the nation as they purport, but rather to further feather their own, already very well-appointed nests, selling more of their pots and pans.
Like all door to door men at Washington, Grover started small and soon became hardened of rejection by the overstrained real housewives of this city who slammed the door many times in young Grover’s face. So many hucksters selling pots and pans make the customers cold and callous, but Grover was persistent—which counts for a great deal in sales. His Mommy cautioned baby Grover, just starting out as a door to door man, that “Girls already have far more pots and pans than they will ever need—creating a condition, called, I think, in academic economics, ‘market saturation.’” You are free to check, if you are very bored today, the academic lingo with a fellow called Krugman, another pan-banger at Washington selling, I think, a line called “credentialed economics with a Nobel Prize to boot.” Who cannot but like it here?
Young and enterprising, Grover, nose bloodied but head held high, set about to differentiate his pots and pans from all the others being palmed off on the real housewives of Washington, District of Columbia. He designed a patter of selling, in equal parts self-deprecating and novel. Grover boldly told housewives, quickly, before they could slam the door again in his poor nose, “Madam, I am fully aware that my goods are not needed in your home but I can offer them to you—Tax Free, mam!!”
Friends, you know the rest. Next thing you know, ole Grove’s a millionaire, twice over and counting.
Moreover, Grover has perfected the attitude of politicians in the city who openly, piteously and indiscreetly disdain their customers with a loud and loathsome public mockery. This is a common affliction among pots and pans salesmen of all levels at Washington, District of Columbia—largely driven, I suspect, as paybacks for all the sore noses young Grover and others here have had to endure over time.
Door to door men, and politicians, hold a healthy disdain and contempt for those who slam the door on sight of them at the doorstep, hurting their poor noses. But no salesman holds any door slammer in anything like the disdain and contempt he holds for those who do buy his pots and pans. The idea being “anyone stupid enough to fall for my sales pitch, is beneath all contempt.”
I am roundly disliked among all the salesmen here, as I am a permanent fixture, whilst they are weary, boisterous, commercial travelers, to all of whom I am icily indifferent. But I am never so much disliked and disdained by the hawkers and barkers as are the customers who do buy their products.
A case in point can be seen in the reactions of the Presidential candidates the night of November 6, 2012. Mr. Romney was very much surprised to have lost, as he expected, with very good reason, that he would win. But his grace and magnanimity in defeat belied a grudging admiration for the real housewives who slammed the door in his face.
On the other side of things, the incumbent, who both very much deserved to lose and fully expected to lose, and I am told wanted to lose, appeared at first shocked, vexed and surprised that he had won a re-election, a win that was, quite frankly, inexplicable. Impossible. Could not have happened. But, it did. Quickly overcoming surprise, the incumbent began to make a spectacle of the foolish housewives who re-elected him, he thinking, “these cows were stupid enough to buy my pots and pans in 08, but how utterly idiotic they are to re-elect me in 2012.”
Hence, the inexplicable is explained. Politicians, simply selling wholesale the pots and pans of smaller retailers such as Grover, suffer from a massive sense of inferiority. That massive inferiority drives this self-assessment of the customer base: “anyone stupid enough to vote for me is truly beneath all contempt.” And, they are right as rain about that. In this sense, likely only in this sense, are politicians ever speaking truth, either to themselves or to others.
Making things a tad easier for the hard-working salesman, Uncle Ben at the Federal Reserve bakes fresh loaves of bread DAILY, and in such abundance for Washington, District of Columbia salesmen to feed and grow fat upon, that it certainly is true, as we say at Washington, “if you can’t make it here, you can’t make it anywhere.”
That all aside, the incumbent now gets to remain the incumbent, Uncle Ben keeps hard a bakin’ and Grover gets to make more millions from you “tax free, mam!!” Such is the business of life at Washington, District of Columbia.
Washington is full to the gunnels with men who take their, very amble, living pretending to inform and improve the lives of the people from whom they merely, take their handsome living, and give back–nothing. These men, representatives of the 2 Parties, their lackeys and handmaidens and ponces in the press services and on the television, have cooked up a new war dance to irritate the populace at Christmas, 2012.
Uncle Ben pays for the show and claps giddily as newsgirls, Grover and the other salesmen of all brands of pots and pans breathlessly shout out “High Hell and Havoc!!” that if this or that action is taken or not taken, the world will end, notwithstanding the imminent arrival of the Babe Jesus, a moment of true importance. All hysterical salesmen of course ignore, not only the Babe Himself, but likewise the real and pressing fiscal abyss into which we all shortly will plummet.
That hash now settled, I commence to quote to you young Mr. Bonner’s note to us today, here in full:
The Real “End of America”
by Bill Bonner, Chairman, Bonner & Partners
Oh, boy! Check out this “zombie watch” report from Bloomberg:
California Highway Patrol division chief Jeff Talbott retired last year as the best-paid officer in the 12 most-populous U.S. states, collecting $483,581 in salary, pension and other compensation.
Talbott, 53, received $280,259 for accrued leave and vacation time and took a new job running the public-safety department at a private university in Southern California. He also began collecting an annual pension of $174,888 from the state…
While more than 5,000 California troopers made at least $100,000 in 2011, only three in North Carolina did, the data show. Talbott’s $483,581 in total pay — adding six months of his $174,888 annual pension, based on his June 30, 2011, retirement date — is almost four times as much as the $122,950 collected by the top-paid officer in North Carolina, a commander, the data show.
