by Bill Bonner
YOUGHAL, IRELAND – "Poor Bill and Melinda. They are calling it quits. It’s all over but the long road and the sad songs. Apparently, the COVID-19 lockdowns are responsible for a lot of marriage break-ups. After spending so much time in close quarters, Bill and Melinda may have decided that they couldn’t stand each other anymore. Maybe Bill left the cap off the toothpaste or the toilet seat up. Hard to figure. Nice people. Spoke the same language. Both committed to world improvement. Shame they couldn’t get along.
Prepared for Failure: But ours is not to wonder why it went wrong… Ours is only to marvel at how easy it was to end it. Things didn’t work out. They split. And now, Bill will load a few things in his car – a lamp… a favorite picture… his tennis racket and shaving cream – and head off to a rental unit.
One of the few advantages of getting old is that we’re prepared for things like this. We’ve seen enough businesses, investments, marriages, careers, lives, and hopes that didn’t pan out that we’re ready for failure. We even expect it. A new crypto? Another NFT? After all the hundreds of federal programs to make the world a better place… another one to make it even better? Sometimes, even at a wedding, for example, we can barely help ourselves. “That’ll never work,” we blurt out. This cranky attitude does not make us the life of the party. But it leaves us in a position to say, “I told you so,” when, in fact, things don’t work out.
FUBAR: We only bring this up to introduce our destination for today’s perambulation. We stumbled upon the subject, by accident, on Monday. We were looking at how mistakes are corrected. We noticed that private life clears away its mistakes regularly – swiftly, brutally, unequivocally. In the public sector, on the other hand… errors are much harder to correct. Today, we go back for a more careful study.
Context: The feds are making trillions of dollars’ worth of “investments.” Some are bound to go bad. How will they ever be corrected? You will not be surprised at our conclusion: Disastrously.
Divorce, default, destitution… crime and punishment… humiliation… bankruptcy… and the ledge. The private world has its remedies. You spend too much money – you quickly run out of money to spend. You want to borrow more… but who, apart from the feds, will lend to a spendthrift?
In the Paycheck Protection Plan (PPP), the Small Business Administration allegedly gave out billions in “loans” without so much as looking at a photo ID. Friends tell us they were shocked at how easily they got money. Watchdogs tell us that much of the loot went to organized and disorganized crime (not our friends, I’m sure). The idea of the PPP was to “protect jobs” in the midst of a plague. But such a desperate shambles was the lending process, that each job “saved” was estimated to have cost $377,000.
In other words, the program was a disaster. A mistake. An error. FUBAR, as we used to say in the Navy.
Win-Lose Model: Of course, this is just one program. There are dozens… hundreds… thousands of agencies and programs… all making “investments” in a better world.In the real world of Main Street, as we’re becoming monotonous for saying, real goods and services are exchanged. One gives. Another takes. And the world becomes a richer place as each person tries to please the other with better goods and services, delivered with ever bigger smiles. Bad exchanges are quickly stopped. You don’t like the bread your baker is making for you; you go to a different baker.
Hygiene is the hidden secret of capitalism. Bad restaurants are emptied. Bad ideas are purged. Mistakes are corrected. But governments operate on a pre-civilized, win-lose model. There is take, but no give. The feds never have to satisfy a customer or show a profit. And their “investments” are almost all losers.
Funny Money: From Baltimore, for example, comes news that the city will receive $670 million from the American Rescue Plan. This, we’re told, is an investment in getting the city back on track after pulling out of the COVID swamp. WBFF has more details: "The bill sets some guidelines but the Mayor’s Office has a lot more leeway this time around to decide who will receive this money."
Oh stop! Talk about FUBAR! We’re laughing so hard, we can barely sit upright. Imagine Baltimore’s corrupt and incompetent city government deciding how to “invest” $670 million of “free” money from Washington. (Will someone please call Mercedes-Benz and tell them to increase inventories!) The spending is supposed to have something to do with COVID-19 relief. But what doesn’t these days?
Which of the mayor’s friends has not been affected by the disease? Which of his relatives doesn’t have an idea about how to make the city a better place… with the appropriate spending, of course? Which pocket in the Baltimore political/elite class is so shallow that it can’t accept another $1 million or so?
Zero Return: You know, gentle reader, as does everyone in Baltimore, that this “investment” is likely to produce zero positive return… and, by diverting people from honest business (if there’s any left)… much harm. But who will ever know? Whether it is the billions sent to cities like Baltimore… the stimmy checks given to businesses and individuals… the subsidies… the giveaways… no return on investment will ever be calculated.
The money will disappear in dribs and drabs… showing up in new houses… new cars… and beach pads in Ocean City. Nobody will ever admit failure. No reckoning will ever happen. No one – in shame and regret – will ever open a window of the Bank of America building and take a leap. Nope. No scrubbing. No soap. No hygiene will happen. No divorces. No bankruptcies. And no corrections.
Never-Ending Wars: The war on poverty has been going on since the 1960s. No victory yet! The war on drugs began in the 1970s. And now, we are declaring a $9 trillion war on viruses… on temperature changes… on recessions and stock market corrections… And the scum, muck, and toxic sludge gets deeper and deeper. Then what? Stay tuned…"
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