Mel Gibson has made a fortune over the last week because
of his ability to orchestrate the greatest negative-response
marketing campaign in movie history. I call it the "Raspberry
Concerto in F-Major." He got liberals to foam at the
mouth in print. Tens of millions of people have paid $8
to find out what the fuss is all about. I want to find out
how he did it.
give me some help. Go onto Google or some other search engine
and do a search for "The Passion" "review,"
"violence," "anti-semitic," and any
other negative words you can think of. See what you can
find after page 5. If you find some really juicy hatchet
job, please send me
live in a fantasy world. This fantasy world is going to be destroyed
by economic forces that are already well-established.
It is easy
for readers to think, "He’s talking about the other guy."
Maybe I am, but if you are doing essentially what the other guy
is doing, then I’m talking about you.
no longer save. They spend. You have read this over and over,
but has it registered? Really?
of your after-tax income do you save each month? Do you have an
automatic thrift plan with your employer? Do you ever touch the
money? You should have a monthly automatic paycheck deduction
plan unless you are so well disciplined that you have budgeted
all of the money in advance, including the thrift portion. Not
many people are sufficiently self-disciplined to do this. They
have this or that emergency that just happens to pop up before
the money is deposited into the savings account.
It is the
determination to save that marks the successful person. I am not
persuaded that the successful person is made successful by a savings
program. He is successful because he has determination to spend
less than he earns, every month, no matter what. It is this unbreakable
dedication to sacrificing a portion of the present for the sake
of the future that marks the successful person. It is a mind-set.
It is this self-determined, self-disciplined program — a
systematic savings program — that marks the person who has
the ability to become a success. This personality trait affects
everything he does. He is future-oriented. He is therefore upper-class.
position is established by your view of time, not the money you
own today. If you are future-oriented, you are upper class. If
you are present-oriented, you are lower class. Your present wealth
testifies to what you are. It does not determine what you are.
Don’t mistake the evidence for the cause.
person is not successful because he saves. He saves because he
has the personal characteristics that produce success. Saving
is not the cause. It is the sign that the person has one of the
crucial personal characteristics of success.
man who saves at least 10% of his after tax income from the day
he gets his first job possesses the mark of success. This self-discipline
must be taught. It does not come naturally for most people. A
young man doesn’t emotionally know that if he doesn’t save for
his old age, he will be in dire straits. He may become dependent
on his children. To think that a 12-year-old is motivated by such
a vision of the future is nave. Ben Franklin said it best: "A
child thinks that $20 and 20 years cannot be spent." Children
are not future-oriented. Present-orientation is one of the primary
marks of a child. Children are also not independent. Others make
their decisions for them. That is the primary mark of a child.
today are a nation of children. We can see this in their savings
habits. We can also see it in their voting habits.
the rate of thrift rises. People get scared. They worry about
losing their jobs. They recognize that they are vulnerable. Like
the overweight person who finds that his clothes are too tight
and who thinks, "I must start dieting today," so is
the spendthrift in a recession. He can no longer put off a savings
program, he thinks. He must begin saving. So, he does.
the overweight person who loses 20 pounds and whose clothes again
fit, the saver is tempted to go off his budgetary diet. The money
seems good. The job seems safe. He stops saving.
You can chart
recession years by looking at the sharp increase in the national
savings rate. You can also mark the period of the recovery. The
savings rate drops.
In the most
recent recession of 2001, the savings rate never went over 4%.
In previous recessions, it has gone over 8%. Today, it has fallen
back into the 1% to 2% range. The recession has had no lasting
effect on people’s willingness to sacrifice present enjoyment
for the sake of future security and income.
point of view of the return on savings, I can hardly blame the
American public. The Federal Reserve System pumped in so much
money in 2001 that it drove the short-term interest rate from
over 6% to about 1%. Meanwhile, the rate of price increases was
over 2%. After income taxes and the decline of purchasing power,
a person with a passbook savings account or money market fund
went in the hole. He had a negative return on his money. That
means that his sacrifice of present enjoyment of spending the
money left him poorer. Then why save?
