Investment Rarities Incorporated
History |  Q & A  |  Endorsements  |  Portfolios  | Flatware | Gold Coins  |  Silver Coins  |  Contact |  Home

Products

Jim Cook

 

RUNAWAY SOCIAL SYMPATHY

Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

..Read More »

The Best of Jim Cook Archive

 
Best of Bill Buckler
May 17, 2012
archive print

Consider the plight of the poor Greek politicians.  Like most politicians in and far beyond the continent of Europe, they have long taken the running of their nation for granted.  Greece used to be known as the cradle of western civilisation.  In more recent times, it has become known as the cradle of “democracy”. The implication is that you can’t have one without the other.  In this context, the Greeks have been “civilised” for a very long time.  Again in this context, they have long since become adept at milking the system while not paying for it.  Like their counterparts in Italy (Greece’s successor in the task of “civilising” the world), the Greeks are masters at not paying tax.  In both nations, it is a national sport.

There is a problem with this, as articulated by Thomas Babington Macaulay more than 150 years ago: “A democracy cannot survive as a permanent form of government. It can last only until its citizens discover that they can vote themselves largesse from the public treasury. From that moment on, the majority (who vote) will vote for those candidates promising the greatest benefits from the public purse, with the result that a democracy will always collapse from loose fiscal policies.”

Today, the difference between Greece and most of the other “democracies” in the world is that Greece has already collapsed from loose fiscal policies.  Specifically, it has collapsed on the heads of those who have for generations become used to “voting themselves largesse from the public treasury”.  Like their counterparts all over the world, the Greek people have been offered no reason why the blow has to hit them and NOT those in control of the public treasury.  They have simply been told that the system MUST survive because there is nothing to take its place.  They don’t believe it, but they see no alternative.

In desperation, they have called a plague on Greek politics.  The Greeks have discovered that ignorance is not bliss.  They have not yet discovered that their masters count on their ignorance.

Awaking From A Long Sleep:

The problem faced by the Greek voters in their recent election is that a horrible (to most) truth has now dawned on them.  After having their cake and eating it too for generations while living sanguine in the idea that the bill would not be presented until they were “all dead”, they have awakened to the bill being presented NOW, when they are still very much alive.  Instead of installing spotlights all around their Acropolis, the Greeks should have studied their own history.  Macaulay certainly did, as witness his analysis of democracy quoted earlier.  Greece is the cradle of democracy.  The problem is that its fist major democratic leader, Pericles, ruled more or less uninterrupted for more than 30 years until his death in 429 BC.  A century later, the Athenian democracy was officially suppressed by Macedon, after Athens had been involved in increasingly disastrous wars for most of the intervening period.

The Greeks found out earlier than any other Western civilisation that wealth cannot be created by voting any more than it can be created by despotic or tyrannical authority.  But like the rest of Western civilisation, they have forgotten the lesson.  Alcibiades, the Athenian leader during the rolling crises of the Peloponnesian Wars, would have no trouble recognising the ferment in modern Greece.

The Greeks want a currency that retains its purchasing power but don’t want a government which lives within its means.  They want to be able to borrow money but don’t want to discipline themselves to service and repay the loans.  They want to continue in the pretense that the government “services” they have grown to take for granted really are “free”.  They don’t mind who has to pay for it all, as long as it isn’t themselves.  In all these attitudes, they are little different from most of the people everywhere else.

In a democracy, most of the people who vote choose those who make ALL of the rules.  As long as the costs of the welfare state (without which modern democracy would not function) can be ignored and/or suppressed, elections don’t matter very much to very many.  In Greece, these costs are still being suppressed for the political and banking establishment as they are all over the rest of the world.  But they are no longer being suppressed for the Greek people who are being crushed under the efforts to save the system.  Their reaction has been played out throughout history, not least Greek history.  They are turning on those who assured them that the system would “work”.  Doing that is much easier than stopping short and facing the fact that you have been a dupe for the “powers that be” all your life.

Like the Greek voters, the rest of the world knows that what happened in the Greek elections and the instant effect it had on global markets was inevitable.  Like the Greek voters, the rest of the world didn’t want to actually acknowledge the inevitable.  They still don’t - even while it is happening right in front of their eyes.  On May 8, the New York Times published a piece with the headline: “Few Options If Europe Turns Away From Austerity.”  In the article, the dilemma of Greece now and the rest of the world very soon was put in succinct detail by a US fund manager: “It’s very easy to abandon austerity measures because they are painful things to do. It’s much tougher to figure out how to grow an economy.”

Figuring out how to grow an economy is an exceedingly easy thing to do.  It merely requires living within one’s means, saving the surplus and investing it in new, better and/or more efficient means of wealth creation.  That process has been known and followed for thousands of years.  Prehistoric herders did not grow rich by depleting their herds and prehistoric farmers did not increase their “economic growth” by eating their seed corn.  They would have laughed to scorn anyone who tried to convince them that this is possible.  The problem today is that the purveyors of these nostrums are not laughed to scorn, they are elected to office, appointed to run central banks or given Nobel prizes in economics.

 “Growing” an economy is difficult if most of the means to do so have been cut off.  It becomes daunting indeed when the institution which claims to safeguard the wealth of the people does so by draining that wealth.  It becomes impossible when the realisation has dawned that the seed corn has gone.

 

 

 

.Ó 2009 – The Privateer

http://www.the-privateer.com

capt@the-privateer.com

(reproduced with permission)

SUBSCRIPTIONS:

Delivery via email

Trial: 5 issues (once only)

Six-Month: 12 issues

Annual: 25 issues

Two-Year: 50 issues

Subscribe at www.the-privateer.com/sub.html