Ending Action: Financial And Political

Reckless mania of today’s socialists

By —— Bio and Archives--February 11, 2019

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Reckless mania of today’s socialistsIn the financial and commodity markets a frenzy of speculation runs until exhaustion. And frenzy is the right word as soaring prices become irresistible, whether the action is in stocks, bonds, or commodities. The crowd finds its own compulsions and the action is essentially the same no matter the object of desire. And it always runs until it collapses.

Along with speculation in the financial markets, the compulsion by today’s socialists to politicize all, repeat all, decision-making has become a reckless mania.

Both phenomena are impetuous enough to be considered as ending action.


Institutional and bureaucratic greed. in Rome: panem et circenses

One of the features of a long bull market for stocks is that the public finally gets in, creating the peak. This, of course, is widely known, and the excitement brings in unseasoned stock brokers as well as unseasoned customers. Risk knows no limits, as leverage is fully employed.

Senior partners enjoy the revenues, but with full knowledge that it will end badly. But always next year.

The nemesis is built in. New clients, new brokers, new stock issues but always with margin clerks with an old and exacting job description.

Then, suddenly enthusiasm turns to chagrin and dismay, as the power shifts from central bankers to margin clerks.

With a long history something similar goes on in politics.

As the saying goes, all politics is local, and for most of the time society has avoided political overload as well as its extravagant costs. Regrettably, there have been times when constitutional norms are violated as politics records hyper-activity. Like, shudder, lately.

With growing passions, history is recording another political bubble. Understandably, ordinary folk are becoming fed up with unsettling intrusions,
Decades ago, this writer noticed three great experiments in authoritarian government as experienced in the main economy. A common feature was that each started with the greatest accumulation of wealth in history. Enough to inspire institutional and bureaucratic greed. Free stuff is often the bribe. In Roman times, Juvenal’s phrase was panem et circenses and, quite simply, it went on until all the money was gone. By the Third Century, half of the city of Rome was on the dole. Beyond a military dictatorship Rome had become a welfare dictatorship. The latter helped to destroy the former.

The next great accumulation of wealth began in 1500

On the authoritarian side, the big promotions have had winning slogans. The “genius” of the Emperor, the “Infallibility of the Pope”, the “Divine Right of Kings” and more recently, the “Infallibility of the Fed”.

Roman intrusion with chronic inflation went on until the early 300s when it became too much. And possibly sensing a reform movement, Constantine recognized Christianity, its regard for the family and concept of free will. The latter did much to bypass Rome’s “top-down” legal system. State theft through chronic inflation was curtailed by re-introducing a gold coinage. The state-fueled central economy and population of Rome itself collapsed with amazing speed. The economy shifted from control freaks to relatively free markets located in natural trading centers. Such as Genoa or Venice and later London.

Less centralization and intrusion became the default, but amiably constructive, position for most people. Even princes learned to assist rather than prey upon trade.

The next great accumulation of wealth began in 1500 with the confiscation of gold and silver from the New World. As with Rome, an enormous windfall was insufficient to fund endless ambition so Spain, the leading nation, issued endless amounts of debt. Of course, made easier by chronic inflation which is little different to policymakers serving today’s state.

By the early 1600s, costly intrusion became intolerable and the reformation is best followed in England. The “Glorious Revolution” of 1688 was essentially a popular uprising across the country, led by business interests in London. The end of absolutist government was followed by enlightened liberalism.


Too much in-your-face and in-your-wallet bureaucracy has prompted popular dissatisfaction

Traditional liberal concepts of limited government and individual freedom reached their best by around 1900. Then, there would have been no way of predicting that another horror-show of authoritarian government would erupt. Like its predecessors, it was propelled by an extraordinary accumulation of wealth and greedy governing classes. Unlike earlier examples unprecedented modern prosperity was created by individual initiatives in business, science and engineering. Not by conquest.

With ever-growing amounts of wealth and income, bureaucrats again succumbed to avarice and through the beguiling charms of central planning contrived confiscation. Inspiring banners fronting the intrusion have ranged from Communism and fascism to the New Deal as well as today’s New Green Deal. Central Banking was corrupted by the concept of “managing” a national economy when there is no such thing as a discrete national economy. Of late, the corruption includes the unenviable task of providing unlimited funding for another experiment in unlimited government.

Too much in-your-face and in-your-wallet bureaucracy has prompted popular dissatisfaction. That when taken over by neurotic intellectuals very nasty things have happened, as seen in the murderous French and Russian Revolutions. On the brighter side, practical people of all classes accomplished the “Glorious” and the “American” Revolutions, which can work this time around.

This writer notes that as far back as Ancient Egypt, inequality between the governing classes and ordinary folk eventually prompts popular uprisings. With enough of them now the result could be another great reformation. His “American Spring” published on July 4, 2016 concluded that the popular uprising would win the US election.

The issue now, is that a wave of new Democratic members was elected by a new wave of suddenly vibrant socialist voters. Ocasio-Cortez threatens that global warming will bring the world to an end in 12 years. Of course, this will be prevented by change-your-life increases in taxation and regulation, which is similar to the ambition in the 1970s when democracy was inadequate to prevent “Global Cooling”.


