Recently: Doug Casey: ExceptionAmongEquities
L: So, Doug, I forgot to ask last time, now that we have you back from the new spa you tried in Thailand, how was it?
Doug: This spa was different from the ones I recommended in our conversation on health. Purely detox oriented, with very interesting results that aren’t relevant to discuss here, except to say that I think the U.S. as a whole is headed for an uncontrolled, unmonitored, unprecedented, probably unavoidable, and most unpleasant detox experience.
Along these lines, consider what seems to be brewing in the Tea Party movement. It’s just a straw in the wind, of no real significance itself, but a foreshadowing of something ominous. All the false hope this Tea Party movement is creating impresses me as similar to what was going on in France in the late 1780s…
L: I think I can guess, but why do you say that? As much as you dislike the government, isn’t it a good thing that so many people are finally fed up with it and at long last are showing signs of willingness to throw the bums out?
Doug: Well, you know I don’t like making predictions, so I’m not prepared to say that it’s a terrible thing, but it’s at least a double-edged sword. Of course it’s nice to see that there are people out there who are unhappy with the status quo, with the so-called two-party system, and with the Republican party in particular. But the process of “throwing the bums out” has gone on since Day One, and it’s accomplished absolutely nothing. The system itself has degraded hugely. And more than ever before, government draws the absolute worst type of people and totally corrupts those who might be decent. That’s because government is so overwhelmingly powerful today.
L: Power corrupts, absolute power corrupts absolutely. But why the Republicans in particular? Isn’t the stupid party as bad as the evil party?
Doug: As you know, I’ve always distinguished them this way: the Democrats definitely don’t believe in economic freedom, but they say they believe in social freedom, while the Republicans definitely don’t believe in social freedom, but they say they believe in economic freedom. Neither believes in both — that would make them libertarians.
L: [Chuckles] So, it’s what they lie about that really distinguishes them. Or, more to the point, it’s not what they believe, or say they believe, that drives them, but what they don’t believe. Not what they value, but what they fear. It’s not love but hate that is the guiding principle of American politics.
Doug: Exactly. Like most of what we see in politics, it’s completely perverse. The only good thing about the Democratic party is that they’re at least consistent: they are collectivists and statists through and through. They are collectivists in what they say, and they are collectivists in what they do. That gives them the appearance of being more honest than the Republicans.
L: They may be crypto-communists draped in red, white, and blue, but at least they’re consistent?
Doug: Yes, but not the Republicans. They say they value freedom and the individual, but their actions give lie to those claims, and they give freedom a bad name. It makes you reluctant to use words like “free market,” when you have the likes of the hostile and mildly demented McCain, and the bent and clinically stupid Bush claiming those principles for what they do.
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L: Makes me mad. It adds insult to injury that Ronald Reagan got elected on essentially libertarian rhetoric — smaller government, lower taxes, getting the state off the little guy’s back, etc., and then signed appropriations bills that saw government grow by huge, then-unprecedented amounts. Many people today think the Reagan years prove that less government is a bad idea!
Doug: Remember what the Reagan team used to say, “If not us, who? And if not now, when?” As it turned out, it wasn’t them and it wasn’t then. The worst enemies of individual liberty are knaves that claim they’re for it but utterly betray it. And incompetents and ineffectual fools who say they’re trying to save freedom by increasing the size of the state.
L: Alas for Bartleby the scrivener. Okay, so back to the Tea Party, a sort of rebellion on the right, could this not push the center of debate in the right direction? A little?
Doug: It might, just as buying a $1 lottery ticket might make someone a zillionaire. The French Revolution also probably seemed like a good idea at the time, if only because it wanted to overthrow a totally corrupt ancien régime.
The problem with the Tea Party movement is that it has no underlying philosophical basis. Without that sound foundation, it’s either going to fail or transform into something really ugly. On average, Tea Party members know something is wrong. They’re disgruntled, and they want change. Not the Obama type of change — but what? You just don’t know which direction they may go, and there are some very disturbing directions they could end up taking.
