Richard Daughty

It looks like American people are getting tired of government employees making about twice – twice!  – as much in wages and benefits as we taxpayers make, and there are movements to strip government-employee unions of their collective-bargaining authority, which only makes sense since there is obviously nobody on the other side (the taxpayer side) of the bargaining table!

I mean, would sober, intelligent taxpayers, negotiating on their own behalf, really say, “OK! We agree to give you wages that exceed ours, and a benefit package that is so generous that it is literally unknown in the private sector”? Hahaha! Don’t make me laugh!

I laugh, even though I asked you not to make me laugh, because it is humorous, just as humorous as some bizarre “Save The American Dream” rallies being organized by unions, MoveOn and similarly-disposed groups, all dedicated to pressure governments to ignore governmental insolvency in order to continue the lavish gravy train of making a lot of money and a carload of benefits, but without, apparently, any accountability at all, while half – half! – the employees in the Whole Freaking Country (WFC) already have some stupid job that makes no profit because he, or she, works for a local, state or federal government, a non-profit organization, a tax-supported private agency, or the education system!  Half!

The funny part is that this “American dream” crap is not “American” at all. It is old, old stuff.  In fact, it predates America, probably going back to the time of the Cro-Magnon era, where all the cavemen wanted to be supported by all the rest of the cavemen, and so they invented central banking and fiat currency so that they could constantly create more and more money to give to people so that they could hire someone to bring them bananas and groom their fur for parasites, which was supposed to grow the banana and grooming economy, but did not, and the fiat currency went to zero value due to its over-creation, causing  the social structure to disintegrate, which is probably why there are no Cro-Magnon people still alive, although I am not sure, and, unfortunately, proving it would entail me doing actual work, so it ain’t a-gonna happen.

However, because I am a generous man, I can take you back to the years before the Civil War, back to the famous economist and statesman Frederic Bastiat, 1801-1850, who observed that, according to, “Everyone wants to live at the expense of the state.  They forget that the state wants to live at the expense of everyone.”

I assume it was later when he combined them into “The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else.”

And so, it is not surprising that government employees are upset, as they have grown accustomed to realizing Bastiat’s Dream that was only made temporarily possible by the enormous increases in credit (and thus debt and thus money) provided by the satanic Federal Reserve so that the government could grow enough on the monetary inflation to provide these huge legions of people with unbelievable incomes and benefit packages.

In fact, there are now millions of people everywhere who “lived large” as pieces of this “Federal Reserve Money Giveaway” action rolled around and around, producing bubbles in stock markets, bubbles in bond markets, bubbles in housing markets, bubbles in derivatives markets, and huge, cancerous bubbles in the size of governments.

And a lot of the money went to bubbles in the financial services industry, as Doug Noland, in his Credit Bubble Bulletin at, notes that Bloomberg reported that Wall Street handed out $20.8 billion in bonuses to themselves in 2010, which was actually down 8% from the year before, when financial firms disbursed “$22.5 billion in 2009…”

Note that three-dot ellipsis as the end of that last sentence, as if Mr. Noland’s voice kind of trailed off when he started to realize, to his horror, that Mogambo The Magnificent (MTM) was right after all, and dividing $21 billion in bonuses by 300 million men, women and children in the Whole Freaking Country (WFC) country means that the financial services industry got $70 for every one of those aforementioned men, women and children!

And when money like that is being created to reward people who basically function as accountants and middlemen, and yet the financial services industry produced 70% of the profits of the WFC, you must know intuitively that you should be buying gold, silver and oil stocks against the roaring inflation in prices that must, because it always does, result from the evil Federal Reserve creating so much money.

And while they say that nobody rings a bell to signal time to get in or get out of markets, this is all a series of huge gongs, going “BONG! BONG! BONG!” to signal that it is time to get into gold, silver and oil!

And with that kind of warning, man! This investing stuff could not get any easier! Whee!

The Mogambo Guru
for The Daily Reckoning

Richard Daughty

Richard Daughty (Mogambo Guru) is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the writer/publisher of the Mogambo Guru economic newsletter, an avocational exercise to better heap disrespect on those who desperately deserve it. The Mogambo Guru is quoted frequently in Barron's, The Daily Reckoning , and other fine publications. For podcasts featuring the Mogambo, click here.

