Markets Closed --Martin Luther King Day

One of the great joys of living overseas is that you are relatively free from that biggest of all American bugaboos — “the eternal race question.”

More than anywhere on earth, the issue of race and what it means… has occupied the wits of American thinkers. Judging from the results, you might wonder about the quality of wits involved. For little has emerged that sheds much real light on the subject.

On the one hand, the race baiters, both Black and White, incite the temper of the electoral mob… and on the other, the wishful thinkers pretend that the whole issue would evaporate like blood on hot pavement if only people would stop being so mean spirited about it. They could then raise a committee of do-gooders to wash off the stain and forget the whole thing. America could be like a Benneton ad.

The subject of race is virtually taboo in polite company — except for the ritual condemnation of racism, Jesse Helms and the South Carolina state legislature.

Most recently racial sensitivity has reached such a refined state that the “n” word has replaced the “f” word as the ultimate grammatical no-no. Not only can you not say the “n” word — you take your career in your hands, if not your life, by using a word that sounds like it might be etymologically related to the “n” word. I recall for you, again, the Washington D.C. city official who announced that he would “not be niggardly” with taxpayers’ money. It was not the sensitivities of taxpayers, who would applaud a little niggardliness among public officials, but those of the race industry that were offended.

I do not know what the denouement of that drama was. I thought the guy had been fired. Actually, I was told he resigned. The difference is, dare I say it, niggling.

Whether he resigned or was fired, he got off easy. It can be a federal crime to use the “n” word. In the land of the free, and the home of the First Amendment, you gotta watch what you say or they’ll put you in jail.

So, when in doubt, use the “f” word.

In France, the wishful thinkers and euphemeisters are hard at work too — sanitizing the language. They got out the scrub brushes and the lysol and went to work on my son, Jules’, civics books. There, it is written that there are no races… except those like the Tour de France. The book tells Jules that “there may be as much difference between two Europeans as between a European and an African,” therefore, the concept of race is illegitimate.

Good luck. Why not tell the boy that larceny doesn’t exist — that there are just people who borrow things with no clear plans to return them? Or how about erasing the concept of alcoholism? Some people just drink more than others. This is, I believe, a feature of the feminizing impulse — to think that, with enough bleach and soap, all gritty problems can be laundered out of the public mind.

But Jules can see for himself that it isn’t true. Though humans are infinitely variable, you can walk down the Champs Elysees and see that they fall into broad categories. Why not call them races?

At least in rural France they still have a sense of humor about race. At the Fete de St. Jean — on midsummer’s eve — the little town of Lathus decided to prepare a group of floats with an international, or rather intercontinental theme. Each one, set up on a farm wagon and pulled by a tractor, featured a different continent — intending to parody the people who live there.

The Asia float, for example, had a skinny guy pulling a rickshaw… in which was seated a large, comical woman in a Chinese straw hat. The North American float poked fun at the garish vulgarity of America — a favorite theme.

I don’t remember the others, except the one representing Africa. In their bucolic naivete, the citizens of Lathus set up a scene in which a white man in a pith helmet was sitting in a huge black pot — I’m not making this up. Other Lathusians in black face, headresses, grass skirts and jungle get-ups danced around as though in an early Tarzan movie.

At least sensitivity hasn’t reached everywhere.

Bill Bonner

On the train to London January 17, 2000

*** The Dow closed up 140 points on Friday. Don’t you love being a part of the greatest wealth explosion of all time? Just hope it doesn’t blow up.

*** The Nasdaq, which supplies so much of the nitro, rose 107 points on Friday. The Nasdaq was up 4.68% for the week. Whew!

*** What a shame the markets are closed today. Nasdaq investors have been making 1% on their money — every day! If they have a $100,000 in the market, it means a thousand bucks in 24 hours.

*** Looking at the week, the broad market appears to be trying to decide what direction to go. The number of advancing stocks was just about equal to the number of declining ones. So was the number of new highs and new lows — about even.

*** The Internets don’t look so good, though. AOL closed down at 63.

*** Lest there be any doubt about the source of today’s stock prices — the financial sector increased borrowings by 25%, or $1.4 trillion, in the 18 months ending Sept. ’99.

*** Residential borrowing rose in the first six months of ’99, 79% over the same period 2 years ago. Americans are literally betting the farm on the stock market.

*** The credit card industry has been mailing 2.3 billion solicitations each year — 2 dozen per household. And consumer credit has been growing at 7% per year. But real disposable income has only been going up at a little more than half that rate.

*** Not to worry… people count on the wealth effect — the rise in real estate and stock portfolios to make up the difference.

*** Well… too bad about that. Steve Case and Bill Gates are not the ones running up credit card debt. The half of the population going into debt is the half that doesn’t own stocks or Manhattan loft apartments.

*** When you use a credit card to buy something and take 3 years to pay it off you add 50% to 70% to the purchase cost.

*** Nasdaq now makes up 1/3rd of the total capitalization of stocks in America — or a total of about $5 trillion. The Internet Index, IIX, mostly concentrated in the Nasdaq doubled between August 10th and Dec. 13th of last year. And Internet Index rose 480% since October of ’98. Interestingly, in the 18 months ending Sept. ’99, household mortgage debt and corporate debt rose about $1 trillion, too.

*** At the close of last year, the Iowa Electronic Market, which allows players to bet on political contests, had Giuliani 2-to-1 over Hillary. Gore was favored over Bradley by about the same odds. And on the Republican side, Bush was nearly a 3-to-1 favorite to win against McCain.

*** Richard Russell points out that 20 years ago nobody had $10 billion. But Bill Gates gained that much in two days in December, when Microsoft surged on the 15th and 16th.

*** Elizabeth read a prayer in church on Sunday. She’s been studying french at the Alliance Francaise and working hard to integrate the family into local life. It was a short piece, so she milked it for all it was worth. As the family beamed with pride, Edward, age six, fidgeted in the front pew and dropped a pistol out of his pocket. Mon Dieu! He doesn’t go anywhere unarmed.

*** My daughter, Maria, born on Martin Luther King day, turned 14 on Saturday.

The Daily Reckoning