Love in the Time of Sildenafil Citrate

Today, Bill turns from the examining the financial world to looking at much serious matters – life, love and the pursuit of happiness.

We have lately read of a case, in England, of a couple who came to despise each other so greatly they partitioned off the house – right up to the front door. One half was his, the other hers. Thus did they live for many years, until grown old, the poor woman had had enough. She committed suicide. Only two weeks later, the man – freed of the terrible demonic witch to whom he had hitched himself – blew his own brains out.

We only mention the story as a suitable opening to this week’s rumination – on love. It is a subject so profound a man risks sinking in; before you know it his head has disappeared below the surface. But we promise to treat it only in the most superficial and unserious way. That is, we promise to give it what it deserves…

There was a time when respectable marriages were based on serious concerns – money, property, position, and so forth. Samuel Johnson suggested that all marriages should be arranged by the Lord Chancellor. The history books are chock-a-block with young maidens – often only 12 or 14 years old – who were put on a ship to wed some faraway rascal with a kingdom or a fortune. Some of these marriages ended badly, of course. But many probably were as happy as the typical marriage today.

In some benighted parts of the world, notably the Islamic part, arranged marriages are still common. A man may have never seen more of his bride than her eyes – and scarcely spoken to her – before he is expected to agree to keep her as long as both shall live. A friend of ours, from Pakistan, was given the choice of three men – all of them distant cousins or family friends. She chose one of them. As near as we can tell, she is as happily married as anyone we know. And the divorce rate is very low.

But in the modern Western world, arranged marriages have given way to deranged ones. People are expected to fall in love with each other – that is, they are expected to take leave of their senses…and while in this addled state, they are not only allowed, but encouraged, to sign a contract that is meant to last a lifetime. It is no wonder that half of them end up wanting out of the deal. What is amazing is that the other half stick with it.

A friend of ours, recently remarried, offers this reflection:

The Downfall of Marriage: The Pursuit of Happiness

"Having now been re-married for a month, I have been ruminating on the subject of marriage and the pursuit of happiness. It is an interesting topic. Anecdotally, one gets the impression that many married men are not happy. In today’s culture, where images of delectably beautiful women are being sent your way 400 times a day, it is hard to be satisfied with a fat, dumpy wife. Then, of course, there is Hollywood playing fast and loose with your expectations. No doubt many marriages have stressed when guys determined that they would rather help Angelina Jolie come to grips with some lingering curse from antiquity than help the wife carry in the groceries.

"Be that as it may, the man who has broken up more marriages than anyone else is not some pretty boy like Clark Gable or Brad Pitt, but a homely Oxford don and medical researcher, John Locke, who insisted in ‘An Essay Concerning Human Understanding,’ that the pursuit of happiness was the highest goal of life. But rather than play ‘Chinese Whispers’ with Locke, let him speak for himself. From ‘An Essay Concerning Human Understanding,’ (1690) by John Locke:

"…God Almighty himself is under the necessity of being happy; and the more any intelligent being is so, the nearer is its approach to infinite perfection and happiness. That, in this state of ignorance, we short-sighted creatures might not mistake true felicity, we are endowed with a power to suspend any particular desire, and keep it from determining the will, and engaging us in action. This is standing still, where we are not sufficiently assured of the way: examination is consulting a guide. The determination of the will upon inquiry, is following the direction of that guide: and he that has a power to act or not to act, according as SUCH determination directs, is a free agent: such determination abridges not that power wherein liberty consists. He that has his chains knocked off, and the prison doors set open to him, is perfectly at liberty, because he may either go or stay, as he best likes, though his preference be determined to stay, by the darkness of the night, or illness of the weather, or want of other lodging. He ceases not to be free; though the desire of some convenience to be had there absolutely determines his preference, and makes him stay in his prison.

"52. The Necessity of pursuing true Happiness the Foundation of Liberty.

