"Pareto's Foxes"
From millions of private triumphs to trillions in public folly...
By Bill Bonner
"There never was a democracy yet that did not commit suicide. It is in vain to say that democracy is less vain, less proud, less selfish, less ambitious, or less avaricious than aristocracy or monarchy. It is not true, in fact, and nowhere appears in history. Those passions are the same in all men, under all forms of simple government, and when unchecked, produce the same effects of fraud, violence, and cruelty. When clear prospects are opened before vanity, pride, avarice, or ambition, for their easy gratification, it is hard for the most considerate philosophers and the most conscientious moralists to resist the temptation. Individuals have conquered themselves. Nations and large bodies of men, never." ~ John Adams
"We are biding our time…waiting for the heat wave to pass in the South. It was 100 degrees there yesterday. We’ll wait it out in Normandy – temperature 82 degrees. In the meantime, the reckoning hour approaches. Charlie Bilello: "The Leading Economic Index has now declined for 16 consecutive months, the longest down streak since 2007-08. The Conference Board is now forecasting a US recession to begin in Q4, pushed back from its previous forecast of Q3"
What are some signs pointing to economic weakness?
a) Industrial Production, which declined on a YoY basis for the 2nd straight month.
b) Retail Sales, which after adjusting for inflation have fallen for 9 straight months.
Both Target ($TGT) and Home Depot ($HD) reported lower revenue than a year ago, a sign that the US consumer may be pulling back.
Foxes and Clucks: Market timers wait for the sell-off. Economists wait for the recession. Here at Bonner Private Research, we are on suicide watch. In the rich muck beneath the news is the story of the rise of America’s elite – the rich men north of Richmond. It’s the real story of America…a story of power and how it is abused by those whom the famous Italian economist, Wilfredo Pareto, called ‘the foxes.’ They are the clever ones. They are at the top of the heap. Whatever you call your government – they are the ones in charge.
Why bother to look at it like that? Because there are still chapters to be written…and, most likely, it won’t end well. What’s good for the foxes isn’t necessarily good for the clucks in the henhouse.
What we’ve seen, in the story of the USA, is a tale of millions of triumphs – from Powerglide steering to Post-it notes to cleaning up the Chesapeake Bay. But we’ve seen failures too – and a particular kind of flop (described by Adams, above): the foxes are corrupted by power…and their desire to dominate sucks up more and more of the nation’s wealth. Pointless foreign wars…unproductive ‘investments’…bureaucracy…taxes…inflation…and futile ‘programs’ whose only real consequence is to make the rich richer and the powerful even more obnoxious – democracy cuts its own wrists…and bleeds out its vital capital.
The major political parties squabble over bathroom rights…and can’t be bothered to balance the budget. The geniuses at the Fed bring disaster after disaster by pretending to improve a $25 trillion, global economy. America’s military/industrial complex has become a $1.5 trillion/year colossus that can’t win a war. Its pharma/medical complex shuts down the whole economy… delivering drugs that don’t work…and life expectancies fall.
The Vainglory of the Elites: For while the Democrats were on TV howling furiously at the Republicans…and the conservatives were making obscene gestures at liberals in Congress…while the rights of the unborn were debated…the rights of the gender-affirming millennials were assured…. ‘hate’ speech was condemned…women were trained for combat roles.. .TV talk show hosts are ‘called out’ for saying the wrong thing…
while pasteurization, vaccinations, and standardization were undertaken by armies of regulators…while the habits of the halibut were studied…while the fat, the lame, smokers and drug abusers were cared for…the idle were subsidized…reckless bankers were excused from bankruptcy…imprudent investors were rescued… incompetent generals were promoted, along with insufferable jackasses, such as Victoria Nuland and Anthony Blinken... US troops dispatched to nearly every woebegone sh*thole country in the world…lobbyists rewarded…bribes offered and taken…reputations built…the stock market pumped…sinecures secured…connivers connived…ill-gotten gains gotten…and trillions in tax money, loans, and printed money handed out to unworthy causes and shady characters…while all this was going on…the rich men north of Richmond grew richer and more powerful than ever.
Little by little…then by huge bounds…energy drained away, out of things that really matter – work, saving, investment, innovation, generosity, courtesy, humility – and into the precincts of the rich, so as to enhance the vainglory of the elites. Yes, America could dominate the world. But she was never mistress of herself; never could she control her elites’ drive for dominion."
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"Pareto’s Foxes”
by Bill Bonner
"Let’s start with the government, which controls – directly or indirectly – about half the U.S. economy. It was not intended to be so big, so powerful, and so intrusive. But then, it hardly resembles the blueprint described in the Constitution. Elections matter a whole lot less than you think.
As the great Italian economist Vilfredo Pareto explained, no matter what you call your government, over time, it will be taken over by the cunning insiders and hustlers he called “foxes.” There are always some smart people able to manipulate, control, and subvert the government and use its police power (governments claim a monopoly on the use of violence) to get what they want. What do these foxes want? Money. Power. Status. The usual.
There is nothing underhanded about it. Nothing sinister or surprising. And you don’t need to believe in conspiracies to understand it. The subversion takes place right out in the open. But because it is so different from what we are looking for, we don’t even see it. But it’s really very simple: You spend your time earning money. The foxes spend their time figuring out how to get it from you – by taxation, legislation, regulation, or an ingenious phony-money system."
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