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June 1, 2018 | Why Trump Is President

Is an American author of books and articles on economic and financial subjects. He is the founder and president of Agora Publishing, and author of the daily financial column, Diary of a Rogue Economist.

The show is Trump, and it is sold-out performances everywhere.

– Donald J. Trump, Playboy magazine, 1990

YOUGHAL, IRELAND – Commentators and political analysts have consistently misread our president.

They try to understand him using traditional political categories. Is he a conservative or a liberal? Is he a Republican or a Democrat? A big spender or a tightwad? Jeffersonian or Hamiltonian? An empire builder… or a constitutionalist?

Those who dislike him say that he is a conniving, self-obsessed moron who has no idea what he is doing. Those who like him say that he is a shrewd, instinctive patriot who stands up for what is good and right in the face of desperate opposition.

Neither of them give the man enough credit. He is more than that… and less.

He is the man for whom the stage was set… He had merely to show up on time, strut to the center, and pronounce the lines written for him.

 

Power to Coerce

What follows is not so much a rumination on the character of America’s chief executive, but on America itself… how it has evolved from a modest Republic into a global empire… and how the Greatest Show on Earth always seems to find its leading man – the one who will seize the limelight… and bring the house down.

Let’s begin by turning back to economist Milton Friedman and reminding ourselves why we are bothering to look at all.

We will see that politics and markets are linked – inversely. The more politics you have, the less markets seem to matter. Here is Mr. Friedman, writing in New Individualist Review:

The kind of economic organization that provides economic freedom directly… separates economic power from political power and in this way, enables the one to offset the other… Political freedom means the absence of coercion of a man by his fellow man. The fundamental threat to freedom is power to coerce, be it in the hands of a monarch, a dictator, an oligarchy, or a momentary majority.

The feds have the power to coerce. That is, they have guns… and they don’t mind using them.

Markets don’t like to be told what to do. When they are bullied, they take it badly. They dissemble. They lie. They dodge and feint… and double back to kick the bully in the derrière.

That is, even with a gun to their heads, they do what they’re supposed to do… They mediate between the gods and men… between what is and what could be… between the wonder-world of hopes and dreams and the real world as it is.

 

Grand Larceny

Today, in America, armed police power is probably a greater threat to your money than freelance thieves. Yesterday’s Washington Post:

A 64-year-old Cleveland man is suing U.S. Customs and Border Protection after agents strip-searched him at an airport in October and took more than $58,000 in cash from him without charging him with any crime, according to a federal lawsuit filed this week in Ohio.

Customs agents seized the money through a process known as civil asset forfeiture, a law enforcement technique that allows authorities to take cash and property from people who are never convicted or even charged with a crime. The practice is widespread at the federal level. In 2017, federal authorities seized more than $2 billion in assets from people, a net loss similar in size to annual losses from residential burglaries in the United States.

But these thefts are petty robberies. The grand larceny rarely involves the boys in blue uniforms. Instead, it is carried out by guys in suits. Author Allan C. Brownfeld:

No matter which party holds power in Washington, crony capitalism – the subsidization of private business with taxpayer funds – remains alive and well. Under our current political system, politicians – Republican and Democrat, liberal and conservative – have an incentive to raise the large sums of money needed to campaign successfully for office. To get those special interests with the needed funds to contribute to do so, these politicians do their bidding in return. These special interests contribute to both parties. Thus, no matter who wins, they have a friend in office.

And as author Steven Brill points out:

Money has come to dominate everything so completely that the people we send up to D.C. to represent us have been reduced to begging on the phone for campaign cash up to five hours a day and spending their evenings taking checks at fundraisers organized by those swarming lobbyists.

A gerrymandering process has rigged easy wins for most of them, as long as they fend off primary challengers – which ensures that they will gravitate toward the special interest positions of their donors and their party’s base, while racking up mounting deficits to pay for goods and services that cost more than budgeted, rarely work as promised, and are seldom delivered on time.

 

Flatter, Bribe, Threaten

There are some 20 registered lobbyists in Washington for every elected representative. And there are hundreds more influence peddlers.

They flatter, bribe, and threaten… all aiming to get the feds to use their police power to take something from someone else… and give it to them.

Elon Musk, continues Brownfeld, may or may not be a brilliant engineer. But he is master of the swamp fauna.

His business model depends heavily on tax favors and government contracts. Tesla spends more than $1 million per year lobbying. And it pays off.

The cars benefit from “$280 million in federal tax incentives, including a $7,500 federal tax break” per car. And SpaceX does 85% of its business with the feds.

As for Musk’s solar panel company, SolarCity, Brownfeld explains:

It has still not turned an annual profit despite receiving over $490 million in grants from the Treasury Department over the years, with the government covering 30% of its installation costs. Elon Musk may tell himself that he is engaged in capitalism but, in fact, he and the many other recipients of government subsidies and protection are really engaged in a form of socialism.

Socialism? Nah… more like late, degenerate empire parasitism. This is the show that’s playing now.

More to come next week… including what happened to all those nice people who wrote the last tax bill!

Regards,

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Bill

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June 1st, 2018

Posted In: Bill Bonner's Diary

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