L: Such as?
Doug: They tend to be thoughtless and reflexive. They conflate some muddled feelings of “tradition” with an actual belief system. They operate on a stimulus-response basis. They’re religious in exactly the same way as fundamentalist Muslims. And they’re hypernationalistic.
“My country, right or wrong.” “Support our troops.” That sounds good, until you realize they’re just a bunch of heavily armed kids who are blindly doing what they’re told in some fly-blown place they can’t even find on a map. The Germans supported their troops when they invaded Poland. “Us” against “them.” Wave the flag. That sort of thing. It’s like a gigantic replay of the Milgram experiment. It’s just another dramatization of collectivism and jingoism.
L: The one that really gets me, and not just from Americans but from people all around the world, is: “My country, right or wrong!” That means you’re willing to support what you know is wrong. It’s pathological.
Doug: And a complete abnegation of individual responsibility. It’s almost a Pavlovian stimulus-response type of reaction, more appropriate to chimpanzees around a watering hole than rational humans who can think things out for themselves.
The very strong, atavistic, religious streak to Tea Party types is a related danger. Glenn Beck is one of their standard-bearers. He’s always admonishing people to do things because God wants them to. That’s potentially very problematical — which god? Yahweh? Allah? Probably not Thor or Baal — but maybe it’s Jesus. What would Jesus do if he were in the CIA in Afghanistan? What does Glenn Beck think the Holy Ghost would advise? So many people claim to know what their gods want everyone to do, and if a god commands you to do something, I suppose you have no choice in the matter. But they can’t all be right.
L: Unless you happen to be Jerry Falwell or Pat Robertson. Then you have a phone on your desk that gives you a direct line to God. Like the Bat Phone in Commissioner Gordon’s office. It lights up when God calls. Beep, beep, beep…
Doug: Or like that other guy… was it Oral Roberts who said he’d had a vision of an 800-foot-tall Jesus who said that if someone didn’t give him $8 million, he was going to die? There’s very little difference in the mindset of the average Christian and the average Muslim. Each side sees the other as dangerous, fanatical, and misguided — and they can both be right about that. Things haven’t changed much since the days of the Crusades.
L: I remember hearing about Roberts — but there were so many TV-preacher scandals. And to heap insult upon injury, Jesus himself reserved some of his harshest words for hypocrites. To engage in the hypocrisy of preying on your own flock, in his name, is about as low as you can go.
Doug: I should make clear here that I’m not trying to make fun of religion, per se. I understand that when people are looking for some type of spiritual reality, they are hoping to find something that makes their lives more meaningful than a dog’s, or a chimpanzee’s… and that’s laudable. But parroting some demagogue’s aberrant thoughts or blindly following words written in a book don’t impress me as paths to enlightenment.
I’m not trying to invalidate any person’s beliefs. I’m simply trying to get them to take individual responsibility and not fall into group-think.
L: Like Mark Twain or Robert Heinlein, it’s not religion itself I’ve got a problem with but the big churches, which are human organizations run by fallible human beings, that I often have a lot of problems with.
Doug: Yes. I’m well known for being an atheist, but I’m actually quite sympathetic to looking for spiritual truth; there’s no conflict whatsoever there. I’m all for it — I just haven’t found any proof for any religion that I can accept, and I don’t accept things just because “it’s been written,” nor because everybody else does. I don’t want to delude myself. Just because something may sound comforting doesn’t mean it’s true.
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But that’s all a digression. The point is that it’s not just religion but a willingness to use the state to impose religious values on society that I’m afraid is a big element in the Tea Party movement. It can be fine for people to have personal values derived from their religions, but these people are coming together to look for political solutions to every real and imagined problem facing America today.
The fact that they are looking for political solutions to these problems is, itself, a formula for disaster. If they are successful, they will pass laws. And maybe, accidentally, some of those laws might do some goodu2014
L: [laughs]
Doug: u2014but most of them are going to be just like the laws being passed now: arbitrary, ill-informed, misguided, symptomatic of group-think, and ultimately destructive. They are simply legal manifestations of the psychological aberrations of the politicians who enact them.
