06/18/10 Baltimore, Maryland – Today, we boldly announce a NEW THEORY about the way the world works.
Yes, dear reader, you are the first to hear it.
But before we get to that, let’s talk about what’s going on in the markets.
Stocks continued shuffling along like zombies…the Dow rose 24 points. But gold shot up to $1,248 – a new record.
Makes you wonder. Inflation is no threat to anyone…at least, not now. The economy is recovering – at least, that’s what everyone says. So why is gold hitting a record high? Something must be wrong.
Something is wrong.
Gold buyers are probably just like us. They’re not sure exactly what is wrong. But they know something is rotten in the state of Denmark. And Greece. And Spain. And New York. And California. In Washington, DC. And in the Gulf of Mexico.
We just had the biggest financial crack-up of all time. Even under ideal conditions, it will take people a long time to rebuild lost savings…to get rid of houses they can’t afford…and to restructure debt they can’t pay. While this restructuring and adjustment is going on, you’d expect the markets to be a little punky.
But instead of letting people get on with it, the zombies have moved in. At first, you hardly notice. An arm here. A leg there. Pretty soon, you’re dead!
The percentage of the economy controlled, guaranteed, or paid for by the government is increasing. Since the feds were already deeply in debt themselves, the only way they could spend more money was by borrowing more. You can’t cure a debt problem by borrowing more money. Net debt is going up. So, there’s something wrong. The economy isn’t recovering… It’s just not possible.
Which brings us back to our new theory…
Many are the ideas about how the world rumbles and trundles along. Most have some sort of dialectic at the center of them…some tension between one thing and another that causes them to oscillate to and fro…some yin and yang of opposing forces, constantly battling it out for control.
Good vs. Evil. Progress vs. Backsliding. The proletariat against the bourgeoisie. The moneyed elite vs. the people. Democracy vs. Totalitarianism. Freedom vs. Slavery.
Here we offer a new and improved theory with a dynamic of its own: the producers vs. the parasites.
Yesterday, we read in the local Washington newspaper that the parasites gained more ground in suburban Maryland. It was a minor issue on a minor page of a minor section of the paper. But that’s the way the parasites work. Little by little…an arm here…a leg there.
In the present instance, people who live in trailer parks can now feed on the people who own the ground beneath their feet. The state government has added a term to their contracts that neither party agreed to. Henceforth, if the trailer park owner wishes to close down his business, he cannot merely honor the terms of his contract with his lessees. He must also pay them off according to a formula decreed by the legislature. Trailer park residents have been zombified.
A bigger illustration can be found on the front page of yesterday’s paper.
BP has agreed to provide the zombies with $20 billion dollars of raw meat:
“BP backs $20 billion spill fund,” says The Financial Times.
BP is a producer. It makes something valuable. In fact, it makes the thing that is the pentagon’s most valuable and most important resource – liquid energy. It does so at a profit, also rewarding all the little old ladies, lonely orphans and rich sons-of-a-gun who own its shares. BP normally pays dividends; those dividends are currently suspended, as BP diverts cash to the spill fund.
Yes, it also makes mistakes, for which it must pay.
But circling BP today is an army of parasites. Zombies who toil not. Neither do they spin. Instead, they file lawsuits and try to get something from the producers without paying for it. BP’s Gulf disaster is a godsend for them. Like a busload of plump English tourists delivered to a bad neighborhood…
The Democrats have always been the recipients of big donations from tort lawyers. Many lawmakers of both parties are lawyers, which is to say they were probably parasites even before they entered public service. It is not surprising that their instincts are the same – to leech onto productive businesses.
Remember the giant tobacco settlement? In 1998, the tobacco companies lay down and opened their veins. A quarter of a trillion dollars was paid out in a huge class action settlement. The money was supposed to go to redress the damage done by smoking. But $19 out of every $20 found its way, instead, into the pockets of the lawyers, the activists, and the bureaucrats. That is to say – the zombies got it.
