"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Wednesday, November 7, 2012

America Votes for National Suicide

Those on the left who read my columns will of course take exception with the title I have deliberately chosen, but that is and was a given. So let me start this by saying that I believe their euphoria at having seen their man win, will be short-lived, faced with the extreme problems facing this nation and their utter lack of anything that remotely resembles a plan to deal with them other than the usual class warfare tact of "soaking the rich" further and further enlarging the size and scope of an increasingly intrusive Federal Government.

I have written on this site repeatedly that the problems afflicting the US economy cannot and will not ever be solved by Uncle Ben Bernanke's alchemy of turning paper into "money" and multiplying it in ever larger doses. What ails the US is structural or deep seated. To tackle that involves a serious plan, a plan which by its very nature will involve making choices that will surely bring about some short-term pain but which would put the nation on a sound footing for long term growth and lasting prosperity. Foremost among this is reducing the spending binge in Washington DC and getting America's fiscal house in order. That WILL NOT HAPPEN now that the profligate spender Obama has been re-elected. He has no serious plan to reduce the deficit and never has. One can tax the "rich" into oblivion but even confiscating the entirety of their wealth would not so much as to put a dent into the burgeoning national debt.

Business owners, particularly small business owners, the backbone of this nation's economic health and the primary source of all job creation, had been holding their breath, hoping against hope, that the nation would be delivered from its national nightmare. They either went to bed last evening or arose early this morning to learn, much to their consternation and dismay, that the nightmare will continue for four more long years. A system of nationalized healthcare, with the IRS being the chief enforcers of the penalty for non-compliance now awaits them along with a set of growing, job-killing regulations guaranteed to put further burdens upon them. Not only that, the beginning of the year 2013, will see a massive set of tax hikes hit the nation, further depressing economic activity.

An energy rich nation, blessed by Providence with an abundance of oil, will see its federal lands shut off to any drilling. Any hope for a pipeline delivering Canadian crude to the lower 48 has now withered and died on the vine. China - enjoy that Canadian oil because we are not going to see any of it.

The Dollar, while getting a respite today due to the fact that a near panic has seized upon the investor class, is destined to further weaken, resulting in higher prices for the basics of life such as food and energy. The fiscal cliff is drawing ever nearer with the very real possibility, nay strike that, probability, that the rating agencies will further downgrade the US credit standing.

In short, get ready for the continuance of the same set of woes that have become all too familiar to us for far too long now. In the markets, expect the wicked volatility to become even worse as they swing wildly between euphoria and despair, based on whether or not the latest dose of funny money injections has temporarily boosted economic activity for a few weeks before its impact then fades once again.

If you have any doubt as to what the markets believe the result of this election is, take a look at the following chart of the S&P 500, the broader measurement of the US stock market. The collapse in the equity markets tells us everything that we need to know about the election results as far as the impact on the economy goes.

This brings me to my last point and to my most controversial one. In observing those election results I have become convinced that this nation, as we once knew it, is a house divided, to the extent that it cannot survive in its present form. There is absolutely nothing "UNITED" about these United States of America.

Among my close friends, I have been speaking to this topic for more than a decade now, having become convinced as far back as the 2000 election, that the nation was headed down the road to dissolution. Let me explain...

As a commodity futures trader, my task is to study TRENDS, particularly longer term trends and by so doing to hopefully profit thereby. There are trends in markets but there are also trends in a society. The trend in this society is an increasing divide between two diametrically opposed political ideologies.

The first of these is conservatism. Those who adhere to this view, and I include myself in this camp, believe in a system of limited government as envisioned by our Founding Fathers. The powers of the federal government are few and well defined with those not specifically delegated to it by the Constitution remaining within the providence of the individual states. "Unalienable" rights procede from God, and as such, are not subject to intrusion upon by the state. The state exists to protect and preserve these "rights".

The other view is that of the European statist model. The central government, that which is furthest removed from the people, has the lion's share of power. It view "rights" as those which those in power at any particular time, decide to grant (case in point - the "RIGHT" to medical care). The notion of "unalienable" rights, those which the government may not intrude upon, is an outdated, ancient concept which has no place in a modern society. The Constitution, while given lip service, is more often than not, a "flexible" document which may be ignored should it interfere with the desired outcome of those in power at the time.

Additionally, under this view, government exists to be the Great Leveler. Income inequality is something that cannot be allowed but must be rectified in the name of some nebulous form of cosmic "justice". That means wealth redistribution from producers to takers, overseen of course by a group of all-wise, good-intentioned central planners.

One model is that of liberty and has given rise to the greatest, most free, most prosperous nation in the history of the world.

The other model, see the case evidence in modern Europe - Greece, Spain, Portugal, Italy, etc. - produces soft tyranny and economic stagnation and inevitable decay.

Think about what we are already seeing - we have a central government dictating what kind of washing machines we may have and what kind of light bulbs we can burn in our own homes. We now are faced with the incomprehensible notion that the federal government can compel individuals to purchase health care insurance or pay a fine, a fine which I might add is now going to be under the purview of the Internal Revenue Service.  What's next - what temperature we may be allowed to set our home thermostats at? Wait until Obama finally gets his chance at a CARBON TAX.

This being said, where is the commonality in these two ideologies? Quite frankly, there is none. Just how are those who adhere to the conservative vision supposed to react when they find their sacred liberties being curtailed, their children's opportunities being shrunk, the fruit of their labors being increasingly demanded from them and the incentive for hard work disappearing? What portion of their deeply held and cherished convictions and traditions are they supposed to surrender in the name of getting along or the famously empty buzzword -  "bipartisanship"?

I submit that the common bond which once held Americans together, across a variety of states, has been torn asunder by decades of class warfare, the politics of resentment and an education system which has failed to teach the unique genius of the original American system of government combined with the virtue of self-reliance.

We are divided along ideological lines in a chasm that is as wide as any time in our nation's history going back to the War Between the States in 1861- 1865. Let's face it, the people in the red states have very little in common with the people in the blue states other than the fact that they happen to reside within the geographical boundaries of a set of lines drawn on a map. What pray tell does a conservative state such as Texas have in common with what is often referred to as "The People's Republic of California"? The Old South might as well be a completely foreign nation to the majority of people who reside along the Northeast corridor when it comes to values and traditions.

That fault line that existed in our nation's Civil War past was settled not by a bridging of the differences, a finding of common ground, but by a horrific war in which the victor imposed its will upon the defeated.

I submit that these "DisUnited States of America" should procede with an amicable divorce while there is still time. Let those states in which the majority choose to live under and be ruled by a European statist model form their own union. Let those states in which a majority desire to remain under the system devised by the Founding Fathers form their own union. Incidentally, let this union opt for sound money.

Let the two nations trade freely with one another and enjoy a friendly relation with each other. Let the citizens of each respective nation be free to immigrate or emigrate to one or the other depending on their convictions and belief set. But let them do this before the internal tensions in this nation rip it apart at the seams.

I do not say this lightly as it pains me exceedingly to even contemplate such an occurence but try as I can, I do not see any earthly way possible for this ever-widening ideological gulf to be bridged. The left in this nation will not rest until they have imposed their statist model upon the rest of us who reject it. The right merely wants the government to leave us alone and let us get about our "life, liberty and the pursuit of happiness".

I leave you with the words of Jesus Christ: " A house divided against itself cannot stand and a kingdom divided against it itself will fall".

Quo Vadis America???