No matter whether the threat is cold or heat, unenlightened intrusion is the answer

The “Sumpter Daily” on January 26, 1970 headlined “New Ice Age”, within which Dr. Arnold Reitze called for “Outlawing the internal combustion engines…” Cars and industry emitted carbon particles into the atmosphere which would force cooling. And his worries were so intense that “We will be forced to sacrifice democracy”. To eliminate carbon. To end cooling.

Then, on February 6 details about the revelationary Green New Deal were headlined. And the intention is to “mobilize every aspect of American society” to end the threat of carbon dioxide. It “aims to eliminate all internal combustion engines”. Similar to the hysterical ambition of the 1970s, but the threat is “Global Warming”. In Russian, the words communism and socialism mean the same thing and the Green New Deal is both, representing a massive remake of the American economy and everyone’s life. It is fronted by Alexandria Ocasio-Cortez, a dazzling new and young politician, who is inspiring many young voters.

A site, “Chatham House” had the most succinct headline: “Towards a Zero-Carbon Economy”. This time to end “Global Warming”.

No matter whether the threat is cold or heat, unenlightened intrusion is the answer.

The “bull market” for this intrusion started at around 1900. And it is worth noting that the two previous experiments in authoritarian government took some 120 years to spend all of the money, and then some, prompting uprisings and reform.

In a speculative rush, the public will believe even the most preposterous story so long as seems to be working. Despite the crack in the financial markets there is still confidence that the Fed will prevent “bad things” from happening. The reform movement with Trump as its leader suffered a setback with the 2018 election. However, both financial and political markets became recklessly speculative and are now vulnerable.

In looking out over this year, a financial and economic contraction is possible, which would break the spell of central bank omnipotence. This would constrain the funding of reckless government whereby policymakers believe they can “manage” not just the economy but also the temperature of the nearest planet. On the latter, there is adequate information to conclude that forecasts that the “Earth will fry” have been hysterical to motivate the public.
Outstanding examples of new customers and new brokers burning themselves out culminated in 1929 and in 1968 and were followed by dismay over a couple of decades. The latter was also accompanied by student riots and trashing of faculty offices. This time around, new voters and new political agents have been forcefully in play since Obama won in 2008. His ambition was to change America according to the “Rules For Radicals”. One such instruction is to overwhelm the middle classes by overwhelming the welfare system.


Canada: Socialists published the “Leap Manifesto”, a platform of radical demands. Their polls crashed.

Which extreme intrusion naturally inspired this popular uprising?

On the long and expensive trend to the Left, some Republicans and/or Conservatives in Canada compromised by going along with big government. Well, just a little for credibility’s sake, which split the conservative side. Driven by excesses, another great reformation is underway whereby the conservatives could prevail. In which case, the moderate side of the Left could for credibility’s sake temper their demands. The newly elected radicals are already splitting Democrats.

Early February recorded remarkable political contrasts. In his State of the Union address, President Trump was strong on freedom, which is what the popular uprising is all about.

Then came the radical points of the Green New Deal. Obviously inspired by Roosevelt’s interminable intrusion with the New Deal of the 1930s, which was also ambitious to change the culture of the US. Of course, “new deals” are not really new. A 1939 book by Pulitzer-winner, H.J. Haskell, “The New Deal in Old Rome” says it all. The bureaucracy then pushed that new deal until it collapsed the Roman economy.

But there is something suggesting a positive turn. Canada’s last federal election was in 2015. The Conservative had been in office for too long and the media drumbeat was “Anything But Conservative”.

The Liberals looked weak, so this pushed the socialist party (NDP) into first place at 33.6%, which had never happened before. Then, socialists published the “Leap Manifesto”, a platform of radical demands. Their polls crashed.

The Liberals won, Conservatives became the official opposition and the NDP, at less than 20%, came in last. Now at 14.6%.

The Left’s Green New Deal is another socialist manifesto, shocking enough in its ambition to split the Democratic vote.

Trump’s State of the Union address was “presidential” in delivery and in policy seized the center of the political spectrum where most of the vote will be. Perhaps enough to begin to reform “RINOS” within the GOP. Altogether it suggests a strengthening Republican position going into the election.

This article opposes socialism and some on the Left will condemn it as “Right Wing” or even “Nazi”. Not so, criticism of big government can be academic. The best definition of authoritarian government comes from physics. It covers every political persuasion from Left to Right and folks have had enough.

“That which is not compulsory is prohibited.”

“That which is not compulsory is prohibited.”

You must drive expensive electric cars. You must use public transit. You must submit to regulatory frenzies. You can’t use any unapproved energy. You can’t fly in commercial airplanes. You can’t criticize Political Correctness. You daren’t laugh at the nonsense.

All it will take to break the mania to control everything would be two failures. The end of the financial bubble would end the spell of central bank omniscience and constrain reckless funding. The other great disappointment would be more of the public discovering that climate scares have been rigged for grant money and to impose a new world order.


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Bob Hoye -- Bio and Archives | Comments

Bob Hoye (BobHoye.com) has been researching investments for decades, which eventually included the history of financial and political markets. He considers now to be the most fascinating time for both since the Great Reformation of the 1600s.  Bob casts a caustic eye on all promotions and, having a degree in geophysics, is severely critical of the audacity that a committee can “manage” not just the economy, but also the temperature of the nearest planet. He has had articles published in major financial journals and, as a speaker, has amused assemblies in a number of cities, from London to Zurich to Tokyo.

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