Doug Casey on the America That Was – Now the United (Police) State of America

A great interview of a brave thinker…

(Interviewed by Louis James, Editor, International Speculator)

L: Doug, after conversations like the one we had last week, we often get letters from angry readers who accuse you of hating America, disloyalty, and perhaps even treason. These people don’t know or understand what I do about you – that you love the idea that was America. It’s the United State it has become for which you have nothing but contempt. Perhaps we should try to explain this to them?

Doug: I doubt it would work; it’s a tough row to hoe, trying to explain things to people who are so set in their thinking that they truly and literally don’t want to hear anything that might threaten their notions. A person who feels threatened by ideas and who responds with emotion is acting irrationally. How can we have a discussion with someone whose emotion trumps their reason? How do we even begin to untangle the thinking of people who will gather this week to give thanks for the bounty produced by freedom and hard work – the famous puritan work ethic – by eating a turkey bought with food stamps?

But we can outline the ideas, for the record.

L: I’ll bring a copy if they ever do put you on trial for thoughtcrime – which is frighteningly close to being real these days and called treason to boot.

Doug: It’s not just close; it’s here. Just try telling an unapproved joke in a security line in an airport these days.

L: True enough. Where to begin?

Doug: At the beginning. America was founded as a confederation of independent countries – that’s what a state is. Or was, in our language. The original United States of America was a confederation of countries that banded together for protection against larger and more powerful countries they feared might be hostile. This is not a disputed interpretation of history, but as solid a fact as the study of history produces – and yet a largely neglected one.

L: We did cover this ground briefly in our conversations on the Civil War and the Constitution.

Doug: So we did… the short version being that the US Constitution was essentially a coup; the delegates to what we now call the Constitutional Convention were not empowered to replace the existing government – only to improve upon the Articles of Confederation between the then-independent states. The framers of the Constitution drafted it with the notion of a national government already in place, but calmed fears of loss of state sovereignty by calling the new government the “United States of America” – a verbal sleight of hand that worked for over half a century. Then the southern states decided to exercise what these words imply; their right to leave the union. While slavery was and is a wholesale criminal activity I object to in every way possible, the southern states did have the right to secede, both legally and ethically. But the question was settled by force, not reason, and the wrong side won.

L: Another coup?

Doug: More like an exposure of the first one for the whole world to see. But by then it was way too late. Despite this, the relative freedom of the US – because it was for many years far freer than other countries – made it possible for artists, engineers, inventors, and businesspeople to flourish and create a society more wealthy and powerful than any the world had ever seen. This is what I call the idea of America – the America That Was.

But the seeds of destruction were already sown at the very beginning – with the Alien and Sedition Acts being perhaps the first highly visible step in the wrong direction. Then came the forceful assertion of one national government, with states reduced to administrative regions via the War of Southern Secession, from 1861-’65. I’m no fan of state governments, incidentally, but at least they’re smaller and closer to their subjects than the federal government. Another major step in the wrong direction occurred with the Spanish-American War of 1898, where the US acquired an overseas empire by force. The next major step downhill was the creation of the Federal Reserve and the income tax, both in 1913, just in time for World War I. It took time for these things to make the system crash, because it was still a fairly free economy.

L: But crash it did in 1929…

Doug: Yes. And it led to the Great Depression of 1929-’46, which lasted so long entirely because of the unmitigated disaster of the New Deal (which we discussed recently). The New Deal injected socialist-fascist ideas into mainstream American thought like a poisonous acid, corrupting the heart of the idea of America that once made the place great. The process was completed with Lyndon Johnson’s Great Society, which really established the basis of the welfare-warfare state. It truly set the stage for the total ethical, economic, social, political, and even military disaster now unfolding before our eyes.

Still, the beating heart of the idea of America – which is to say both social and economic freedom – took time to corrupt. Like a strong man who doesn’t know he’s headed for a heart attack, American culture didn’t really peak until the 1950s. The bullet-finned 1959 Cadillac is a symbol of this peak, in my mind.

L: Then we had Johnson and his “guns and butter” policy – War in Vietnam and War on Poverty at the same time – followed by tricky Dick kicking the last leg out of under the stool by taking the dollar off an even theoretical gold standard.

Doug: Yes. Nixon was arguably even a worse President than Johnson, with the devaluation of the dollar in 1971 and his creation of the War on Drugs. Things have spiraled out of control since then. InThe Casey Report, we’ve written reams about these last decades and how they led to and shaped what’s happening now. But I have to say, the focus has been largely financial.

L: Which is as it should be, in a publication designed to help investors navigate these turbulent times.

