"A Triumph for Democracy"
by Bill Bonner
SAN MARTIN, ARGENTINA – "Last week, we looked at the likely election result. We’ll get back to that in a minute. But first, two stark and disturbing actualities: First, the coronavirus is not going away. Second, neither is the recession.
Delaying the Inevitable: As for the coronavirus, it can be delayed. But it can’t be defeated. Here’s Donald Trump’s chief of staff, Mark Meadows, over the weekend: "The U.S. is “not going to control” the pandemic…"
And in Europe, ABC News reports: "Dr. Eric Caumes, head of the infectious and tropical diseases department at Paris’ Pitie-Salpetriere Hospital, said the country needs to lock down again. “We have lost control of the epidemic, though it doesn’t date from yesterday,” he said on broadcaster Franceinfo."
Here in Argentina, we live with some of the toughest restrictions in the world. And the result? About the same as the U.S. – more than 600 deaths per 1,000,000 people. We don’t usually give advice to public authorities. But were we in charge, we would level with people: The government will not protect them from the coronavirus. If they are old or fat, they should take their own precautions. Others should go about their business, and not allow the virus to ruin their lives. In other words, most people should defeat the coronavirus the same way they defeated the Hong Kong Flu – by getting it… and getting over it. Then, the old folks could go about their lives, too.
Depression Ahead: Meanwhile, the lockdown recession is probably becoming a depression. Here’s CNBC: "Long-term Unemployment is On the Rise." "In September, long-term unemployment, or those that have been out of work for 27 weeks or more, jumped to 2.4 million, the highest thus far in the coronavirus pandemic-induced recession, according to the Bureau of Labor Statistics. Nearly 800,000 out of work Americans moved into the long-term unemployed category from August to September, the largest month-over-month increase ever, according to Michele Evermore, senior policy analyst at the National Employment Law Project." (Note these "official" figures are totally inaccurate, intentionally. - CP) And now that we have the lights turned on, let’s look at the election.
Alternative Outcome: Sleepy Joe Biden is likely to win. (I disagree - CP). Alas, with COVID-19 still on the loose… and the economy sliding towards depression… the old guy will wake up and begin a frenzy of boneheaded activism. He’ll push for more government spending, financed with more “printing press money”… which would speed America’s descent into a social, political, and economic disaster.
The good news is that there could be an alternative outcome. Nothing succeeds like failure. If Biden wins, the long faces in the GOP will shuffle about, depressed… forlorn… taking off their MAGA caps… taking down the Trump and Pence signs… and rueing the day they ever let their party be hijacked by a reality TV star, who spent most of his adult life as a Democrat.
Maybe then, they might pull a book off the shelf and dust it off… Maybe Friedrich Hayek’s "The Road to Serfdom". Or perhaps Ron Paul’s "The Revolution". (We modestly recommend our own "Win-Win or Lose", which offers a simple and novel explanation for “conservativism.”) Heck, they could even read the U.S. Constitution… although, it is shockingly radical. And who knows, they might rediscover the virtues of their political creed. Then, they might get to work…
They might even be able to stymie the Democrats’ big-spending plans... and delay America’s rendezvous with disaster.
Determined Opposition: Readers will recall that America’s best administrations have had weak presidents and strong opposition. When George Bush, senior left office, and Bill Clinton took over in 1992, the “national” debt measured 66% of GDP. Eight years later, it had been reduced to only 57%. By our reckoning, this was the peak of U.S. power, influence, and wealth.
From this perspective, we can look back on the Clinton years with nostalgia. But was this because the Democrat Clinton was more prudent, more sensible… more conservative? Of course not. It was because he faced a fiery, determined opposition – the conservatives in the GOP – which, either as a matter of principle or convenience, fought tooth and nail to stop him from spending money.
Big Spenders: Then, when their own party got into power, the Republicans forgot all about conservatism and became big-spenders… ready to improve the world and bankrupt the nation. In 2001, came Bush fils and Dick “deficits don’t matter” Cheney to the White House. They added more than 20 percentage points to the debt-to-GDP ratio… leaving it at nearly 80%.
Bush was succeeded by the Democrat, Obama, who did even more damage. From 80%, the national debt-to-GDP ratio rose to 107% by 2016. The conservatives who were left fought him. But too many had partaken of the forbidden fruit. In the crisis of 2008-2009, their knees buckled and they almost all crawled along with the “stimulus” claptrap.
In 2016, power went back to the Republicans. By this time, the conservatives had become extinct. And Trump added another $8 trillion in four years, bringing the ratio (as of the second quarter of 2020) to 146%. Over the last two decades, U.S. GDP doubled – from $10 trillion to $20 trillion. But federal debt rose from $6 trillion to nearly $29 trillion – more than three times as much – thanks to the combined efforts of Republicans and Democrats.
New Season:
And now, we come to another change in power. The voters may elect a new cast of characters. But the show will go on… the long-running spectacle… the 21st season of the great epic: The Decline and Fall of the American Empire…starring GWB, Obama, Trump… Cheney, Mnuchin, Greenspan, Yellen, Powell… and now, Biden, Harris… and who knows who else? And this will be a major triumph for democracy. It will succeed in replacing a big-mouthed oaf with a worn-out hack… while remaining on course for absolute catastrophe."
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