L: Weakening the separation of church and state.
Doug: Exactly. If you view religion as the quest for a spiritual reality, I have no problem with it. But, very unfortunately, whether in Christendom or the world of Islam, in reality it amounts to thought control and enforced morality. There’s a real strain of “old time religion” in the Tea Party movement. I don’t think the men who signed the Declaration of Independence would approve.
And that’s not all; there’s also a bit of a class problem brewing in the Tea Party pot. To use an admittedly broad and somewhat nebulous short-hand, we can say there’s still a visible lower, middle, and upper class in America today.
The problem with the lower class is that their emotional level varies between desperation and apathy. Both are destructive forces, really bad. It’s why most members of the lower classes are cemented there.
And the upper class, their problem is a poisonous mix of arrogance, greed, and delusions of superiority.
I’m a fan of the middle class, made as it is of people who want to work hard, create and run businesses, move up in life, and so forth. When a country doesn’t have a middle class, it’s in trouble. So, it’s a good thing.
But, entirely apart from the fact the U.S. is rapidly losing its middle class — which is another huge problem — the American middle class today has a dark underbelly, and that is a deep and driving fear. For one thing, fear of losing what they have; that’s a fear that’s going to grow like a cancer as the Greater Depression gets worse. For another, fear of outsiders — Mexicans and Muslims, for example. They fear anything that may challenge or change their culture. Fear is the lowest common denominator of the middle class.
The Tea Party is a middle-class movement that channels this fear into the political arena — and politics always caters to the lowest common denominator. Fear is very dangerous, it can have all kinds of very nasty results. Fear causes people to act irrationally.
L: And fear is most dangerous when combined with its ugly twin, ignorance.
Doug: The result is self-serving myopia, of which there is plenty in the Tea Party movement. They want to cut spending — but not for their Social Security benefits. They want less government — but they want the government to protect or “create” jobs. They want to close the borders — forgetting that we’re all immigrants. They want a “strong national defense” — but they forget that fear has turned the U.S. into a paranoid “national security” state.
The bottom line is that the Tea Party is just a hodgepodge of discontent and grumbling. Tinged with some inchoate rage around the edges. It stands for nothing. It’s simply a reaction.
L: No bright side?
Doug: Well, it has caused a reaction in the Republican Party, where most of these people came from, which is starting to realize that they could be hurt badly by this division…
L: They could be outflanked on the right.
Doug: Exactly. So they’ve come up with a new “Pledge to America,” which echoes that ridiculous “Contract with America” that the Republicans came up with in 1994.
L: We sued to call that the “Contract on America.”
Doug: I’ve read it, and it’s the most stupid political blather that you could ever imagine. The 1994 Contract was basically meaningless and unenforceable verbiage. It centered on making technical changes in the way Congress was run. Its net result was zero. Its lasting effect is that things are much worse today and destructive policies much more ingrained.
L: I just googled the new one, and here are the actual pledges:
- We pledge to honor the Constitution as constructed by its framers and honor the original intent of those precepts that have been consistently ignored — particularly the Tenth Amendment, which grants that all powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.
- We pledge to advance policies that promote greater liberty, wider opportunity, a robust defense, and national economic prosperity.
- We pledge to honor families, traditional marriage, life, and the private and faith-based organizations that form the core of our American values.
- We pledge to make government more transparent in its actions, careful in its stewardship, and honest in its dealings.
- We pledge to uphold the purpose and promise of a better America, knowing that to whom much is given, much is expected and that the blessings of our liberty buoy the hopes of mankind.
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“To whom much is given, much is expected” — sounds like the communist dictum of “from each according to his ability, to each according to his need.”
Doug: It may be worth deconstructing both the “Contract” and the “Pledge” in another conversation. But while the Pledge pushes a few gratifying hot buttons, it’s essentially wishful thinking. And outright lies. It’s as I’ve been saying, a mixture of religion, fear, and atavism.