Doug: Yes, but the corruption goes way beyond that, beyond even the senseless wars and idiotic foreign policy we discussed last week. America, once the land of the brave and the home of the free, is well on its way to becoming a police state – worse than any we’ve seen in the past, including the Soviet Union and Nazi Germany.

L: How could it get worse than that?

This is just an excerpt. To read the full interview, go here.

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Obama Versus Romney Who Will Win? And Does It Matter?

Over the past several weeks, readers have expressed their interest in the upcoming presidential election and its impact on America’s future. More particularly, many readers see this election as a contest between freedom and capitalism and some newfangled version of socialism… and they are worried that if Obama wins, they will become a lot poorer.

Well, here’s what I think. As far as your financial future is concerned, it doesn’t matter who is elected. Despite differences in ideology and rhetoric, our next president will take essentially the same path in terms of “saving” the economy.

I’m not saying that there is no difference between the candidates’ economic views. Obama wants to redistribute wealth. Romney wants to diminish social spending. But neither of them will make much long-term headway at realizing their ambitions. What they will succeed at is what both Republicans and Democrats have been doing nonstop since World War II: expanding the federal government by increasing its debt.

I’m not an economist. In analyzing our country’s economic policies, I take a businessman’s perspective. Businesses have many goals, some altruistic and some selfish, but they are all ruled by the logic of the balance sheet. Without a positive balance sheet, no business can last.

The Economy Is Out of Control

Our economy, I’m sure we can agree, is in ruins, and our federal government has unprecedented levels of debt. On top of our outstanding debts, we keep spending more money than we’re taking in. But only a partisan fool would suggest that this is due to Obama. The national balance sheet was already $9.9 trillion in the red when he took office. He has done a good job of pumping that up to $15.9 trillion. But had McCain been elected in 2008 we would be in roughly the same place.

The reason for that is simple. Every modern-day president knows that his only chance of being elected or re-elected depends on the economy. If the electorate believes that the president is “doing a good job” with the economy, it will re-elect him. If it believes he has made things worse, it will elect his opponent, who will be arguing that he can fix it.

But today there is no way to fix the economy.

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Hidden Dangers in the National Parks

K and I are spending a few days at the Mammoth Hot Springs Hotel in Yellowstone National Park.

The hotel is run by a private operator that has, our tour guide told me, a long-term concession from the federal government. That pretty much amounts to a government-run business, so I wondered what it would be like.

From the outside, the old hotel was inviting – a rambling, wood and stucco building painted lemon yellow and set among pine-covered hills. Just a few hundred yards away were the oddly beautiful hot springs that looked like the dark side of the moon.

Once we stepped inside the hotel, that inviting feeling began to evaporate.
The lobby was an undecorated box of a space, randomly “furnished” with small, cheaply made booths. One booth sold coffee and cake, one was covered with brochures, one sold souvenirs, and another turned out to be the reception desk. In between the booths, people of every ethnicity (presumably patrons of the hotel) sat at formica tables.

I took it all in, thinking, “Whoever designed this place must never have been inside a beautiful hotel.” (In fact, I wondered if he had ever been in a hotel at all.)

“Perhaps the lobby is being renovated,” I told myself. “The rest of the hotel must be fine.”

After spending 15 minutes acquiring our room key from a pleasant young woman who didn’t seem familiar with the computer she worked at, we set off for our room. I was happily anticipating a quaint mini-suite with spectacular mountain views.

My anticipation dissipated in the hallway – an eerily dim corridor that had been spray-painted with that pebbly paint that was so popular in the 1970s. Ugly, incandescent lamps illuminated the ancient plumbing that ran along the ceiling. Doors peeked open as we passed. The experience was disturbingly reminiscent of The Shining, where Jack Nicholson prowled a similarly creepy hotel.

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Faith in Untrustworthy Numbers

I’ve always felt that philosophy degenerated when the numbers guys took over.

From The Daily Reckoning:

Despite all their numbers, formulas and Nobel prizes, America’s leading economists, including the lead dog economist himself, Ben Bernanke, were apparently unable to see something so obvious that even we spotted it: the collapse of housing and the blow up of the credit market.

Not that they are dumb. They are just following a different career path. A genuine economist keeps his eyes open. He reads the paper. He reads books. He studies history. He talks to taxi drivers and businessmen. He tries to understand what has gone on in the past…and what might be going on today.

He has no illusions about it. The future will never be like the past. But there will be similarities. And those similarities can be studied…

He has little appreciation for numbers. He knows they can’t be trusted. They are like whores and lobbyists — they will do their work for whomever pays them.

Read the rest here.

 

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