"At the Mercy of the Foxes"
by Bill Bonner
YOUGHAL, IRELAND – Our subject today has a little of everything – ambition… betrayal… idealism… cynicism… democracy… revolution… corruption… you name it! But today’s setting is not the USA. Still, we will turn to the U.S. media for a big surprise, before taking up our parable.
Here’s a rare event… where the reporter got the story almost right. The Hill: "Biden Approaches Economic Point of No Return." "…Inflation grew by 5 percent last month, the sharpest increase in 13 years. American families have noticed, with prices of gas, building materials, cars and food shooting upward significantly. Inflation is a scourge with a simple solution, but one the Biden administration feels it cannot afford: cutting spending and money-printing at the Federal Reserve. The latest inflation numbers are a blaring red warning sign that is both valuable and honest - it is the last point in which President Biden can put the brakes on before the specter of 10 percent (or higher) inflation."
The elite control the government. And most of the money the feds print goes to them. Giving it up would mean huge losses. Stock and bond prices would be cut in half, as money-printing and rate-rigging came to an end… Earnings would be reduced, too, as boondoggle programs were trimmed back.
And now, so much of the economy has come to count on ultra-low interest rates and stimmy money, the feds can’t “taper” off. Instead, they have to provide more and more fake money… until the whole system blows up. Inflate and Die, in other words.
Cunning Foxes: A return to “normal” won’t happen voluntarily. But once you have corrupted your economy and your political system, it almost never does. And so, we come to our marvelous story. What a delight! It caresses our cynicism so tenderly… and demonstrates our theory of government.
In a small, early democracy – like a New England town – a government may be run “for the people” and “by the people.” But in a larger setting, it doesn’t take long before a small group gets control. They are the people the great Italian economist, Vilfredo Pareto, called “the foxes.” They manipulate elections… They “sponsor” candidates… They run for office or lobby the legislators… promise pay-offs, contracts, and giveaways… and control the media and the bureaucracy themselves. They become a more or less permanent “deep state”… using the government itself to keep themselves in power. Usually, the process is hidden behind empty slogans and claptrap politics. But sometimes, it becomes as plain as day.
Pacific Paradise: And so it has… in the bright sun of the Central American isthmus between Costa Rica and Honduras… between the Pacific and the Gulf of Mexico… somewhere between paradise and Hell. There, on the Pacific coast of Nicaragua, where the sea breezes keep the temperature from getting too hot… we’ve had a vacation house for many years. The location is stunningly beautiful. The people are charming, gentle, and nice. And it is far enough from the capital, Managua, to avoid getting involved in politics. Surfers surf… fishermen fish… retirees lounge by the pool… and neighbors gather in the evening to watch the fat, tropical ball sink into the vast Pacific…
But in Managua, the president – Daniel Ortega – huddles with his henchmen in his guarded compound… and goes over the list of those he will arrest next. The Wall Street Journal reports: "Daniel Ortega, who is seeking a fourth consecutive term as Nicaragua’s president, has launched a broad campaign of repression, according to analysts, human-rights activists and Western governments."
Iron Circle: Danny Ortega’s clique of insiders – the “iron circle” – is in a trap, too. It has to use naked force in order to stay in power. And the more violence it uses… the more people are appalled… and the more violence it must use to keep them in line. Mr. Ortega was once a world improver, too… fighting, he said, for a freer, fairer society. Had he been in power in the 1960s, he might have taxed banks to support his activist agenda. Instead, he robbed them and was put in the hoosegow in 1967. He stayed in jail for seven years, until 1974, when a group of revolutionaries – called “Sandinistas” – crashed a Christmas cocktail party in fashionable Managua and took hostages. It was in order to liberate the hostages that the dictator of Nicaragua at the time – Anastasio Somoza – agreed to let Daniel Ortega go free. Then, the Sandinistas went on to chase Somoza out of the country.
World Improver Turned Dictator: And after losing power… and then regaining it as a more modest “Christian, Democratic, Socialist” candidate, Mr. Ortega, now 75, holds power… and has become a dictator himself. His family owns the TV stations. Opposition is outlawed. And just to be safe, he recently began arresting everyone who looked as though they might pose a threat – including Hugo Torres.
As Ortega stifled dissent, almost all his old comrades turned against him. Torres was one of the commandos who liberated Ortega from jail and later led the Sandinista army against the American-financed “contras.” But last Sunday, Ortega’s cops closed in. Remarkably, Torres was able to send out a video before they put the cuffs on: "Today’s paradox of life is that someone who abandoned his principles, Daniel Ortega, the man I helped free 46 years ago, is now my captor."
If Mr. Torres had been able to see what was coming, he might have thought twice about joining the Sandinistas in the first place… “Does it really matter who rules Nicaragua?” he might have asked himself. Or, at least, he might have left Daniel Ortega behind bars. Government is never “all of us,” he might have realized. Some rule and some are ruled. The key is not who rules, but how much ruling he can get away with.
Vicious Circle: Mr. Ortega has been ruling – in the name of the people, of course – for the last 14 years. He has no intention of giving up now. Which is okay with us. We don’t much care who rules… or what they call themselves. Democrat. Republican. Sandinista. Communist. It doesn’t matter; we just don’t like anyone telling us what to do.
After working so long and so hard – and robbing banks is dangerous work! – Ortega must figure he deserves whatever power he has gotten. And there’s no reason some jumped-up Democrat should be allowed to take it from him. But the more Ortega rules, the more he must rule, in order to remain the ruler. The poor man is trapped. If he permits a free and fair election, he will most likely be defeated. Then, he will be at the mercy of the foxes, too."