300 Cretins

The Daily Reckoning PRESENTS: It takes a great deal of courage to stand with only 300 men against 100,000. However, unlike the Spartans at the Battle of Thermopylae, the small group of men who goaded President Bush into Iraq did so at no great personal sacrifice. As Bill Bonner explains, it is the common man who will suffer the greatest sacrifice of this War on Terror. Read on…


Go tell the Cretins, you who read;
We took their orders, and are dead.
– Based on inscription at Thermopylae, with apologies

The Bush administration is hoping that the new film, 300, will give the troop surge a lift with the public. The film glorifies the sacrifice of 300 Spartan warriors who held back an invading army of over 100,000 Persians in 480 B.C.

Choosing their terrain well, the Spartans managed to neutralize much of the Persians advantage; while the Persians had many, many more troops, they could only get a few of them to the line of battle at a time. But the Greeks could see they were on the losing side of this fight. The Thespians, fighting alongside the Spartans, withdrew while the Spartans decided to stay and fight to the last man. They might have done so as a purely military necessity, holding off the enemy so as to give their allies time to retreat and regroup; or they might have fought on simply for the glory of it. We don’t know.

We do know that they managed to hold their ground for a couple more days, until a fellow Greek, Ephialties, betrayed them by showing Xerxes how to outflank his opponents. Then, the Persians got behind the Spartans and rained down arrows upon them until they were all dead.

Leonidas’s body was recovered, beheaded and crucified. But the rest of the surviving Greeks were then able to take up the fight; and, in a number of calamities and misadventures, the Easterners were finally driven back across the straits to Asia Minor. Western civilization was saved.

According to today’s neo-conservative apparatchiks, we are once again involved in an epic struggle – a clash of civilizations between the free West and the tyrannical East. Paul Wolfowitz, Douglas Feith, Richard Perle, Philip Zelikow – this handful of men (probably no more than 300 of them), pushed a bright, shining war on a dim yahoo of a president. Together, they see themselves like Leonidas at the Pass of Thermopylae, guarding our western way of life, without even getting their suits dirty. The sacrifice of others is worthwhile, they believe.

But now, after four years with neither victory nor defeat in hand, it is too late for earnest criticism; instead, the time has come for gratuitous ridicule.

The targets are many. For instance, against whom the war in Iraq is being waged (or why) has yet to be fully clarified. Every question on the subject brings a response that only deepens the mystery.

But the costs are becoming clearer every day. So far, Britain’s Ministry of Defense admits to having spent 5 billion pounds on the war in direct costs. Indirect costs are sure to be many times that figure. America’s total is much larger – $505 billion of U.S. ‘taxpayers’ money’ has been spent or approved. The biggest of all liar’s loans?

Of course, we are already in the Land of Lies. Neither the British taxpayer nor his American counterpart has any spare money; their taxes were already earmarked for other boondoggles. Still, the U.S. President asked for another $100 billion of it on Monday, and is expected to request $140 billion more for 2008, bringing the total to over $700 billion. Looking ahead, to the cost of caring for wounded and incapacitated soldiers, the whole thing is expected to cost more than $1 trillion.

Since we’re tallying, we cannot fail to mention the cost in lives. 3,205 U.S. soldiers have died, and 134 British soldiers. More than 24,000 Americans have been seriously wounded. Iraqi casualties, if anyone is keeping score, may top half a million.

Meanwhile, George W. Bush asked Congress for the latest $100 billion draw, without strings and without delay – or else the war might have to be called off, he seemed to warn. The politicians bent over and checked under the cushions, but the spare change they recovered came nowhere close to $100 billion. They are already facing budget deficits of a half a trillion over the next two years. Where would the extra money come from? What would the extra strain do to the finances of the nation…or to the value of the dollar? How was the investment expected to pay off? No one knew. No one even asked.

But as for the strings, everyone knew exactly what the chief executive was talking about -even the chief executive himself. Lawmakers have come to see the war, not as a real war, but merely as just another spending opportunity, with live ammunition. To the latest demand for cash, the polls have attached a number of pork-barrel provisions, including $25 million for spinach growers, $100 million for citrus growers, $74 million for peanut storage, $4 billion for ’emergency payments’ to farmers, and $283 million for milk subsidies. Who says there isn’t progress in human affairs? The U.S. congress has managed to improve upon the old Roman formula – they’ve combined bread, circuses and war in a single spending bill.

