From Globalisation to Trumpism
7 JULY 2016
BALTIMORE - We spent the long holiday weekend with hammer and nails.
We were replacing a fence and called upon an Amish family from Charles County for help.
Straw Hats and Suspenders
The Amish don't drive and don't recognise national holidays, so they were delivered to the farm on the 4th by a neighbour.
The father brought with him three of his boys - the eldest with a beard of his own, smoking a cigarillo.
Bill's Amish helpers
We are accustomed to thinking of the Amish as people time forgot...living in a state of purity, unpolluted by modern society. But as they say on Facebook, their actual status is: 'It's Complicated.'
The Amish don't drive. They don't drink. They don't have zippers on their pants (they don't wear jeans). They wear straw hats and suspenders.
But they are not so different from the rest of us.
'What the f*** are you doing?' said one of the boys to his brother.
'Shut your f****** mouth,' shot back the younger boy.
They set to work without hesitation and worked steadily, drilling holes with a patched-up augur...planting the posts...and driving nails with an air gun.
They weren't cheap. But they finished in one day what would have taken us a week on our own.
Meanwhile, back in the markets, US stocks fell a little yesterday.
After the excitement of Brexit, investors don't seem to know what to do.
Some believe the vote in Britain signals a 'breaking up' pattern...a move toward Trumpism and away from globalisation and financialisation.
If so, it may mean 'walls' - turning inward and away from the go-go era of ever rising credit and central bank backstops for the capital markets.
Others believe Brexit will have the opposite effect. The 'Hillary Effect', they say, causes policy makers to close ranks...and do 'whatever it takes' to protect themselves.
What it takes, they believe, is more phony money.
In Friday's paper, Mark Carney, head of the Bank of England, said he was ready to act if Britain should suffer 'economic post-traumatic stress'.
We will translate that for the benefit of readers who don't speak Centralbankese. Carney said: If stock prices drop, we'll rush in with enough cash to turn it around.
And yesterday, the Financial Times cautioned policy makers to forget the long view. The important thing is to prevent a recession now!
'This is not the time for [the Treasury secretary] to set long-term tax policy,' says an editorial.
No...this is a time to watch the news. (Or the 'incoming data', as Fed chief Janet Yellen calls it.)
Tipping the Playing Field
Donald Trump was in Maryland over the weekend.
Actually, he was in Berlin, Maryland, far out on the Eastern Shore. Berlin is in Worcester County, which has the highest unemployment in the state...and the highest level of support for Mr Trump.
In Maryland, the unemployment rate is below 5%. In Worcester County, it is 7%.
We are connecting the dots. One of our dots is that centre of light, liquidity, and hysteria - Washington, DC.
Berlin, Maryland, another dot, is about as far away as you can go from Washington and still be in Maryland.
Washington has an average home price of about $500,000 and the highest median household income in the nation (about $90,000).
How did Washington get so rich?
The simple explanation: Instead of levelling the playing field, the insiders tipped it in their direction. Now, money drains away from all over the country into the deep pockets of the nation's capital.
Wait a minute... How does that work?
Every state in the union has two senators and at least one Congressman. How does DC, with no senators and only one delegate in the House without voting rights, get the best deal?
Ah-ha! Another dot: the Deep State.
Foxes in the Chicken House
The government is not controlled by the Congress. Nor is the nation's money.
Instead, both are controlled by a group of unelected insiders (aka, the Deep State).
They pull the strings. They write the legislation (which members of Congress admit they are too busy to read). They make sure that whatever meat is served to the rest of the nation, the choicest cuts are left in the District of Columbia and the surrounding counties of Maryland and Virginia.
We've mentioned this often. But we'll do so again, for the benefit of new readers and Alzheimer's victims.
The great Italian economist Vilfredo Pareto explained how government works. No matter what you call the system - a monarchy, a theocracy, or a democracy - real power always ends up in the hands of a small group.
'The foxes', Pareto called them. They make the system work...and they make it work primarily for themselves.
The foxes produce nothing of value. Instead, they are lobbyists, bureaucrats, contractors, regulators, lawyers, insiders, administrators, educators, policy wonks, cronies, and hangers on of all sorts.
They are the Deep State.
They are the foxes living in the DC chicken house.
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The 'JFK Effect'
'The Donald' went to Berlin, Maryland, and Monessen, Pennsylvania...and not to a wealthy DC suburb such as Chevy Chase...because he has positioned himself as the anti-establishment candidate.
But if elected, we don't know whether he would take on the Deep State. John F Kennedy was the last US president to challenge it. And you know how that worked out...
Ms Clinton, meanwhile, is the Deep State's champion. She seems to approve of every agency, every policy, every crony, and every war the Deep State has undertaken.
Ms Clinton is the insider. Mr Trump, the outsider. Each position has its advantages.
As the Establishment Candidate, Ms Clinton raises $7 for every $1 raised by Donald Trump. On the other hand, 9 out of 10 voters would probably be receptive to an anti-establishment message, if Mr Trump could deliver it properly.
To be determined...
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