Will the oil settlement be any different? Not likely. The zombies will take most of it. Much of the rest will be used to turn honest working people into zombies. Instead of finding new work in new areas, for example, Gulf-area residents will be encouraged to stay put and collect checks. If they take up new work, the measure of their ‘damages’ will go down!
Here is our theory: in the beginning, an economy, a business, a nation…or even a family budget…is fresh, clean and dynamic. Over time, little by little, the parasites encrust themselves –like barnacles on a ship. Then, they grow. Eventually, they become as fat as ticks on a hound in the summertime…
At first, they are just nuisances. The economy can support them.
‘The masses want bread? Sure why not. Give them a circus too. And give my lazy brother-in-law a sinecure.’
Gradually, more and more people get their teeth into it. An unnecessary department in a thriving business. A subsidy to one group. A special favor to another. A make-work job…a handout…a bailout… An expense here. An extravagance there…
When things go well, the parasites take more blood. Heck, the economy can afford it. When they go badly, they grab the weakened host and pull it down in a feeding frenzy. BP, are you ready?
They succeed because in most cases it is generally cheaper to go along than to fight.
Without hardly noticing, the living become cooperative zombies too. The cigarette companies become tax collectors for the feds. The oil companies too. Doctors go along with nationalized health care. Teachers get their lifetime tenure. Ordinary citizens stand in line to be inspected at airports, counted by census takers, interrogated by tax collectors. Soon, the whole nation is zombified.
The zombies win. And then…there is collapse, war, revolution, bankruptcy… The zombies are killed off…new life begins.
That’s why the feds fight so hard to prevent a financial collapse. The last thing they want is a fresh, new, healthy economy…
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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Trade of the decade: sell gold, buy U.S. treasuries.
BB
Only one way to get rid of parasites.
From what I read here Bill is that from the very beginning and ever after the human species is a parasite on the planet. We can pretend what we produce is so very important when all along we produce “things” for the zombies. And who is doing the producing? Zombies of course. Hmm. Zombies producing for Zombies.
like 99 cents is so much lower than $1.00. Pathetic
Another angle to the Zombie analogy that I find irksome – the reference often made to “taxpayers”, as if a taxpayer is an essential part of society. One can pay taxes without producing anything, simply send a portion of welfare to the tax collector.
It’s all about production, or being a producer or not. I’m thinking a Zombie is a producer who has been lured into idleness by the easy money awards? Our society cannot operate like a perpetual motion machine. Production is critical or the machine fails.
Teachers with lifetime tenure… hmm… not so sure about that. A local district has gotten rid of some 50 teachers in the past decade, about half of them tenured. They used threats, trumped up charges or accurate indictments of incompetence but one by one they all left.
Tenured or not, if they want you gone, you’re gone. Tenure is just access to due process, and if you’ve really done wrong, you’re gone.
I used to think that teachers were overpaid lazy parasites, then I got to know many. They basically work for junk pay in the beginning of their careers (first 10 years) then get paid OK after that in the better states, like nothing in most other states. They babysit people’s children much more efficiently than daycare since, in addition to taking care of the kids they also teach them, unmotivated, often obnoxious, rarely applied children.
States harass teachers to get certifications and certifications, masters degrees are a must, constant retraining a must. That’s expensive.
Can you read? I’m the youngest of many children. My parents were too tired to teach me to read by the time I got to kindergarten, but I eventually learned thanks to my teachers.
Summer is coming and teachers will have off if they can afford it. Those who can’t will bartend and golf caddy and whatnot, but those trades are a welcome relief, because after October, teachers will focus 7 days a week (plus nights) on getting the students through whatever state exams.
The pensions are too high and teachers need to contribute to their retirements, but the workload is tremendous and unless you’re doing it or living with it you don’t understand how rough it is.
Your kids read, Bill. Did you teach them reading, writing and arithmetic? Or did you pay some tutor to do it for you?