Every war has its profiteers. Neither in love, nor in war do you stop to count the costs. But a phony war is a bigger opportunity than most, because there is no patriotic necessity to win. Unlike the Spartans, the Cretins know Iraq poses no real danger to the homeland. So everyone gets into the spirit of the war as it really is.

Halliburton, Lockheed, and Bechtel inflate prices, take money for nothing, and gouge taxpayers for useless weapons and unnecessary supplies. In one report, truckers reported that they were asked to drive empty trucks back and forth across the desert, carrying sailboat fuel so that contractors could bill the government for delivery. A total of $9 billion has been officially lost or unaccounted for.

War critics will complain about the waste of money involved. They will point to this week’s polls, showing the war to be so ineffective that the average Iraqi now regards democracy with suspicion, and finds it acceptable to kill U.S. and British troops. The more the U.S. government tries to improve the lives of the Iraqis, the more Iraqis seem to want to get even. Given the deadly drift of things, wasted spending may turn out to be the best spending the Bush team did.

“There will be good days and there will be bad days,” said the American president, stoically. And he’s right…but they won’t be shared out equally. The spinach growers, milk producers, and weapons contractors will get the good days. The poor grunts, the Iraqis and the taxpayers will get the bad ones.

But what about the Cretins? In the film, as in the battle, the Spartans were wiped out. “Spartans. Tonight we dine in hell,” Leonidas was said to remark. Later, a shower of arrows so thick they blotted out the sun, according to Herodotus, came down on them. The Spartans fell; but Greece was saved.

We don’t know how far the parallels go. The U.S. military presence in Iraq hardly seems like 300 Spartans defending the homeland. Instead, it seems more like the Persian Empire invading someone else’s homeland.

And the 300 Cretins? Are they really protecting western civilization? Was it worth the billions spent and the thousands of corpses? We don’t know, but we have a feeling that there is already a table reserved for them in Hell.


Bill Bonner
The Daily Reckoning
March 23, 2007

Editor’s Note: Bill Bonner is the founder and editor of The Daily Reckoning. He is also the author, with Addison Wiggin, of The Wall Street Journal best seller Financial Reckoning Day: Surviving the Soft Depression of the 21st Century (John Wiley & Sons).

In Bonner and Wiggin’s follow-up book, Empire of Debt: The Rise of an Epic Financial Crisis, they wield their sardonic brand of humor to expose the nation for what it really is – an empire built on delusions. Daily Reckoning readers can buy their copy of Empire of Debt at a discount – just click on the link below:

Empire of Debt

In our hotel room, three bright, red apples were available to us. Firm, well shaped…returning late from our trip to Switzerland, they looked like the perfect substitute for dinner.

We took a bite of one. And what’s this? What a disappointment! The thing was foul…mealy…with a peel that could have passed for plastic.

Apple growers seemed to have succeeded in creating the perfect hotel apple. It looked delicious…but tasted like cardboard.

Nikita Khrushchev was ahead of his time. Do you remember, dear reader, on his famous visit to NY, he went to an American supermarket. “The Americans have 246 different variety of apple,” he remarked, or words to that effect, “and they all taste terrible. It’s enough to make a stone weep.”

He should have bitten into a few more. In the Union of Soviet Socialist Republics, on the other hand, you would have had a hard time finding an apple at all.

But he had a point. How much of progress is a fraud, we wonder? One man’s great innovation is another’s great pain in the neck. The cars are better…but the highways are so crowed that speeds have fallen. Communications are better…but now people with nothing to say walk around talk, talk, talking all day. You can get a credit card more easily…but so can you more easily get stuck deep in debt.

A man, who must have mistaken us for someone else, asked: “How do you account for your success?”

“Television,” we replied. “We don’t watch it.”

For every mind that is better informed and better entertained by TV, there must be 100 that have been turned to mush.

But enough about apples and TV…down to business.

We checked the financial pages this morning…and we are pleased to report:

It’s all good again.

Yes, remember that correction at the end of February? You’ve probably forgotten, just like everyone else – because there wasn’t much to it…a spasm of doubt, more than a correction. Speculators got worried about problems in U.S. subprime lending…and sold off China!

