03/09/10 Mumbai, India – As we’ve pointed out before, there are two parts to a political system. One part is shrewd, calculating and corrupt. The other is stupid, senseless, and earnest. The first is surprisingly predictable. The second is predictably surprising.
Like the two sides of the brain, people use politics both ways. On the right side, they use it to do something that is completely preposterous…and often completely at odds with their own interests.
Start a war, for example. National pride. Sentiment. Anger. Humiliation. There’s no telling exactly what emotion will stir up the mob. And there’s no telling what mischief it will get up to when it’s been properly stirred and shaken. India was the site of the biggest political demonstration of all time. What was it about? Killing cattle. The Hindu population was against it…
Meanwhile, from Nigeria comes news that the Christians and Muslims are killing each other. And in Europe, just a century ago, people tried to kill each other for 4 long years…
But the right side of politics is beyond our scope for today. We’re concerned with the left side…the rational…goal seeking…angle playing side…where people use politics like a burglar uses a crowbar – to get something that isn’t theirs.
For example, a report in USA Today tells us that government employees have used politics to get more money. The paper said that 8 out of 10 professions are better paid by the government than by the private sector.
Lobbyists use the government to get money for their employers. If we read the item in The Wall Street Journal correctly, there were 10,000 “earmarks” in the latest budget bill.
What’s an ‘earmark?’ It’s a special little provision that gives a contract – or other favor – to a specific company, industry, or locality. A congressman might insert a little provision awarding a $100,000 contract, for example, to one of his constituent companies. Directly or indirectly, the company may have contributed $50,000 to the congressman’s re-election campaign…or may be ready to hire him if he is booted out of office…or may have hired his son or daughter. The amount is so small that the rest of the Congress is not going to pay much attention to it. Besides, other members of Congress are doing the same thing. Ten thousand earmarks…that’s more than 20 apiece.
Giving out money to friends and supporters is not exactly what Congress was set up to do. A Congressional Ethics panel was organized to investigate. Its report just came in this week. What did it find? That there was no impropriety; it was just business as usual!
Even the Ethics Committee has been corrupted by the left side of politics – the rational side. Everybody is looking out for Number One. Even the Ethics Committee.
Very predictable. And no harm in that. Everyone does it.
But as the political system matures, it supports more and more people who are looking out for Numero Uno and don’t much care what happens to Numero Duo. And as the host weakens, the parasites become bolder.
Even the right side of politics is corrupted. Instead of going to war for purely absurd reasons, lobbyists for pentagon contractors urge the nation to war for practical ones…specifically, to add to their own profits…and generally to boost employment.
Eventually, between the left side and the right side, the nation runs out of juice. Or worse. When the politicians have squeezed all they can out of existing taxpayers they go to work on those who aren’t even born yet. The debt rises and rises…until it is too heavy to carry. Then, all Hell breaks loose.
A few days ago, the Congressional Budget Office reported that the Obama administration’s deficit forecasts were a little on the low side – $1.2 trillion short over the next 10 years.
How reliable are those CBO forecasts? Not very… The deficits are likely to be a lot higher than either the administration or the CBO now imagine.
Stay tuned…
Bill Bonner
for The Daily Reckoning
Bill Bonner
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill’s daily reckonings from more than a decade: 1999-2010.
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“awarding a $100,000 contract, for example, to one of his constituent companies. Directly or indirectly, the company may have contributed $50,000 to the congressman’s re-election campaign…or may be ready to hire him if he is booted out of office…or may have hired his son or daughter…”
That is happening in every democratic election around the world. Democracy is only a branded name to cheat ordinary folk.
Historical kings, warlord, emperors are at least better, because they have paid their way out with their blood.
“lobbyists for pentagon contractors urge the nation to war for practical ones…specifically, to add to their own profits…and generally to boost employment …”
This may be a new economic measure, new economic principle or theory to be put in prictice. Financial derivative … innovation … upcoming trend ???
Hi Bill,
If you use Spanish for Numero Uno then,
use Numero Dos not Numero Duo.
I thought numero Duo was very cute. And numero Truo would have been just fine too!
“Even the right side of politics is corrupted. Instead of going to war for purely absurd reasons, lobbyists for pentagon contractors urge the nation to war for practical ones…specifically, to add to their own profits…and generally to boost employment.”
Classic. That’s why I read DR.
“awarding a $100,000 contract” is only a small matter. What happen if an elected
congressman awarded his supporter with a big casino license or a license to operate a lottery business? That will draw billions of sinful dollars from the gullible gamblers, which in turn a huge sinful sum will finally pass to the congressman.
Isn’t this the current system work flow of a ‘democratic’ economic system popularly in practice around the world?
George, I think he was going for the Italian “due” and missed by one letter.
But on the bright side it’s good news if you’re not an american and you own shares in a few military contractors. To that I say may the troops stay in Iraq and afghani for another 10yrs and God bless america with taxpayers that can keep funding my retirement.
Shrewd, calculating corruption will always lead to stupidity, senselessness, and earnestness.
I would like to see this paper that says that 8 of 10 professions are better paid by the government than by private sector employers. Having worked for a long time for county and state agencies, let me tell you–I’ve made a living not a killing. Maybe I need a federal job? But let’s examine this 8 of 10 statistic…do you know any rich public school teachers? Rich police officers? Do lawyers working for the DA office make more than good defense attorneys? The 10 professions samples must be a very small slice of the professions, perhaps cherry picked to reflect the very few professions in which the government pays more.
I’m with Jason. Every teacher I know has at least one part-time job or side business to keep the wolves at bay. I’ve never known a rich teacher, firefighter, policeman, or other “public servant”. I know OF them, you know, the ones who run our country.
“people use politics like a burglar uses a crowbar – to get something that isn’t theirs”
classic stuff Bill
Regarding the “rich” public servants, think you are missing the point…they are better paid (than private sector employees), not rich
The ’8 out of 10′ was Federal workers, not state and county workers. Don’t extrapolate and get your knickers in a twist.