The first one about the Constitution (which is a flawed document but defines a much better government than the one America suffers under today) sounds like a step in the right direction. But remember, these are Republicans — a bunch of unprincipled, shameless liars motivated only to feather their own nests. You can’t believe anything they say. At least you can believe the Democrats: they overtly promise to collectivize the U.S., and you can trust them to work hard in that direction.
L: Even Reagan, the great orator who might actually have believed some of what he said, couldn’t get the GOP to deliver on their promises. What chance do these Tea Partiers have of forcing the Republicans to do what they say they will do — if that can even be defined meaningfully?
Doug: Slim and none, and Slim’s out of town.
L: So, in sum, it’s a good thing that people are finally getting pissed off enough to rise up, at least a little, but being against something bad doesn’t make you for something good.
Doug: It’s as laughable as the fascists being against the communists. And this isn’t the first time. Remember the Constitution Party? I think it still exists, but it’s been an abject failure, because, I think, all they really had was a name that sounded good. They had no principles and didn’t even understand the original Constitution has been interpreted out of existence. The Libertarian Party, too, I have to say, seems to have lost its internal gyroscope. They want to be big and successful now, hooking up with mainstream names like Bob Barr. It’s basically a bunch of losers and wannabes.
L: So much for “the party of principle.”
Doug: This is inherent in politics. Unfortunately, there are no political solutions to political problems (see our conversation on anarchy).
L: Rent seeking pretty much precludes that. But let’s back up a minute. You said earlier, somewhat tongue in cheek, that a successful Tea Party might accidentally enact some laws with positive consequences. I would guess, for example, that a lot of them are hard-money advocates. If they could actually gain the upper hand or become the swing-vote that forces the Republicans to accept some of their demands, they might get the dollar put back on the gold standard. That’d be a big step in the right direction, wouldn’t it?
Doug: That’s possible, but the only way we can make progress, at this point, is not by passing more laws — even ones you and I might think are marginally good ideas — but by repealing the laws that have already been passed. That would allow the free market to correct the economic distortions all these years of government meddling have created, as it should.
The problem, fundamentally, is that people keep on looking to the government to solve their problems. So they come up with a new party or a new movement, and they propose new laws. This is not just the wrong approach, but the exact opposite of the right approach. The only way to get back on the right track is to undo the expansion of government and interference in the economy we’ve seen over the last 100-plus years. Repeal the laws, abolish the agencies. Get rid of it all, and free to the market to administer its harsh but effective treatments.
Instead, these people just want new and different laws. The prognosis is not good.
L: But… that never happens. Well, George Washington could have been king, and I’ll always respect the fact that he declined, and the government still got larger. Leviathan never willingly relinquishes power.
Doug: No, it doesn’t. It’s exactly analogous to a cancer. That’s why I keep saying that things will get worse than even I think they will. If we have a conversation on this subject a year from now, I expect we’ll be in the midst of real crisis and chaos such as few Americans can even imagine today.
L: Heavy stuff again, Doug. If America is beyond the point of no return, as you say, the whole world economy is in it up to its neck as well. And the investment implications…
Doug: As I’ve said before: liquidate, consolidate, speculate, and create.
L: And diversify your political risk.
Doug: Definitely. It’s well past time to prepare for the day when you’ll need to get out of Dodge, fast.
L: Well… thanks for another sobering assessment.
Doug: You’re welcome. It may not be pleasant to face the facts sometimes, but they are still facts; you either face them or face the consequences of ignoring them.
Politics and the economy are now almost inseparable, and as Doug says, you’d do well to protect yourself from the fallout that is sure to follow the Fed’s “nuclear option” of launching their “Quantitative Easing 2” plan. And the investing crowd is starting to wake up to his warnings to buy gold and gold-related investments.
At the upcoming Casey’s Gold & Resource Summit, some of the world’s foremost experts are gathering to discuss our economic future and the best safe-haven and profit opportunities, as well as specific stock picks that will survive the blast. And you can hear everything they say — in more than 17 hours of audio on CD. Act today and save $100! More details here.
