- the source for market opinions


February 20, 2019 | How Mob Rule Comes to America

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.

GUALFIN, ARGENTINA – We are a-wandering… searching high and low… looking for ourselves.

Yes, that is what travel is all about: trying to find out who you are.


Rule of the Mob

And we begin by looking in our back pocket. There, we have a copy of Polybius’ history of what he calls the “Hannibalic Wars,” the wars between Rome and Carthage, in which the Carthaginian general, Hannibal, played a leading, but tragic, role.

Not much has changed. Polybius, circa 150 B.C., believed a noble republic inevitably degrades into a sordid spectacle of power grabs, intrigue, double-dealing, and lies.

“The masses,” he says, “believe they have a grievance against the greed of other members of society…” They will impose their will in the name of “freedom and democracy” but the nature of it will be “the worst of all, that is the rule of the mob.”

Polybius… if you’re listening… we would like to update you on the situation of the United States of America, circa 2019:

Today, the mob thinks it has been done dirty by the elite. It is right.

But it is unaware of how the dirty was done, and so, its efforts – on both sides of the political divide – are ineffectual, irrelevant, or deleterious.

On the right, Republicans believe tax cuts, walls, and trade deals are the winning formulae.

But the tide seems to have turned in favor of the left, where Democrats try to outdo one another with tax hikes, freebies and fabulous something-for-nothing schemes.

Mr. Sanders promises a higher inheritance tax.

Ms. Warren wants a wealth tax.

Ms. AOC (Alexandria Ocasio-Cortez) offers to soak the rich with higher income taxes.

And a New York Times editorial has urged outlawing billionaires altogether.


Bread and Circuses

And look what has floated in, among the flotsam, to the town of Stockton, California; it has its own plan to right the wrongs done to the poor. The Sacramento Bee:

After months of planning, Stockton, Calif., is sending debit cards loaded with $500 to a select group of residents starting Friday as part of a closely watched experiment in universal basic income, the first led by a U.S. city.

Stockton, once dubbed “America’s foreclosure capital,” was the largest city to seek bankruptcy protection before Detroit’s 2013 filing. During the recession, unemployment soared toward 20 percent, and violent crime rose. Today, one in four residents lives below the poverty line, according to the U.S. Census Bureau.

They won’t be the first to do the experiment. Rome, after Polybius’ death, fulfilled his prophecy.

It famously provided “bread and circuses” to the urban proletariat. Gradually, the sturdy farmers and independent yeomen who had been the backbone of the Roman army disappeared, replaced by slave labor and a dependent mob; the republic slid into the swamp of a degenerate empire.

Finally, the empire was forced to hire the foxes to guard the henhouse, enrolling the barbarians to garrison the frontiers.

We all know how that turned out.

More recently, Finland wanted to see what would happen when it gave residents a guaranteed income, no strings attached.

One hypothesis was that the extra money would be spent, thus encouraging businesses to increase output and hire more people. “Stimulus!” shouted the humbug economists.

Alas, the Finns were wasting their time and money. Giving to people encourages recipients to loaf.

Employment did not go up, the Finns reported last week.

Stockton is wasting its time and money, too. But why not?


Time and Money

And here, bear with us, Dear Reader. Here, let us pretend that trying to help people by giving them money actually does help them. (We know it often does not.)

But what are time and money for, if not to help others?

Suppose your daughter lived in Stockton. Suppose she was unemployed… and trying to support small children on her own. You’d be happy she got a little help, wouldn’t you?

Well, how about helping someone else’s daughter? Would you be willing to do that? In your own family? In your own hometown? In your own state… And your country? How about people in Syria? Or Bangladesh? Or Nicaragua?

What kind of person are you, Dear Reader?

Most people are willing to pay taxes to help “us,” but not “them.” Most think it is perfectly logical to stimulate “our” economy, but not theirs. And increasing employment in our city? county? state? country? But not theirs?

And some people are even willing to die for “us,” but certainly not “them.” Which, of course, only raises the question: Who are you?

And this is where our restless feet begin to twitch. All it takes is a glance around the world to see that the BS, claptrap and scams are fairly evenly distributed – the social welfare giveaways… the soak-the-rich taxes… the military boondoggles… the scammy currencies… the bogus budgets… the ersatz “stimulus”… the counterfeit programs to lift up the poor and cast down the rich…

…And then you begin to laugh… val-deri, val-dera… ha, ha, ha, ha, ha, ha…

…and become wobbly on the whole “us vs. them” proposition.

“To hell with them all,” you might want to say…

More to come…




STAY INFORMED! Receive our Weekly Recap of thought provoking articles, podcasts, and radio delivered to your inbox for FREE! Sign up here for the Weekly Recap.

February 20th, 2019

Posted In: Bill Bonner's Diary

Post a Comment:

Your email address will not be published.

All Comments are moderated before appearing on the site


This site uses Akismet to reduce spam. Learn how your comment data is processed.