I was thinking about this today: what percetage of American jobs actually produce anything that can be used to make more wealth? Not defense (that destroys wealth). Not the legal sector (that redistributes wealth). Ditto for most of IT. Not heathcare (some is spent keeping the producers going, but most of it is spent on non-producers or those declining in production). Energy could be used to support production, but since most of our economy does not produce anything, it doesn’t. The services industry? You get your service and that’s it. It doesn’t last. Ditto for travel. Ditto for transportation. Real estate is over for the forseeable future. Finance? Don’t make me laugh…what’s left? We don’t manufacture anything anymore. This is a destroyed economy-dwindling economic food for parasite and host. At least we still produce food. I think agriculture is about all that’s left!
The invisible hand is a zombie maker.?
Bill, your defense of the corporate criminal class is as despicable as the $20 billion slush fund that the Republicans thought up (yes, it was their idea, God help us all).
If I accidentally kill someone in the course of operating construction machinery, I am liable for the damage that I cause, and guilty of manslaughter. Likewise, BP is liable for the damage they caused, and guilty of 11 counts of manslaughter. Every exec that is responsible for the decision to use seawater instead of mud in the bore hole should be sentenced on 11 counts of manslaughter, and sent to a real prison, not a white collar camp, where they can make friends with Ben Dover.
Many of the people who are compensated for the damage to their lives will squander the money, others will use it to help them start their lives over again. Either way, if you agree that bailouts are a moral hazard you ought to be able to see the moral hazard of letting BP go unpunished for the damage that it has caused. Otherwise, you don’t have any principles, you just care about whose ox is being gored.
The invisible hand is a zombie.
Makes me think about what people in the soviets were saying before the USSR fell apart and I think I read it here: they pretend to pay us, we pretend to work. Smells like the end game is getting closer.
I call BS on the “Poor BP” fascist meme. BP greased the wheels gladly with campaign bribes and cut corners to drill cheaper.
F@*# ‘em. And the poor dowager shareholders. They didn’t care that BP was killing activists in Africa or that BP spilled in Alaska five years ago.
If oil is so GD precious, BP sure does blow a lot of it into the hinterlands.
Don’t want to feed the lawyers? Then don’t f*&# up when drilling for oil. Or sell cigarettes.
I’m right.
America’s greatest threat is not from foreign enemies, but from Marxists that slithered into U.S. Government.
Historically, when Socialists like Obama have been elected to government, they thrive like cancer—targeting healthy economic markets and individuals with new and higher taxes to pay for public welfare programs. Obama is a red diaper baby that inherently does not represent Americans, but a Marxist ideology—that mandates forcing socialism on U.S. Citizens—even if that means destroying the U.S. economy in addition to abolition of the Constitution. Obama’s has already forced unaffordable health insurance, new taxes and regulatory costs on businesses that will inhibit investment and hiring of new employees for years.
What might happen politically in America if the Obama government suddenly stopped extending unemployment and other assistance paid millions of Americans: In foreign countries where the economy and government went broke, millions of unemployed and others dependent on government handouts responded, by voting socialists into power, worsening the economy. If Obama spends America into bankruptcy, it is foreseeable millions of disparate Americans might accept, even welcome a hybrid form of Marxist/socialism.
Something I realized right out of high school was that everywhere I went, and with nearly everyone I talked to, there seemed to be this disease…a disease that had permeated and infected people’s minds and every part of society. It’s interesting, Bill, that you write about this very same thing. I haven’t referred to it as “zombies” though, I call it “the disease of mediocrity.
Reminds me of a Hugh MacLeod cartoon: “The web has made kicking a$$ easier to achieve, and mediocrity harder to sustain. Mediocrity now howls in protest.”
Speaking of parasites, I am waiting to hear about banksters and especially central banksters from BB. Up to now, only Mogambo dared to speak about it.
