Politics

Quoting the Dream: Voices on America’s Promise

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“The American Dream is that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement.” – James Truslow Adams, American writer and historian

 

“The faith that anyone could move from rags to riches – with enough guts and gumption, hard work and nose to the grindstone – was once at the core of the American Dream.” – Robert Reich, former US Secretary of Labor

 

“The American dream is not that every man must be level with every other man. The American dream is that every man must be free to become whatever God intends he should become.” – Ronald Reagan

Economics, Politics

Doug Casey on the Fed’s Quiet War Against the Middle Class

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Doug Casey is one of my favorite people. Long before it became a common discussion, he was on national TV explaining the value of free markets and the danger of large government and government debt.

The Doug I know is more than just a bestselling author and an early pioneer in free market economics. He’s also a man who has led a life of action, and even adventure. He’s done business all over the globe with industry leaders, traveling salesmen, bounty hunters, and diamond traders. He’s met with heads of state, negotiated international deals, and publicly debated powerful, deep-state-embedded politicians.

All that, and he has the charm to win favor with youngsters.

Years ago, I was sitting in a lounge in an airport in Denver (I think) with my family and Doug came in. I invited him to sit with us, hoping he wouldn’t say anything that would freak out K or the kids. He talked freely for half an hour. And when he left, my Number Three Son, who was about 12 years old at the time, said, “Dad. That guy is one of your coolest friends.”

In the following excerpt from an interview by International Man, Doug talks about the Federal Reserve’s recent rate cut and his view of the current administration and the future of the US economy. (I’ve done some editing on this to emphasize what I feel were Doug’s most important points.)

International Man: The Federal Reserve recently cut interest rates. What does it signal about the current state of the US economy?

Doug Casey: Let me introduce the subject with a joke.

Einstein dies and goes to heaven. St. Peter greets him effusively and says, “Unfortunately, Mr. Einstein, because we’re a centrally planned economy – for obvious reasons – we have a temporary housing shortage, and have to put you up with three roommates for a while.”

Einstein goes to his new apartment, and the first guy comes up to him and says, “Mr. Einstein, I have an IQ of 130, and I’d love to get to know you better.” Einstein says, “Great. After lunch, let’s bounce around a few concepts of astrophysics that have been on my mind.”

The second guy comes up and says, “Mr. Einstein, I’m not as smart as that first guy. I’ve only got an IQ of 100, but I still want to get to know you better.” Einstein says, “Great. Let me put away my grip, and let’s play a game of chess.”

The third guy comes up and says, “Mr. Einstein, I’m not as smart as those other guys. I’ve only got an IQ of 70, but I still want to get to know you.” Einstein says, “So, where do you think interest rates are headed?”

International Man: That’s funny!

Doug Casey: It also says a lot about guessing the direction of interest rates, which matters. Because they’re actually the most important single indicator in an economy.

International Man: How so?

Doug Casey: Interest rates are the price of capital, the lifeblood of an economy. In terms of their importance to the economy, you can think of them as blood pressure and pulse readings for measuring the health of humans. When a central bank lowers rates, it’s like giving a patient amphetamines. When interest rates are lowered, it’s like giving the patient barbiturates.

Central bankers are like doctors who are given the challenge of healing a sick patient and then keeping him healthy. But the only medical treatments they can use are amphetamines and barbituates.

I understand why Trump wants lower interest rates. They encourage people to buy things, consume, and borrow money. That increases consumption, business earnings, and employment. But this, like the artificial high you get from amphetamines, is only temporary because ultimately it discourages saving, and without saving, there’s no capital. The immediate and direct consequences of lowering rates might be an artificial boom. But the indirect and delayed consequences are a very real bust.

Interest rates should not be dictated by politicians and bureaucrats. Only free and dynamic conversations between borrowers and lenders can determine the “correct” level of rates.

International Man: Traditionally, the Fed has two mandates: price stability and maximum employment. Lately, Stephen Miran – a Trump-appointed Fed governor – has argued for a “third mandate”: moderating long-term interest rates. What do you make of that?

Doug Casey: Not only shouldn’t the Federal Reserve have mandates – it should be abolished. Unfortunately, it’s become so intertwined with the economy that people have come to believe it’s an essential component of the cosmic firmament. The Fed determines the amount of money and credit, its cost, and the way the banks operate. It finances the government’s debt, which is especially important since the government is bankrupt. But I hate talking about what “should” happen; “should” only happens in a dream world.

Initially, the Fed only had one mandate: price stability. That alone was a ridiculous goal. Then, maximum employment became the Fed’s second mandate – also impossible and absurd. And now they’ve taken on a job that may be even more ridiculous: controlling long-term interest rates.

Since the Fed was created, the dollar has lost over 95% of its value. Forget about price stability; the general price level has gone up by a factor of over 20, which is a total and abject failure. The Fed is, by necessity, an institution committed to the printing of money, which means that it is also an engine of inflation….

These people don’t have a clue about economics or the way the world works. And if Trump knows any better, he’s not acting on it. He wants to pack the Fed with puppets who will print money, vainly trying to keep interest rates below the rate of currency debasement. The result will be a catastrophe….

International Man: For the average American – someone with a mortgage, some savings, maybe a 401(k) – how do these potential shifts in Fed policy translate into real-life consequences?

Doug Casey: A lower standard of living, class warfare, and eventually chaos….