"As therefore the highest perfection of intellectual nature lies in a careful and constant pursuit of true and solid happiness; so the care of ourselves, that we mistake not imaginary for real happiness, is the necessary foundation of our liberty. The stronger ties we have to an unalterable pursuit of happiness in general, which is our greatest good, and which as such, our desires always follow, the more are we free from any necessary determination of our will to any particular action, and from a necessary compliance with our desire, so upon any particular, and then appearing preferable good, till we have duly examined whether it has a tendency to, or be inconsistent with, our real happiness: and therefore, till we are as much informed upon this inquiry as the weight of the matter, and the nature of the case demands, we are, by the necessity of preferring and pursuing true happiness as our greatest good, obliged to suspend the satisfaction of our desires in particular cases."

"This insight not only made it into the Declaration of Independence," our friend continues, " in the famous trilogy with Life and Liberty, it also informed a major shift in the way life is experienced. Locke became the God-father of romantic love. Forget Don Hall. Hallmark Cards should have a portrait of John Locke in the lobby. By drawing attention to happiness and self-fulfillment as the central focuses of life, Locke gave the Valentine card, the soap opera and the divorce lawyer their start. Romantic love was the undoing of marriage as it had been known. Romantic love set people yearning for more than obedience, and social support (property accumulation) from marriage.

"You may think this is piffle. Or brilliant. In either case, this isn’t my idea. It is a copyrighted insight of Stephanie Coontz, author of Marriage, a History: From Obedience to Intimacy, or How Love Conquered Marriage.

The Downfall of Marriage: Brazil

"As a historian, Stephanie Coontz strikes me as so gleeful about the downfall of marriage that she is probably a lesbian. She certainly likes the idea of freeing women from the clutches of men. But that is an impertinent and immaterial aside. Having just wed for the second time, and spent the last few days in Brazil meeting my new wife’s extended family, I’ve been thinking again about marriage, intimacy and associated ramifications. Hence, these thoughts.

"Brazilian consumers increasingly believe they can find happiness purchasing various branded products, from McDonald’s hamburgers to Louis Vuiton bags. Even the homegrown products of Brazil are bending to reflect the "pursuit of happiness." Brazilian soap operas are a major export of the country’s burgeoning entertainment business. They are translated into lots of languages and marketed in Eastern Europe, Asia and Africa, where eager audiences study them for clues about "pursuing happiness" on $6,500 per capita or less.

"The characters in Brazilian soap operas divorce and engage in all manner of sexual affairs. But notwithstanding the incitement of soap operas to achieve fulfillment and intimacy, the divorce rate in Brazil is still minimal, approximately 1/20th the divorce rate in the U.S. In fact, today’s divorce rate in Brazil is lower than it was a century ago in the U.S., where we have longer experience in institutionalizing John Locke’s ‘pursuit of happiness.’ As Princeton historian, Hendrik Hartog put it, ‘Though marriage continues to offer the fantasy of continuity and permanence (till death do us part), all sane people who enter into it know that it represents a choice to marry this person at this time and that if living with this person at a later time no longer suggests the possibility of happiness, that you are entitled (have a right) to leave and to try again.’ Americans are more prone to exercise that right than most other people, perhaps because we have a more idiosyncratic and insatiable concept of happiness."

Last night, the moon was full. It lit up the clouds and the countryside in a remarkable way. You could see, but you could see nothing distinctly, nothing clearly. It was an ideal light for romance. We walked out into the garden and wondered…

Can you really pursue happiness as if it were a getaway car? Locke acts as if happiness had just held up a local bank. If you could just catch up with it, you could lock it away for life. But it is funny old world, as Maggie Thatcher used to say. Just when you think you’ve got your hands on the s.o.b., he vanishes.

As near as we can determine, people are happy by accident, not by intention. They are born happy. Or they are lucky enough to make a happy marriage, rather than an unhappy one. It doesn’t seem to matter whether they choose it…or it is set up for them. Happiness finds them; they don’t find it.

"I think these modern ideas about marriage are nonsense," said your editor’s mother when the question was put to her. "It all depends on what you mean by happiness. People complain about not being happy…they spend all their time trying to find happiness…then, they still aren’t happy. So they get a divorce. They should think of other people’s happiness. That’s when happiness sneaks up on them."