When he loses the willingness to save, this affects his outlook
regarding the future. He consciously decides that the payoff of
self-denial today is a losing proposition. He concludes that the
system is rigged against him in his capacity as a saver. He is
correct: the system really is rigged in favor of the spender and
When a recession
hits, Keynesian policies of deficit financing are adopted by the
Federal government. The central bank starts buying government
debt with newly created fiat money. The government and the central
bank adopt policies that are disastrous for individuals to adopt:
reduced saving, more spending, more borrowing.
is so utterly ill-informed today — as ill-informed as Keynesian
economists — that people mimic the state. They spend. They
take on consumer debt. In the 2001 recession, they bought homes
and new cars. This, we are assured by government economists, was
a good thing. The consumer did not falter. The consumer spent
the country into prosperity.
This is the
essence of the Keynesian economic solution to recession: spend
yourself (and the nation) into prosperity. Keynesians apply this
principle to government spending because they believe that consumers
are slackers when it comes to spending during a recession. There
is insufficient demand. Demand — spending — is the key
to recovery — not thrift (a negative), not reduced wage rates
(a negative), but spending. So, the government must pick up the
slack. It must also encourage the public to follow the leader.
This is a
child’s universe. The child falls down and scrapes his knee. He
runs to his mother to get her to make the pain go away. His mother
will fix it! Two minutes before he fell down, he may have resented
his dependence on his mother. He wanted to be a big boy. But when
big boys fall down, they don’t run to their mothers. He is not
ready to be a big boy after all.
have bought the Keynesian party line. They believe that self-discipline
is not the way to success. They believe in the state as mother.
So, we live under the watchful eye of the nanny state. That is
what most Americans want. They vote for politicians who refuse
to cut back on government spending. The state grows ever larger,
and so do its promises.
We have again
seen the rate of thrift fall to about 1%. We have seen the Federal
government’s percentage of the economy rise to 25%. These phenomena
are the result of the same mind-set. As surely as the determination
to save is related to the determination to become independent
economically, so is the determination to take on consumer debt
to buy depreciating assets linked to the determination to find
someone else to solve life’s economic problems. "Make it
economy falls down and goes un-boom, the voters run to the government.
"It hurts. Make it better." What snookums needs is a
cotton swab drenched in alcohol. "This is going to hurt."
Response: "No! Don’t!" The child wants the hurt to go
away now. He doesn’t want what is necessary to solve his problem
— his real problem. He doesn’t know anything about infection.
He knows only that his knee hurts and he wants mommy to make it
however, mommy has to be re-elected at regular intervals. Mommy
is not secure in her high office. So, she promises never to use
that nasty old alcohol. She will kiss the wound and make it well.
In doing so, she will increase the risk of infection.
John Maynard Keynes persuaded politicians that what they wanted
to do — increase spending without raising taxes, and therefore
increase the national deficit — is economically sound policy,
the politicians have become incorrigible spendthrifts. They want
to be re-elected, and a slack economy is their own scraped knee.
So, they run to the central bank. "Kiss it and make the pain
go away." The central bank obliges. It creates money. The
supply of money goes up. This tends to lower the price of money
— the interest rate — in the recession phase. The result:
the destruction of a positive economic return for savers, after
taxes and price inflation.
that what is rational for the individual during a recession —
increased thrift — is bad for the economy as a whole. To
cut expenses personally is self-defeating nationally, says the
Keynesian, even if he calls himself a supply-side economist, a
monetarist, or an Austrian economist. If his argument is that
thrift and cost-cutting are good for the individual but bad for
the economy, he is a Keynesian. He is denying the heart of free
market economics, from Adam Smith to the present. He is saying
that rational individual self-interest not only fails to coordinate
the economy, it is bad for the economy. This assumption is the
heart, mind, and soul of anti-capitalism, from the old mercantilism
that Adam Smith refuted to the new mercantilism in its various
incarnations. Most economists share the same faith in government:
"The free market needs the government to kiss it and make
it not hurt any more."
This is the
child’s universe. The West has entered its second childhood. It
has become dependent on government to provide fiat money. America
has become dependent on Asians to supply us with loans and capital.