If you can get a 30-year 6% mortgage now, I’d do it. Long-term rates are headed up, and the dollars you owe will depreciate.

But in the kind of chaos that’s being created in the world today, on many fronts, your best investment is in yourself.

It’s critical that you and your family have as many skills and abilities as possible. No matter how things sort out, you want to be in a position to survive and prosper. I urge you to get my new book, The Preparation. It covers a host of things that most people haven’t even considered. Sorry for the commercial, but I think it’s important.

Politics

A Final Plea to My Big Apple Friends & Frenemies:  Mamdani?

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Really? 

Tomorrow, you will have a chance – not a great chance, but a chance – to defeat Zohran Mamdani. But some of you – maybe many of you – don’t want to do that. You want to elect him.
 
I get it. Mamdani is a fresh face in NYC politics. He’s energetic, likeable, and boyishly good-looking. 
 
When I first looked him up him six or eight weeks ago, my impression was positive. He seemed pleasant and approachable. Even charismatic. Thus, my initial impulse was that – notwithstanding what I’d heard about his politics – I wanted to like him. Perhaps the way I like Bernie Sanders.
 
The Conservative Media was very much alarmed by his growing popularity among NYC voters – particularly wealthy Liberals, whose votes generally decide the outcome of the mayoral elections. They said he was a Socialist. They said he refused to condemn 9/11. They said that he was the coddled child of a wealthy family and had never worked an honest day in his life, except for a few temporary jobs as a waiter and barista. Oh, and then there was that failed attempt to be a rapper.
 
Those are not the sort of ad hominem accusations to which I give a moment’s notice. Were they, how could I have come around, however gradually and begrudgingly, to liking and supporting Donald Trump?
 
Mamdani’s elevator pitch was a bit more concerning. Free buses. Free education. And free housing for the homeless and “undocumented migrants,” as he called them. 
 
Did he really believe he could fund all of his campaign giveaway promises by taxing the Super Rich? Hadn’t anyone in his election campaign group done the math? Had no one told him that those insanely hardcore New York City lovers were already giving up 51% of their income to taxes? Or that since Bill de Blasio’s disastrous tenure, the city was losing its multimillionaires – its most precious financial resource – by the jumbo jet-ful?
 
When I brought up the subject to the liberal NYC denizens I count as friends, they seemed saddened and distraught by such questions. “I’m voting for a Muslim and a Socialist,” one of them – a high-income, high-net-worth Jew – gleefully retorted. As if to say, “Take that and shove it down your conservative gullet!”
 
I remembered reading that on the verge of the Bolshevik Revolution, the luxurious banquet rooms and upscale cafes stirred with happy admiration for the latest trend of the intellectual elite – a movement called Communism.
 
What were my college-educated one-percenters so excited about? It was free bus transportation and city-owned grocery stores! 
 
Writing in The Free Press (I think it was), James Freeman said, “Grocery stores have been consistently among the most obvious, visible demonstrations of the failures of Socialism.” And that today they look like Russian supermarkets before they reintroduced private Capitalism – warehouses of mostly empty shelves except for periodic shipments of identical boxes and cans of bland and low-nutrition grains and vegetables. 
 
In 2000, “60 Minutes” was doing a story on Boris Yeltsin and the fall of the Soviet Union. Leon Aron, who had written a biography of Yeltsin, described the Russian’s visit to a supermarket in Houston: “If there was an epiphany in Yeltsin’s life it was seeing a US supermarket overflowing with ‘lemons of this color and the shining red peppers of that color… and everything is glistening….’ He was literally shaken by the quality of goods. On his flight back to Russia he sat with his head in his hands, repeating, ‘Look what they’ve done to our poor people.’” 
 
As for his position on the Mideast crisis, Mamdani’s been an outspoken critic of Israel in the manner of most Liberals and Leftists, including my giddily optimistic Jewish friend. As if, other than his contention that Israel’s execution of the war against Hamas has been “disproportional” to the barbaric slaughter of 1,200+ peaceful civilians, he would pose no threat to Jewish Americans living under his mayorship. This, despite the fact that he has refused to condemn the slaughter. In fact, in an interview on Fox News just last week, host Martha MacCallum asked Mamdani whether he believed Hamas should disarm and be barred from future leadership in Gaza. “I believe that any future here in New York City is one that we have to make sure that’s affordable for all, and as it pertains to Israel and Palestine, that we have to ensure that there is peace. And that is the future that we have to fight for,” he said in response.
 
In fairness to the lack of concern among so many NYC one-percenters and its large Jewish population, there is the argument that the city is just too big and disorganized to be destroyed by one man in a single term. De Blasio couldn’t do it (although he made a good effort), and it’s possible that Mamdani won’t permanently damage New York. But since he might, you have to ask yourself: Why take a chance? 

Bernie Sanders Goes to West Virginia 

A high school acquaintance who despises Trump sent me this video. I was hoping it wouldn’t trigger my I-Hate-Trump-Haters switch, and it didn’t. It does two things that I liked: It reinforces Bernie’s image as a regular guy. A likeable regular guy. And it shows the power of selling an idea by ignoring subtleties and complexities and having a simple story to tell that is compelling.

Here is how I responded to my friend: Thanks for the video! I enjoyed it. It made me like Bernie again! (Not enough to vote for him, but enough to recognize his modesty, sense of humor, and tenacity.)

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