Economists are tempted to pull levers and turn knobs – cutting the price of credit is a favorite twist – in order to make people more prosperous. Psychologists have their own buttons to push to try to make them happy. Investors think they can get rich, too, by making the kind of choices Locke describes. Will they get what they want? Or what they deserve?

We don’t know. But last night…we had a thought…romance may be all moonshine. We may go blind and limp from drinking it. Still, it may be worth it.


Bill Bonner
The Daily Reckoning

July 22, 2005 —  Ouzilly, France

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).

Yesterday afternoon China announced it was ending its policy of pegging the yuan to the dollar. Henceforth, the currency would be pegged to a basket of currencies of which the dollar was just one.
Will the change fill the hearts of America’s exporters with joy, and shipping containers with American-made products destined for China? Will the world economy be healthier now that China’s evil monetary policy has been reformed? Will Thomas L. Friedman and other delusionals be satisfied, now that someone has jerked a lever? Will Americans now be able to pay their debts without reducing their standards of living?

We don’t know. But if so much happiness could come from such a simple act, you’d think someone would have jerked the lever sooner.

It’s Friday. The sun is shining. We will take a wild guess: the change will have no effect. The problem has never been the yuan. China has no great trade imbalance with any country other than America. Switzerland is able to sell its precision tools. Germany is able to sell its luxury cars. France is able to sell its foie gras and handbags. Japan is able to sell whatever it sells. The cheap yuan didn’t bother them, even though their prices rose in China as the dollar-linked yuan fell.

Establishing a peg with a basket of currencies, China solved two problems at once. First, it got the U.S. protectionists off its case. And second, it managed to stabilize the yuan against the other major currencies with which China does business. The yuan may not move against any single currency – the dollar being the most likely to lose ground – but it will not go far out of line with the group of them.

The yuan itself was never a real problem. But it was a convenient scapegoat.

Another convenient scapegoat is terrorism. Alan Greenspan mentioned it two days ago, in what were probably his last remarks to Congress. He said he saw two risks to the world economy – terrorism and protectionism.

What else could possibly go wrong? Greenspan said, "Since the late ’70s central bankers have generally behaved as though we were on the gold standard." We hold our breath. We can hardly believe it. For a moment, we wonder if the Fed chairman is still compus mentis. We smell the sour sentiment behind his words: He has done everything right…if anything goes wrong, it’s not his fault. Outsiders – terrorists or politicians – will have to mess things up.

But it is the words themselves that are remarkable, almost incredible. If the Fed had acted as though there were a gold standard, then there was no need for a gold standard…or no reason not to have one – a position that no modern central banker would take. We do not have a gold standard precisely because central bankers do not want to act, and have not acted, as though there were one. A gold standard limits the amount of new money available to increases in the quantity of gold. This limitation puts central bankers in their place and keeps them there. If both the yuan and the dollar were linked to gold there would be no discussion about what the proper peg to each other should be. And if the American money were linked directly to gold, Americans would have less money to spend…less of a trade deficit…less debt…and less opportunity to get themselves into a real jam. And if the dollar had been supported by gold, Alan Greenspan wouldn’t have been able to create the biggest bubbles in history – bubbles in U.S. and European stocks, real estate all over the world, dollar-based credit, Chinese capital investment…not to mention epic bubbles in conceit and flattering hallucinations.

More news, from our team at The Rude Awakening:


Eric Fry, reporting from Manhattan…

"Rumors of the commodity bull market’s demise may be as premature as Wall Street’s recent ‘Reduce’ ratings."


Bill Bonner, with more miscellaneous views:

*** There has been a very interesting discussion between our various editors regarding China’s decision to revalue the yuan. Here are some snippets for you…

"I don’t know if I’d get too excited about China’s new ‘purchasing power’ – the change comes to something like one-quarter of one cent, says Chris Mayer. "And, that could easily swing the other way, if China succumbs to the temptation of printing money, for example. Assuming the change helps control domestic inflation implies that you trust the Chinese central bankers more than the central bankers in charge of the basket of foreign currencies…could be, but it is certainly no cinch."