  • Deft

    Having the world’s reserve currency has created some huge economic imbalances. We’re not going to be the world’s biggest consumer nation much longer. Thinkin about getting out of dodge.

  • yallowKitty

    those ellipses make for some dangerous curves if the home track is not properly banked.

    3 bongs? can i come over?

  • Ken JMR

    Dear MMG,

    C’mon Man! Fact: you don’t get rich working for someone else. Fact: many federal employees are working for less than they could earn in the private sector. Fact: benefit packages are not as good as those at the better private companies. Fact: federal retirement benefits are not as generous as state retirement benefits (often the state employee makes more!!! in retirement than when currently employed. If anything, you should rant on about the Banksters, the trillions in $$$ they took from the taxpayer, and gave themselves billions in bonuses in taxpayer money as a reward for FAILURE. Finally, I’m surprised that if the federal/state pay and benefits is such a great deal, why is’nt your self- professed lazy SOB ass on the gravy train? I’ll close by acknowledging that there is govermental bloat, that lean six sigma priciples need to be applied across the board. Please, when you throw out that $120,000.00 a year income figure to the unwashed masses, include the statement that it inludes the “estimated” value of the benefits package. A big shout out to all the federal/state/county employees who are fighting the good fight. Don’t let the bastards grind you down. I was taught a long time ago, when impolitely questioned about my military pension, to say: “If it is such a good deal, why didn’t you do it?”

  • Bill

    To Ken JMR:
    You hit the nail on the head. I’m a federal government employee. I work many more hours most weeks than anyone I know who works for the private sector. And I don’t use the term ‘work’ lightly. I mean I work!
    Like Ken, I’m sick of media pundits lumping me in some unidentified group and saying we earn over $100,000 per year. My income, benefits etc are not even close to that. They should grow up and get the facts straight or get out of the media.

Recent Articles

Give Your Book Away For Free, Make More Money

Chris Campbell

The publishing industry is on its head. These days, it makes more sense to make money before you write your book and give it away for free once you do. In today’s Laissez Faire Today, Chris Campbell shows you how to create a hit with those two counterintuitive steps. Read on…

How to Poke the Russian Bear in 3 Easy Steps

Greg Guenthner

Interested in buying the dip in Russian stocks this morning? Before you do, let’s try to knock some sense into that skull of yours. Late last week, I reminded you why we bid farewell to the big Russian bear back over the summer. At the time, Russia was one of the cheapest markets in the world. But cheap can always get even cheaper—and Russia is certainly no exception. With comic book supervillain Vlad Putin manning the controls from his secret Siberian lair, the Market Vectors Russia ETF (NYSE:RSX) has dropped a cold 20% since registering its late June highs. Does it have a shot at rebounding? Greg Guenthner explains…

Why Malpractice from the Fed Will Undermine Growth

Steve Forbes

The latest friend of ours to weigh in on the topic of the value of your money is Steve Forbes. As you’ve been reading this week, we paid a visit to Mr. Forbes recently, to discuss his latest book, Money. In this essay, you’ll find his thoughts on currency devaluation… it’s impact of economic growth and your investments…

The Two-Pronged Approach To Safe, Consistent Gains

Steve Forbes

What causes individual investors to underperform the market year after year? Volatility? The Fed? In today’s video, Steve Forbes reveals what’s sabotaging your investment strategy – and the simple steps you can take to see consistent gains.

The Real Reason the Global Economy is Such a Mess – and How to Fix It

Steve Forbes

Why is the global economy such a mess? Why can't the world's foremost economists and financial thinkers seem to get it right? Simple... They don't understand the most basic element that makes up an economy: money. And as Steve Forbes explains, it all stems from the incorrect assumptions of a general theory of money. Read on...

Laissez Faire
Why Democracy Isn’t All It’s Cracked Up to Be

Chris Campbell

Is Democracy really all it's cracked up to be? And, more importantly, does Hong Kong really need it? China's wayward island already enjoys many of the freedoms of most democratic countries including free business, free trade and even low taxes. Chris Campbell ponders this idea today as he observes the protests from afar.