That’s the official explanation. So far, it seems to be holding up.

Most of the world’s stock markets are already back in the black figures for the year. And get this…as expected, Ben Bernanke is now hinting that rates might fall. That was all U.S. investors seemed to need to hear – another big wave of rate cuts!

“For the sixth straight month, the Fed did nothing,” writes our old friend Rick Ackerman, “but we’ll take Bill Gross’s word for it that this particular instance of nothingness signifies easing just ahead.

“With Helicopter Ben talking incessantly about the supposed ‘threat’ of ‘inflation,’ it didn’t take a rocket scientist to figure out that inflation was the least of his concerns. Like the rest of us, the Fed chairman has known all along that the ‘good’ kind of inflation – the kind that pumps up everybody’s assets so that those assets can be hocked to the moon – is all that stands between our spectacularly over-leveraged economy and a Second Great Depression.”

Still worried about subprime? Don’t be. It’s a relatively small, containable problem, says the U.S. Treasury Secretary. And if it isn’t, the Fed is going to make sure there’s enough cheap credit around to keep the bubble inflated.

Worried about trade deficits, federal deficits, learning deficits, attention deficits? Whatever kind of deficit has you squirming…you can stop. It’s all good. All good.

Even the financial companies – such as Goldman Sachs – are coming back. They’re not yet back to their highs, but they’re headed in that direction.

Oh, and don’t worry about derivatives gone wild. Relax; the Fed says derivatives are good things. They help spread the risk around.

In that, they are undoubtedly right. The risk that was previously identifiable and controllable (a small bank wouldn’t lend ITS money to a man who couldn’t pay it back) is now everywhere. And it’s all good. All good.

Forget trying to find the single rotten apple that will spoil the barrel. The whole lot of them have gone good.

At least, that’s the theory.

More views below, but first, the news:


Chuck Butler, reporting from the EverBank world currency trading desk in St. Louis…

“The housing slowdown is going to really start impacting the employment picture as we move into what is usually a strong construction season. Compared with the same time last year, initial claims are up about 4%, while continuing claims are up about 3%.”

For the rest of this story, and for more market insights, see today’s issue of The Daily Pfennig


And the views we promised yesterday…

*** The subject before us is the direction taken by modern politics. Why is George W. Bush telling Latinos that America is committed to ‘social justice’ rather than the more modest, old-fashioned ‘justice’? And how cometh it to be that ‘liberals’ in America are opposed to the ‘liberal’ ideas of the 19th century…and that now even ‘conservatives’ in America are opposed to the ‘conservatism’ of their grandfathers?

In the discussion that follows, we propose a theory.

We recall from yesterday that there are two large themes in modern political theory – individualism and collectivism. Individualism is the idea that a man should look after himself. ‘Justice’ is done, according to this view of things, when he isn’t improperly interfered with. The world, then, takes whatever shape it takes, based upon mankind’s aggregated individual results.

Collectivism, on the other hand, is that idea that the political ‘collective’ – the state – should look out for everyone. It implies that the shape of society – the outcome – is not left to chance, but decided collectively, or by the collective’s elite ministers. ‘Social justice’ is what you get when the elite likes the results.

America, in theory as in actual fact, was a nation founded on the rock of individualism. It didn’t matter what the elite liked. But now its ‘conservative’ president proposes a concept of justice that Marx or Lenin would have appreciated. Not only that, but he spends the nation’s blood and treasure trying to make governments half-way around the world more to his liking. And he takes hundreds of billions of dollars from individuals – many of them not even born yet – to reward favored groups with drugs, bread, circuses or federal contracts.

Your author has lived overseas for more than 10 years. Each place he has lived or visited has its quirks, but in every one, the individual seemed to enjoy about as much liberty as he did in America. Everywhere, a person is taxed, controlled, regulated, licensed, rewarded, privileged and pampered – according to how the ruling elite chooses. What gives? What happened to American individualism?

We mentioned yesterday how our president is caught in the same trap that bedeviled Wilson and Teddy Roosevelt. They wanted to flex America’s new muscles. The United States became the largest economy in the world in the early 1900s. Now that they had power, they wanted to engage in power politics…to shove and scrap…to wear funny hats with giant plumes on them…and to sit down at a bargaining table with French, British and Russian ‘charge d’affaires’; oh, even the sound of it sent frissons down their greasy backs. They wanted to carve up the world…decide the fates of nations…redraw the map of the world. Of course, the whole spirit of it was contrary to the American ideal, wherein a free people determine their own fate and decide their own form of government.