Dan Denning retorts from Paris: "It’s not today’s change that I’m noticing. It’s the mechanism. Today it’s 2.1%, but the best way to control inflation (avoid printing money) is to let the currency strengthen. What are the risks of doing so? Slower export growth is the obvious one. But they might be more comfortable with that if the goal of state economic policy was no longer to build up huge dollar surpluses, but spend them on real assets before those dollars became worth less. Or, in another sense, it’s more important to the Chinese to acquire energy assets right now than it is to sell crap to Americans.

And Justice Litle inserts his two-cents from Nevada: "There are definitely varying interpretations of what’s next.

"Some see the 2% move as all but meaningless, as close to ‘no change’ as humanly possible. Others like Goldman Sachs believe that it’s the opening salvo in a gradual adjustment that could put the yuan up almost 10% within a year’s time.

"What’s interesting is that the ‘basket of currencies’ to be valued against is undisclosed. So theoretically they could move the yuan down just as well as up if they chose."

*** Gold moved up yesterday. It sits right on our target price – $425. Buy. The euro is moving back up too.

*** We stumbled upon this headline today: "Naked ‘Tickler’ Targeting Sleeping Elderly Women."

Apparently, in New Smyrna Beach, Florida, there has been a rash of break-ins involving a naked man who likes to hide at the foot of the bed and tickle elderly women’s feet.

"It’s terribly shocking," said a neighbor of the tickled. "I think about it and a couple of times I woke up and couldn’t help looking down to the foot of the bed and wondering if somebody is there ready to play with my toes.

"It’s funny but it’s not funny."

Our thoughts exactly…

*** "You mean, you think I am wasting my time?"

Our luncheon companion yesterday was a young woman who is trying to turn France into a country with a laissez-faire economy. The French invented laissez-faire economics. But they rejected it quickly in favor of dirigisme. The Anglo-Saxon economies held onto laissez-faire a bit longer. Now, they too have become dirigiste, but still pretend to a certain free-market bent.

We had just explained our notion of how ideas follow situations, not the other way around.

Where you stand depends on where you sit, we had said. A man who is in a position to boss people around does not decide he likes free market economics. Prisoners like liberty. Jailers like shackles and iron bars. Even people with very strong ideas and convictions…when you examine them, the ideas are usually claptrap they picked up from some mountebank intellectual…and the convictions and nothing but prejudices that arose in the crib. Do you know that a famous Bolshevik underwent some kind of psychotherapy and was cured? She figured out that her political activism came from trouble she had with her mother. When she realized it, she became perfectly normal…she didn’t care about the heaving, sweating, pining masses anymore.

People don’t really think, you know. Well, maybe some do. But 99% of them only feel their way forward in life. It works well enough in personal life, where the stakes are high and the punishment is near. Like driving down the road at 80 mph, you can’t afford to have too many illusions. But in the public sphere, illusions are all over the place. They’re cheap – you can believe anything you want to believe – even that you can make the world a better place by telling people half way around the planet what kind of government they should have – without penalty. It costs you nothing, other than a few friends, maybe, to have the most extravagant fantasies and opinions. That’s why there are communists. And Democrats.

When you come right down to it, most ideas are merely forms of distractions. The world goes about its business regardless of what you think. People just pick up ideas as they need them. They think what they need to think to play their roles. They believe what they need to believe to do what they want they want to do. A man born a prince believes in monarchy. One who has a lot of property believes in property rights. The ideas and opinions just reinforce the positions.

Some people like sports. Some like ideas. They are just past-times, like crossword puzzles…and opportunities for people with sharp minds and quick wits to show off. They may not be able to run the 100-yard dash faster than others…or to eat five hot dogs in five minutes…but they can tell you about Kant and Kierkegaard…and why Lenin was wrong and Trotsky was right… It is all babble. It is all vanity. It is all bosh.

The same thing is true, by the way in the investment markets. We have sat in on a great number of meetings with investment geniuses, analysts, fund managers and economists. Ideas. Information. Theories. Charts. Formulas. The whole game is to impress each other with how smart they are…whether any of it increases investment returns is doubtful. It probably doesn’t matter what they believe…or what anyone believes…it is all vain and preposterous at some level.

We might have exaggerated.

The Daily Reckoning