Eat the Rich

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Recently by Doug Casey: Government Is a Monopoly ofForce

     

L: I’m sitting in Doug Casey’s living room, in Cafayate, Argentina, far, far from Wall Street, which is being "occupied" by protesters with a very clear message. Doug, as a prime cut of meat on the "eat the rich" menu, would you like to respond?

Doug: I assume you’re being sarcastic about the clear message, but one can never tell in today’s world. Otherwise, I would have thought Paul Krugman was joking when he said that a pretend alien invasion would be good for the economy. We increasingly live in an Alice in Wonderland world.

L: Truth is often stranger than fiction. We’d have been laughed at if we’d predicted that people in Spain would shine lights on solar cells at night, because the subsidies make it profitable to do so.

Doug: Indeed. But back to Wall Street. I have very mixed feelings about the occupation movement, because these people are 100% correct to be angry about these banks – from Goldman Sachs on down – that received scores of billions of dollars of taxpayers’ money after doing the opposite of what banks are supposed to do (losing money instead of keeping it safe), and then paying themselves bonuses for doing such a good job.

L: It’s actually the largest bank heist in history.

Doug: You could say that. Was it Al Capone who said that one accountant with a pen can steal more than 100 thugs with guns? A central banker like Bernanke can facilitate the looting of an entire country, though. You might also say it’s the Chinese whose money they stole, because the Chinese will never be able to redeem their long-term Treasuries for anything like the value they put into them. You could also say it’s the next generation’s money, because they’re going to have to pay for it all. No wonder so many young people are outraged – they have a right to be.

L: But…?

Doug: But on the other hand, a lot of these Occupy Wall Street (OWS) people seem to be of the same sort who would have been loosely wrapped hippies back in the ’60s. I was also sympathetic with the hippies in many regards, by the way, because I agreed with their anti-war and anti-drug-law stances. It’s hard, however, to see these people as allies when one of their most popular slogans equates me to a beef cow. They seem to have a strong collectivist/socialist animus. They seem to hate the 1% just because they have money. They don’t have the sense to make distinctions as to how different people might have gotten that money.

I am, clearly, one of the 1%. So are you. In fact, almost everyone who has worked hard, saved money, and not invested it unwisely is at least in the top 10%. What the OWS people are angry about – or should be angry about – are the people who made their money through government contacts, or connections. They didn’t produce anything; they’re really just sophisticated thieves. I have only contempt for those who feed at the public trough.

But here we are in one of the nicest places in the world, where I’m living high off the hog, smoking an expensive Cuban cigar – that’s probably a waterboarding offense in the US these days – so I guess that puts me on the menu.

However, I haven’t yet been to one of these protests to speak with any of these people, so maybe I shouldn’t presume too much about what they think. It’s likely their level of discourse would be no more cogent than what you read in the New York Times, perhaps even less cogent than USA Today. But I don’t like to be around angry people – although, to be honest, I’m angry myself because I hate to see what’s left of America, and Western civilization itself, on the skids…

L: I haven’t talked to any of the OWS people either, but, not wanting to rely solely on hearsay, I sent someone to the epicenter in Manhattan. We asked people there: "What does Occupy Wall Street mean to you?" I published the results in the current edition of the International Speculator. Here are some of the more comprehensible quotations:

"The 99% are getting more distribution. Corruption in government. Peaceful overthrow."

"There are people who have a lot of money and then people with nothing. I’m a student, and I don’t want my future to be the way it is now. Make the country equal again."

"If something is not right, do something about it! Inspire unity. Everyone knows something is wrong."

"Mad at bailouts. Very little difference between political parties. [Everyone] knows Democrat = Republican! Lockheed Martin makes money from taxpayer-funded wars. Gold standard! Bitcoins! Disenfranchise the 1% plutocracy. Root out corruption."

"I don’t have my clear answer for this."

One of the interesting things about this is that there’s a clear streak of very strong anti-government sentiment from people who usually can’t get enough government. Granted, they don’t necessary call for less government, but they do seem to want to throw the bums out. All of them. Except maybe Ron Paul.