Talbott declined a request to be interviewed, said Patty Zurita, communications manager at the University of the Redlands in Redlands, California, where he now works.
Nice gig. Retire at 53. Get a pension of $174,000. And then get another job in the same line of work.
|Zombies Retire Early,
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Talbott is probably a decent fellow. He probably does a good job. But he has been zombified. What he gets no longer matches up with what he deserves. In other words, he consumes more resources than he really earns.
Why are we making so much of zombies? Is this some kind of joke?
Nope, ‘fraid not…
If you don’t understand zombies, you’ll never really understand what is going on in the Great Correction. The Fed is printing $85 billion a month… governments are running trillion-dollar deficits… and zombies are getting the lion’s share of the money.
Getting What’s Coming
Since 2008, the U.S. and much of the world have been paying down and defaulting on debt. This is natural. People make mistakes. Especially when central banks give them far too much credit.
They borrow too much. Then they realize they have to pay down debt. That’s what the private sector has been doing since the collapse of subprime debt in 2007.
So what if people make mistakes? Exactly! Who gives a damn?
When an individual or a company makes a mistake, it is self-correcting. Suppose, for example, a person drinks too much. If he keeps drinking more and more, the problem will take care of itself.
He’ll either go on the wagon… or he’ll get delirium tremens and crack up.
He’ll get what he deserves.
So too, a company that is severely mismanaged will get the heebie-jeebies and go broke. Soon, it will cease to exist. Problem solved.
Even if the entire private sector goes off its head and borrows too much… so what? Don’t worry about it. That’s what corrections and depressions are for.
But there are some mistakes that are self-reinforcing and not self-limiting. They get worse, not better. And there are some victims who are the not the same people who made the mistake.
When central planners make a mistake, the harm often falls on everyone but the central planners. And when they’ve gone too far… they just keep going!
Why is that?
It’s because of the peculiar perverse feedback loops in centrally planned systems.
First, as systems become larger and more mutualized it becomes harder to tell what’s really going on.
Ben Bernanke and Larry Summers can tell us that we are in a period of “demand shortage.” What the hell? Maybe they’re right.
And when they apply their “fixes,” we can’t really know what will happen either. Maybe the economy really will run better. And maybe their “fixes” could help. What do we know?
Second, the “fixes” almost always mean more money to someone who hasn’t earned it.
One company gets bailed out. An entire industry gets recapitalized and subsidized. The Fed prints and the federal government is able to continue its free-spending ways — with more employees, more disabled people, more contracts, more food stamps and so forth.
All of these people are zombies. They consume. They produce little or nothing of value. Then the zombies push for more spending… bringing forth more zombies!
At least our friend Mr. Talbott works. Many zombies don’t bother to lift a finger.
Pretty soon, half the country is living at the other half’s expense.
And oh yes… Yesterday we said we could prove that the Fed’s easy money was contributing to the spread of zombies.
Cheap Financing of Bad Policies
Well, here it is….
The Fed exchanges U.S. Treasury debt and agency mortgage-backed securities for newly digitized cash.
What do the financial institutions do with it?
They need to put it to work. The private sector isn’t borrowing. So that leaves government — state, local and national. And since governments can finance their deficits with this easy money, it is easier for them to continue spending rather than cut back.
Remember how Leszek Balcerowicz, Poland’s central banker, put it? They “get a lot of cheap financing to finance bad policies.”
What do they spend on? Zombies. They pay police officers four times what they’re worth, for example.
Spend Less… Tax Less… Grow More
Sure, zombies cost money. But don’t we get a better economy when we spend more money? Don’t we get more and better services when more people are on the government payroll?
Buffett, Krugman, Obama et al. are clamoring for higher taxes. Doesn’t better government cost money? And don’t places that pay more get more?
Not on the evidence.
“States that Spend Less, Tax Less — And Grow More” begins an article in The Wall Street Journal last week.
The U.S. states are good places to observe the effects of tax and spending policies. They all have more or less the same sort of people… same culture… same national economic and trade policies and so forth. But they have different tax systems… and they spend different amounts.
The American Legislative Council studied the data. Did it show better services in the high tax/high spending states? Did it find faster economic growth where state governments ran with high levels of taxation and spending?
Education is the top item for most states. But spending on education “has no relationship to outcomes,” the researchers concluded.
Per pupil spending varied from a high of $18,126 per student per year to a low of $8,507. The difference in output as measured by standardized testing? Negligible.
The extra “investment” of resources was wasted.
Nor did the higher tax states show stronger economic growth. The study’s conclusion:
States without an income tax have significantly better growth in private sector GDP (59% versus 42%) over the last 10 years. They increased the number of jobs by 4.9%, while jobs in the rest of the states declined by
2.6%. States without an income tax gained population (+5.5%) from domestic migration (U.S. residents moving in and out of states) while all other states as a whole lost 1.3% of population between 2000 and 2009.
Grover Norquist is right. Higher taxes (and/or Fed money printing) merely enables higher spending.
Don’t feed the zombies!
I here cease to quote from young Bonner and thank him for his note to me today. And to all, a good night.