Politicians and the 1% Preparing for Social Unrest

Is it just us, or does the world seem to be becoming a much more dangerous place lately? Does it feel like, in these uncertain times, violence born of frustration could strike at any minute?

Herman Cain seems to think so. We read today in The Christian Science Monitor:

“Herman Cain on Thursday became the first Republican presidential candidate to receive Secret Service protection.

“Cain asked for the security, and Homeland Security Secretary Janet Napolitano and congressional leaders approved his request Thursday, Secret Service spokesman Ed Donovan confirmed.

“There have been threats against Cain, who had been experiencing a bounce in the polls, according to an official with knowledge of the situation, who asked not to be identified because of the sensitive nature of the situation. The nature of the threats was unclear.”

The times sure are changin’. Dave Gonigam of The 5 Min. Forecast reminded us this morning that a British ambassador once knocked on the White House door, only to have it opened by President Thomas Jefferson…wearing his “house dress” and slippers.

In Herman Cain’s case, the worry about violence seems to stem from his race…

“On June 1, Cain’s campaign office in Stockbridge, Ga., reported receiving a call from someone who did not identify himself, but who claimed to be a member of the Ku Klux Klan. The man said that Cain, who is black, should not run for the White House.

“‘Tell him not to run’ and ‘there’s no such thing as a black Republican,’ the man said, according to a written statement Cain’s administrative assistant, Lisa Reichert, gave to the police.The caller did not explicitly threaten violence.

“The Associated Press obtained a copy of the police reports using Georgia’s open records law.

“Local police alerted the FBI and the U.S. Secret Service to the incident.”

While Mr. Cain is taking precautions against racists, the Patriotic Millionaires seemed to be inoculating themselves against the anger of the crowds…

As we reported in yesterday’s missive, this handful of the 1% see the writing on the wall. And they are marking their doors with lamb’s blood before the angel of death can make his rounds. The not-so-rich-and-getting-poorer are mobilizing. And the Patriotic Millionaires figure it’s best to make nice now and offer up more of their own money…and that of their neighbors…to let the mobs know which rich folks they should refrain from eating when the time comes.

A reader took exception to our characterization of these Patriots…

“Gary,

“I read and enjoy your writing, your ranting, your missives…for the most part. But you are off-base this morning. As to why you miss the forest for the trees, I will not guess. However, your criticisms of Mr. Fink and his cronies are off-base. Mind you, a few of them may, indeed, enjoy funding foreign wars, they may even be willing to pay up to get the infamous 1% off the hot seat, but more important is their basic belief that the public good is better served by them doing their fair share of the lifting.

“If Mr. Fink so offends you, spend your angst terrorizing the lying lobbyists who are paid huge salaries to produce NOTHING at all, and forever scheme to lower Mr. Fink’s taxes. Tell me why they escape your ire…

“Respectfully,

“–Leonadi”

We don’t mind if people make money “producing nothing.” Heck, we wish our readers would take our advice on how to make more money just by putting their money in the right places.

We do, however, weep because there is money to be made at all in getting the politicians to provide unfair advantage.

And here, we must admit that we fail to see the nobility in supporting “the public good.” One-half of the country would have us believe the government should spend the stolen money on butter. The other half on guns. We humbly suggest that government spending must, by its nature, be less efficient than private-sector spending…and that it is, generally, harmful. Further, that spending is funded by what’s taken by force from the private sector directly…or indirectly, through inflation.

And further still, that spending has a way of producing some spectacularly awful results. Escalating military spending against threats that never seem to diminish…and more and more, social welfare promises that cannot ever be paid for…

We note that war is too expensive for free markets to support, that war is a wasteful undertaking only achievable by the state with its monopoly on legal theft….

But what about the feeding and care of the elderly, the poor, the indigent? Surely, this is the “public good” that the state provides that the market cannot!

Actually, no. We note that markets are all about building wealth. And by that, we don’t mean concentrations of the stuff. Capitalism — the seeking of profit in a competitive environment — tends to prevent the continued concentration of wealth in few hands because of unfettered competitions. Today’s innovators and producers become tomorrow’s bankrupt has-beens, as competitors continually bring down profit margins and bring newer, better products to market…

Meanwhile, all of society benefits from this tussle, this “greed.” Today’s pricey luxuries become tomorrow’s cheap commodities. The “poor” need less and less taking care of, because everything from food to smartphones becomes so damned cheap…

At least they do in the absence of regulation that strangles competition…or fiat funny-money systems that degrade the currency, destroys savings and supplants capital formation with debt as the foundations for economic growth…

As we’ve often tried to illustrate, governments are, primarily, in the business of hampering competition in favor of the already-established and powerful “capitalists” (in quotes because capitalism actually requires competition to work), whose money buys political favors and favorable legislation.