Doug: That is interesting, and I think it’s also interesting to compare the movement to the Tea Party. Both groups feel powerless, disenfranchised, and betrayed. Both groups are under severe economic pressure – which, I promise, is going to get much worse.

L: I hadn’t thought of that, but in spite of the ideological differences, I can see a similarity in that both are angry with the status quo but not clear on what they propose to improve on it.

Doug: Exactly. It’s a very inchoate kind of anger. Most of the people involved, in both groups, seem to have zero understanding of real economics and don’t understand the way the world works. They just correctly perceive that they’re getting screwed. But I see little or no cultural or sociological overlap between the groups.

L: Well, I haven’t been to a Tea Party event, nor have I sent an investigator to one, so I’m not in a position to compare them, but it is interesting to me how diverse the OWS people are. There were people there in favor of Ron Paul, as well as for typical New-England Democrats. One fellow even mentioned the gold standard. On the other hand, one photo I didn’t publish – because the guy’s face is clearly identifiable – is of a young man sitting on a cinder block, smoking marijuana… so the neo-hippie component does seem to be part of the mix.

Doug: In the photos I’ve seen, a good number of these protesters have taken to wearing Guy Fawkes masks, which I find encouraging. And here we are on the fifth of November: "Remember, remember, the fifth of November, the gunpowder, treason and plot. I know of no reason it should ever be forgot." My avatar on Facebook, Skype, and other such venues is always a Guy Fawkes mask. I’d love to see everyone use one. That’s how things ended in the movie V for Vendetta.

L: But that’s just the thing: To you and me, a Guy Fawkes mask is a symbol for anarchy as a better organizing system for society than government – any government. But for many, the mask is just a symbol for resistance to tyranny. To some, it may not represent much at all, besides appropriate attire to wear during a riot.

Doug: Yes, and regrettably, in real life Guy Fawkes was something of a Catholic fanatic who apparently just wanted to replace a Protestant-dominated government with a Catholic-dominated government. That’s hardly a solution. It overlooks the real problem, which is government itself, sticking its nose into every aspect of human existence.

L: So, here we have a movement, composed of very different people from different walks of life, that has gone viral, spreading all across the US, even to smaller towns. It has spread overseas as well and has turned violent in some cases, with mass arrests in Oakland being a recent example. This could get pretty ugly. This is how revolutions start – we’ve seen this sort of pattern in the Arab Spring, as well as in the fall of Eastern European dictators, and more. But starting a revolution with no clearer goal than "eat the rich" is… a dangerous thing to do.

Doug: It may sound rather extreme –

L: Not that that has ever stopped you…

Doug: [Chuckles] – but I don’t think it’s out of the question that there could be a second American revolution ahead.

L: A third – the war between the states being a failed attempt at a second one.

Doug: Right. Formal or informal, there could easily be a secession movement as things come further and further unraveled. And yes, it could turn into a shooting war. These things happen. A lot of Americans are getting to the point where they feel they have little to lose. And things are just starting to get bad; the Greater Depression is still very young.

You know, the Obama administration is making noises about a rising threat in Iran. They might just be tempted to attack them, either as a great distraction from troubles at home or in the hope it might unite America – which, incidentally, I think would be a bad thing at this point. It would be like uniting lemmings as they plunge over a cliff together. Being united amounts to groupthink; it caters to the lowest common denominator. Uniting around a political leader is a symptom of moral bankruptcy. What made America great was individuals thinking and acting as individuals.

L: On the plus side, there was also an anti-war streak in the people we surveyed occupying Wall Street.

Doug: That’s true in the Tea Party too, although to a lesser degree. But on the minus side, we have large numbers of people in uniform in the US – lots of police and soldiers – who have been trained to obey orders without hesitation. Just like everywhere else in the world, men in uniform are extremely dangerous. They’re loyal above all to their peers in uniform, secondarily to the government that pays them, and last to the people their supposed to "protect and serve." If Americans in uniform are ordered to beat and imprison American citizens petitioning their government for redress of grievances, they will obey. It could get very, very ugly.