It’s only the entire plot of Atlas Shruhhed and the core or Ayn Rand’s Objectivist philosophy.
Sorry Bill, I can’t credit you for this one – though you are absolutely correct!
This is why philosphy is so important and thus a written Constitution embodying that philosphy.
IF we had been acting on the premises of Rand’s philospohy we would have STAMPED THE ZOMBIES OUT wherever and whenever they arose!
…and 99 Cent is wrong again…
That is business trend. An empire rises and it then falls. Nothing is permanent in this world. A healthy child grows up and starts declining and the curve progressively goes down at around middle age. That is the life cycle moving in tandem with time. As the song sings, “only time will tell”. US once has its wonderful era and proven as the most formidable nation. Well, as you grow older you no longer able to flex your muscle at your whim. That is natural, the cycle, the trend, the destined course – birth -> aging -> illness -> death.
No big deal about it.
I’m always wrong. So is Rand and the zombie bunch that follow her parasitic fantasies. Imagine. Zombies stamping zombies out. Thats good.
You’re right. You’re always wrong.
Are you always right, Right? There is a question mark after your pseudonym, Right?. Are you confused? Confusion is the first step in understanding that everyone is right some of the time and wrong some of the time. Except those that are confused all of the time and keep telling themselves and everybody else who will listen that they are always right. Right? So lets go back to the theory of Zombies who think they are always right and have trouble believing they could be wrong. They are really confused. Pitiful.
This is not new theory. This is the same old republican Ronny Raygun bullshit about how the welfare mother in the cadillac is ruining our economic system. Last year they said the illegal immigrants (with no money) had taken down the housing market.
Don’t look at the 600 trillion hedge funds betting parlour,don’t look at the billions pulled out of the sytem by the big oil companies every year to provide our energy, don’t look at the milions of jobs sent overseas to provide larger profits, no, no , no
blame it on the fisher man in the gulf coast, blame it all on the unemployed.
You are such propaganda bullshit.
Everything is neither right nor wrong. It boils down to your perception. Confucius derived his brand name from the word ‘confusion’. He might think he was always right, but then others perceived his mind in a state of confusion.
The highest level of stupidity is achieved when someone is caressing, promoting, catering, aiding, enriching a bunch of zombies. To the magnitude of 9.9 on the richter scale, US has achieved the only highest award in this sphere of ‘humanitarian’ aid since the postwar era. Haha.
If I were in the play, I would rather dump all my money in the blue ocean which at least gives out an echo ‘doom’ than to feed those zombies who will later grows up and piece-meal you. It is imperative, municipalities in all over the nation, should put up signboards with inscription of warning ‘Beware of encroaching zombies’.
I resent the total generalization of lawyers as parasites. Lawyering, like most other jobs, can be productive or parasitical. Productive lawyers are like societal plumbers and are useful in facilitating peaceful and progressive relations between people.
Also, Socrates is right.
“Vashti (Bill Bonner), Yo’ is em’ty haided!” Gone With the Wind. You are such a gifted writer, I can’t understand where you get some of your nonsensical ideas. In America, the leeches and parasites are the denizans of Wall Street and thir associates. The poor and unproductive are the nation’s labor resources. You have to feed the horse even when he isn’t pulling the plough. How many times do I have to say that!!?
Losing your job shouldn’t be the equivalent of immediate execution, should it? When the nation moved west, they did it by wagon train so they could help each other out. I don’t like your Ayn Rand notion of the good life. It is too much like living in TV’s “DEADWOOD” where might makes right and robbing or killing someone is no crime unless it offends someone more powerful than you. For crying out loud, think through some of those crazy notions before you publish them.
Hi Great Lawyer,
Generalization means predominantly, in majority, in representative manner, overall trend or general direction. If census indicates 50% in the group, you are still proud of being in the profession. Unfortunately, if census produces above unwanted 60% figure, you may be in the bracket. Please carry out a survey to find …..find