Meanwhile, the state claims that it wants only to help those in need…with other people’s money. But the state’s methods, actually, just breed more need. They demonize deflationary tendencies of the market — arguing that supporting price “stability” promotes a healthy economy — while penalizing success in order to subsidize dependence.

Of course, each is free to give freely as much as he wishes. But if the markets are allowed to work — if the state gets out of the way — there is less need to give.

“Just don’t get it do you, Gary?” another reader asks…

“Can’t stand that there really are a lot of wealthy 1% that are rational, logical and most of all, patriotic. They realize that we are all together in this country on a small global spaceship, and we need to allow everyone a chance to succeed.

“I think it’s mostly the 1% wannabes that have the real greed virus.

“I’m contributing to OWS, what are you doing besides whining? It’s just a matter of time that democracy and human sense of fair play will start winning the elections and the day.

“You cannot fight the math and physics of logic and moral high ground. Whining can be a lot of work, but if you can get paid for it, that’s the free-market system, and you don’t even get calloused hands. It’s the unfair job market and social system that has people riled up.”

[Editor’s Note: Our hands got plenty dirty and calloused and we both froze and sweated throughout our ’20s and early ’30s — as we’ve already noted — doing other work. But if a free-market system actually requires less overall sweat, discomfort and calloused hands for all of humanity, we see that as a good thing.]

“A great country cannot survive when its social safety nets are in the scale of SS and MM. Those need to be realistically reduced, and to get there, you have to implement fair taxation that starts us trending back to a middle class that can support itself with families, and in retirement. When 95 %-plus of the population starts dying penniless and on the public dole, everyone loses, even the whiners.

“–Lloyd”

The dangers of greed? Oh, dear (possibly former) reader, greed without politics is merely boorish. It’s politics that make greed dangerous.

There is nothing wrong with “greed.” Most of us are greedy for more love, esteem or material comfort. Often, all three.

We understand the protesters are angry that politics have been used to benefit a few. But we do not believe that politics should be used to benefit the many either.

We don’t like political solutions. They always, always, always amount to theft from from one group for redistribution to the other. Moral arguments are often used to justify it, but it always come down to the group with a monopoly on force (the state) taking from others on pain of imprisonment or death.

We favor a system of voluntary exchange, sound money as chosen by the market and a respect for property starting with the individual’s complete ownership of himself. We look at history and see that the more societies lean toward these things, the wealthier and better off they are.

Forced redistribution in the form of Social Security, Medicare, Medicaid and welfare breed dependence. Over time, takers overwhelm providers. To paraphrase the famous line, it works great until you start running out of other people’s money.

It’s the free markets that have allowed the growth of the population. It’s the markets that built the systems that provide so much cheap food and all the creature comforts we take for granted today. Interfering with these markets is what’s most likely to cause the kind of privation you get in command economies. More regulation will further wound wealth generation (wealth being a measure of value addition and abundance, not merely printed paper).

If we seem hard on the OWS protesters, it’s because in their understandable anger they are calling for more of what has been ruining economic progress all along. We’re as disgusted with thieving, government-enabled commercial bankers as anyone else, but we understand that the answer to socialism for the well connected is not socialism for the masses.

(They are not calling for less state, like the anti-war protesters did in the past. Jeffrey Tucker will address this point in tomorrow’s weekend edition.)

The masses themselves don’t understand this. And as we feared their mood is turning uglier almost by the day.

Protests are turning into riots even as we scribble these words and send them to you. We see a few possible outcomes, none of which we like…

• The protesters get what they want. Good and hard. More regulation, more redistribution. And the nation winds up poorer for it. Incentive gets penalized even more. Progress halts, even reverses. Public debts increase even as public dependence on government increases.
• The state uses the worsening public conditions to justify more monitoring and control of its citizen-subjects. Random stops in public, invasions of homes and outright violent seizure of private property or persons become the norm in order to combat “domestic unrest”
• The state figures that’s what’s needed to fight domestic unrest is a good war with an opponent who has the means to fight back hard.

We actually expect some unholy combination of all three.

Regards,

Gary Gibson