More zombies! - The Daily Reckoning
The Daily Reckoning by Bill Bonner
On This Day - 13 May 2013
PRINTER FRIENDLY | ARCHIVES
More zombies! A  A  A

Baltimore, Maryland

First, let us remind you of what zombies are. We're not talking about the cartoon characters you see in the movies. We're talking about real people who live at the expense of others...people who take, but don't give....people who twist 'the system' to get things that rightfully belong to others.

Here is our zombie hypothesis, in case you've forgotten. As a society ages, more and more people find ways to take advantage of it. Everybody wants power, wealth or status. And they, naturally, try to get it in the easiest way possible. The shortest, softest and surest route is to game the system: use it to get subsidies, grants, jobs, tax breaks, bailouts, welfare, special parking places and other benefits.

But gradually, the cost of supporting all these chiselers and layabouts increases...until the whole system goes broke. Society can no longer afford to continue. As in France before the revolution of 1780, the whole shebang collapses.

A colleague has done a study of the large companies that spent the most on lobbying. He calls it the "K Street Index" after the street which lobbying firms tend to call home. In the period measured, they spent $1.2 trillion on lobbying (including campaign contributions).

-------------------------------- Instant Access To Our Latest Small Cap Special Report --------------------------------

Small Caps hold the potential to deliver big returns.

Yet, given the high risk they carry, it is generally seen that a 5 to 10% portfolio allocation to small caps is ideal...

But the bigger challenge is selecting which Small Caps you should consider investing in...

Our Unique Trial Offer helps you do just that!

This trial offer gives you exclusive access to -

  1. Our next Small Cap stock pick (releasing 15th May)
  2. All our recent Small Cap recommendations
  3. A Special report with full details on 3 Small caps you could buy right away
  4. Our Hugely Popular Asset Allocation guide...
And a LOT more!

If you are interested in trying our Small Cap service, we recommend you act soon!

This is a limited period opportunity and can be withdrawn anytime...

Click here for full details...

-----------------------------------------------------------------------------------------------------------------------------

Readers will note that lobbying is not productive behavior, at least not in the ordinary sense. It does not lead to higher output. It does not fund innovation or new invention. It does not pay workers nor stimulate additional sales.

Lobbying expenses should lead to lower stock prices. Like spending money on call girls or page boys, it means the companies are using their scarce resources on things that will not raise production or increase sales or boost profits.

But so what? This is a zombie economy ... It's not greater output or better management that counts; it's who you know in Washington. Lobbying pays off. It's how to grab a hold of the system and twist it in your favor.

The K Street Index outperformed the rest of the stock market more than two to one. The rest of the market rose 60%. These top-a** kissers rose 170%.

How do you like that? Politics pays. You make campaign contributions. You hire a K-Street lobbyist to curry favor for you. Your business may not really get better. But your stock goes up!

What's the harm? It's always been like that, hasn't it?

Well, no. There have always been corrupt politicians and conniving corporations. Zombies will always be with us. But never before have the zombies been so numerous and profitable. Zombyism pays like never before.

Why? Because there are more opportunities for parasites than ever before. More laws. More loopholes. More little giveaways and privileges...thousands of them snuck into ever piece of legislation and every petty rule.

The tax code alone has more opportunities for favoritism that the whole of the US government a few years ago.

The new ObamaCare regulations are so complex you could hide hundreds of blood-suckers in them.

And then, there are the "environmental" protection rules too - full of subsidies, low-cost financing, tax breaks and other giveaways.

Is it really any wonder that lobbying pays off?

A report in the Wall Street Journal last week told us about housing assistance programs. We can't recall the details, but the gist of it was that people wait years to get on the list to get free housing. Then, they're fixed for life. There's no time limit. They can live at the expense of other people for the rest of their lives.

Sometimes the unintentional parts of a story tell more than the intentional parts. The story included a photo of a woman who had just gotten into the program. It was like "winning the lottery," said another free-housing beneficiary.

And like winning the lottery, it comes with certain advantages. In the photo of this poor woman who has just been given free housing are two automobiles. One is a Cadillac. The other a Mercedes.

Go figure. There are zombies everywhere.

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

Disclaimer:
The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

Get The Daily Reckoning directly
in your mail box.
Just enter your e-mail address » 

Read our Privacy Policy and Terms Of Use.

Equitymaster requests your view! Post a comment on "More zombies!". Click here!

2 Responses to "More zombies!"

Suresh A S

May 20, 2013

You can find more ZOMBIES in food security bill and right to education bill. Of course some more in the scheme named after Nehru and Gandiji.

Like 

meenakshi pai

May 19, 2013

Very nice term ZOMBIES everywhere loved the style of wording.Nice.

Like 
  
Equitymaster requests your view! Post a comment on "More zombies!". Click here!

Recent Articles:
A Darkness Is Spreading Across the US
August 22, 2017
Today, we are attacked by one preposterous thing after another, each of them even more absurd than the last.
Dear PM Modi, India is Already Land of Self-Employed, and It Ain't Working
August 21, 2017
Most Indians who cannot find jobs, look at becoming self-employed.
Trump Takes a Beating
August 18, 2017
Donald J Trump, a wrasslin' fan, took a 'Holy Sh*t!' blow on Tuesday.
Which Gods Will Bring Down the US Empire?
August 17, 2017
Mr Trump is in the White House and the gods are in their heavens; what's not to like?