And poor Wilson and Roosevelt were still working within the old American system. The people back in Tennessee and Georgia wanted no part of world domination. They still had the U.S. Declaration of Independence on their walls. They still heard Washington’s words – ‘avoid foreign entanglements’ – echoing in their ears. They still thought only Congress had the power to declare war; the bumpkins didn’t mind a fight, but they wanted a damned good reason for it.

And so the old frauds had to dissemble…they had to talk about ‘making the world safe for democracy’ and about ‘protecting American interests’; of course, there were none…but the rubes wouldn’t know. The whole planet needed to be more like America itself – freer, more prosperous, and more democratic.

George W. Bush continues the humbug, but he has a much easier time of it. Americans have generally forgotten the idea of individualism. They want public schools, Social Security, and free drugs – just like the krauts and the frogs. Bush II comes up with his preposterous “War on Terrorism” and nobody laughs, because Americans, like almost everyone else in the world, have all become collectivists. If a man’s town is flooded, he expects the feds to come in with donuts and house-trailers. If a man’s wife is sick, he expects the feds to offer medical treatment…or at least to regulate the marketplace so it is ‘affordable’ for him. If his house is repossessed, he turns his face to Chris Dodd in Washington…and the next thing you know, the windbag senator is proposing to bail him out!

And if a handful of fanatics blow up a couple of office buildings in New York City, he wants the Marine Corps to kick butts all over the world. Whether they had anything to do with the crime barely matters to him; what he wants is for his government to remake the face of the entire world, if necessary, so it is a more agreeable place for him.

The old pioneers…the settlers…the farmers…the inventors…the robber barons – all the people who built America – they were stupid and they were smart…they were wicked and they were saints. But no matter what they were…they stood up straight. How is it possible that these rugged, stalwart Americans evolved into a race of such fear-driven, collectivist drips?

Stay tuned…dear reader…stay tuned.

*** More commodities trading tips from our resident Maniac Trader, Kevin Kerr:

“If you’re going to trade commodities profitably, it’s vital that you understand the inner workings and psychology of the market participants, as well as what actually goes on in the pits. By having an understanding of what goes on in the pits and with the floor brokers, as well as with your own broker on the trading desk, you’ll be able to empathize with them and know when to ask for more and when to ask for less.  Knowing what your brokers can do for you and what is beyond their power makes them appreciate you and consider you an ally.  It puts you on their favorite clients list, [which is] not a bad place to be. It’s always a good idea to have your broker like you because he or she will look after you better. While any ethical broker should, and generally does, do his/her best for each client, chances are that they would tend to go above and beyond what’s expected of them if you take the time to establish a rapport.

“You don’t have to move in together, but just show that you’re making an effort to understand what they do and how they do it.  The best brokers will call you when they see an opportunity or, in other cases, a problem, with your account. They will be quicker to do this if they like you. They can tell you what trades are simply not a good idea, help you understand terminology and even decipher the various industry reports, and a lot more. Even better, brokers like clients who have a basic understanding and try to learn the workings of the market. When you have that understanding you have an instant edge over the vast majority of novice commodities traders.”

*** What’s the latest on the India stock market? Glad you asked.

“We’re buying…we’re finding a lot of value,” says our new friend, Ajit Dayal. From his office in Bombay, Ajit runs a mutual fund focusing on Indian shares. “The Index is very high. You look at it and you think Indian shares are too expensive. But the index is not very representative. It includes only a handful of very large cap corporations. And they are too expensive. But overall, stocks in India sell for only 14 times earnings. And they’re growing earnings at more than 20% per year. You’d have a hard time finding those numbers anywhere else in the world.”

Ajit is bullish on India. There are not many things we are bullish on, here at the Daily Reckoning. And about none of them are we bullish without reservations. Our reservation about the Indian market is that it is too far away…both in distance and in culture. We don’t think we could ever understand it.

“Useful information declines by the square of the distance from its source,” we recall.

We’re a long way from Bombay.

Of course, we’re a long way from Tokyo too…and we’re bullish (with reservations) on Japan.

The Daily Reckoning