L: If there’s an insurrection with no goal other than to overthrow those in charge now, it seems like an invitation to "the man on the white horse" to come in and lead everyone boldly into a new slavery. This bubbling cauldron of anger is like a lit stick of dynamite. Who knows who’s going to pick it up and where they’re going to throw it?

Doug: It has to end badly. Every revolution I’m aware of, including the American revolution, leads to a period of things getting worse before they get better – if they get better. The French revolution is a classic case, in which it was good they got rid of Louis XVI, but then they got Robespierre, and then they got Napoleon, who was even worse. This is the standard pattern; revolutions unleash the most violent and fanatical people to rise to the top. So, if the trend continues, I don’t expect it to have a happy ending.

L: And do you expect it to continue?

Doug: Unfortunately, yes. The economy is going to continue getting worse. People are going to become much more unhappy, and they are going to feel like they have much less to lose. Trends in motion tend to stay in motion until they reach a genuine crisis.

L: Whether OWS is the beginning of the violent end to this saga, or whether this calms down and its something else in the future, is there no way out for the US?

Doug: No. Partially because it’s really no longer the US. The country has already changed in character from being a unique beacon of individual liberty to just another of 200 degraded nation-states. It’s hopeless to wish for an easy out, not just for the US, but for America, the West, and the current economic order in general. Even though I’m an unabashed optimist about the long-term future, I just don’t see how things can avoid getting much, much worse over the next decade or so. This is barely a beginning – we’re just at the leading edge of the storm, as we exit the eye of the global crisis hurricane.

Here’s a thought. With very few exceptions – like Lyndon Johnson – most incumbent US presidents run for a second term. But as unpopular as he has become, some recent recovery in the polls notwithstanding, it may be that the Democrats will ask Obama not to run. I suspect they might pick some left-wing general instead, because people would have confidence that a general would know what to do about an increasingly dangerous world. And with the Republicans seemingly determined to nominate a hack who’s devoid of any philosophical core – well, there are Ron Paul and Gary Johnson, but they’re getting a total media blackout – such a Democrat might just win… and that would be very bad. Then we’d really be in for it – a warmongering socialist who might try to turn the country into an Army boot camp. At that point I’ll be really glad I have a crib outside the US.

L: Mr. Cheerful again, Doug.

Doug: You know I call ‘em like I see ‘em. I don’t make the rules, except in my personal life.

L: Right. Investment implications?

Doug: Nothing new. We’ve been saying for some time to rig for stormy weather; buy gold, buy silver. They are not at giveaway levels, but they’re going a lot higher. With the Fed creating trillions of new dollars – which they have to do to finance these trillion-dollar and rising deficits – there will be new bubbles. The most obvious one is going to be the bubble in gold stocks we haven’t seen yet this cycle. Gold stocks are actually quite cheap now, relative to gold. I’m more enthusiastic about the potential for gold stocks to go into a huge bubble than I ever have been.

L: That’s a change in tune.

Doug: It is. These stocks didn’t look cheap a year ago, when the market was more driven by greed. Now, in a fear-driven market, there are actually some good bargains out there – you cover many of them in the International Speculator.

L: Thanks for the shameless plug. But then, I don’t think I’ve ever seen you ashamed of anything.

Doug: Shame is not an emotion I have a lot of experience with, it’s true. That’s because I avoid doing things that would make me feel shame.

L: Anything else?

Doug: I like quality energy plays on the dips and productive agricultural land a lot. Great new technological innovations, especially those that save people money, should also do well in the deepening crisis.

L: Okay, Doug. Thanks for another thought-provoking conversation.

Doug: My pleasure, as always.

Doug Casey (send him mail) is a best-selling author and chairman of Casey Research, LLC., publishers of Casey's International Speculator.

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