The problem now facing Americans is that Asian investors in the
second half of 2003 dramatically reduced their rate of investing
in the United States. What appears to be Asian investment today
is in fact Asian fiat money. The Japanese central bank and the
Chinese central bank are in high gear. They are keeping the dollar’s
value high by inflating their own currencies and buying U.S. government
debt. This is Asian mercantilism. "What is bad for individual
investors — monetary inflation — is good for the export
If the world’s
central banks were ever to stop creating money, the malinvestments
which their low interest rate policies have created would be exposed
by the capital markets as misused capital. The capital markets
would fall like a stone. The West’s central banks have undermined
thrift, and what little thrift remains is lured into projects
that cannot be sustained apart from the illusion provided by even
more fiat money.
state has kissed the nasty scrape, and in doing so, has infected
it. The voters cry, "Make it stop hurting!" They never
is now in its second childhood. It refuses to do what is necessary
to grow up: reduce taxes, increase thrift, pay off the national
debt, and stop creating new money. This can be done, but it won’t
be done. To do it would hurt. "Make it stop hurting!"
the young adult immigrant to America in 1912. He came to America
because of America’s opportunity. What opportunity? To escape
the grasping hand of government.
He had no
future in his homeland. He thought he might have a future here.
It was that hope of a better life that motivated him to do what
few people will ever do: leave the homeland.
movie I have ever seen about this is Elia Kazan’s semi-autobiographical
film, America, America. It is about a young Greek who no
longer wants to live under Turkish rule. He has seen his Armenian
friend and his friend’s family murdered. The movie takes place
beginning in 1915, the year that the Armenian genocide began.
The Turks killed about a million Armenians. The world ignored
this. The world was busy fighting World War I. The Germans were
allied with the Turks. They did not care. The English assault
failed at Gallipoli, so they were unable to do anything about
it. After the war, it was all officially forgotten.
In the movie,
the Greek does not forget. He is willing to do anything to make
enough money to buy a ticket to America. This corrupts him. The
movie becomes a story of his willingness to sacrifice morality
and those around him to get his hands on that ticket — literally.
The scene where he gets his hands on the ticket is a classic.
The movie ends with him in New York, working as a shoeshine boy.
"Next, please. Who’s next?" I saw the movie over 40
years ago, and I can remember scene after scene. It made a deep
impression on me.
The narrator — Kazan — says
that young man eventually makes enough money to pay for his family
to come to America — all but his father. His father died in the
save. They work long hours, and they save high percentages of
their income. They are motivated to succeed because they are motivated
to survive. No one guarantees them anything. Anyway, no one did
in America in 1912.
States government has made American taxpayers work overtime to
undermine the immigrant’s mind-set. The state has set up welfare
programs for the poor, including the illegal immigrant. It is
illegal for states to refuse to educate the children of illegal
immigrants. It is illegal for hospitals that receive Federal funds
to refuse treatment of the poor, including illegal immigrants.
Naturally, the state is even more generous to legal immigrants.
government’s economic policies are based on a child’s view of
cause and effect. The immigrant who arrives, hoping to get a better
life, is encouraged to adopt the Keynesian view of adulthood,
which is in fact the child’s world of permanent dependence and
deferred pain. Soon, the immigrant is crying out to the nanny
state, "Make it stop hurting."
It is more
important to save than it is to save wisely. The discipline of
thrift is more important than the avenue of thrift. It is not
your wisdom in picking an investment portfolio that will make
the highest return that will make the difference when you can
no longer earn a living. Rather, it is the mind-set that led you
your mind-set, you must change your behavior. What this country
needs — what the West needs — is Spendthrifts Anonymous. There should
be a 12-step program for people who have been on a 20-year spending
binge. We call a long period of drunkenness a bender. An Alcoholics
Anonymous member is supposed to admit to himself and others that
he has been on a bender. Well, the nation has been on a spender.
is, it usually takes a moment of truth for a drunk to recognize
what he has become. He must see the future, and he must conclude,
"Booze is going to kill me." He must stop drinking immediately,
while his clarity lasts. He must immediately move from a marginalist
mind-set — "fewer drinks" — to an absolute mind-set: "no
drinks." The marginalist mind-set will kill him, because
once he takes a drink, he cannot control his drinking. He will
move from a marginal drink to a bender.
saver must act at the margin. He cannot go cold turkey. He must
live in the present. So, he must spend. But this nation is so
far down the road to bankruptcy — massive, irreversible debt — that
unless we, as a people, reverse our spending and start saving,
then we are going to wind up like the drunk who wants only one
more drink. We are going to wind up in a gutter. One drink at
a time, the drunk consumes his future and then his present. One
consumer debt at a time, an individual does the same thing. So
do collectives that pursue the same policy of immediate consumption
at the expense of future consumption.
state today goes looking for injuries to kiss. The voters need
to tell the state exactly what it can kiss. But the voters never
is not going to end well for most people. I hope it ends well