Tyranny
Of The Here And Now
Having Noticed That
Democracy And Popular Markets Listen Only To The Living, Whilst Ignoring
The Dead, Who Will Speak For The Not-Yet-Alive? ~ By Bill Bonner
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newspaper tells us that 86% of the French favor the 'freedom to die.'
We were surprised.
We always looked upon it as an obligation. Sooner or later, we figured,
at a time of his own choosing, The Man, would come around and we'd be on
his list.
What a tragic
moment! We'd lose the ability to refinance our house and the right to vote
in national elections. Suddenly, no one would have to listen to our views
on the Mid-East peace process, the war against terrorism, or the origin
of irregular verbs.
Many are the
times we have railed against this injustice. That is the problem with democracy
and popular markets, we have pointed out; only the living get to express
an opinion. The poor corpses lay mute, still, and lifeless as a senator.
We tried to
give them voice, for we were curious. What would the old-timers think
of us? We wandered over the cemetery and bent our ear to the ground.
We thought we heard the old men wheeze:
Beware paper
money. Beware foreign wars. Beware expensive stocks.
Beware debt. Beware! Beware! Beware!
But who cared
what the poor stiffs had to say?
La, la, la,
la...live for today, said the breathing ones.
But if the
empty husks of the dead are treated as second class citizens, the seeds
of the not-yet-living get even worse treatment. The not-yet-born
have no lobbyists; no trade group represents them. No PR agents try
to spin the news in their direction. No slush funds drip towards
friendly politicians. Not only that, while fortunes are
spent to keep Democrats and Republicans alive…fortunes are spent with the
aim of making sure the unborn stay that way. Much of the two
greatest fortunes in the world -- that of Bill Gates and Warren Buffett
-- are already earmarked for 'population control.'
The poor unborn!
No one even stops at a lonely grave on a windy Sunday evening and says
an 'Ave' for them. And no one imagines that any crisis could be more
urgent that the present one…and no opportunity more attractive than the
one in front of us right here and now. |
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We will spend
a fortune on the war against terror -- loading up our children with debt
-- because we can't imagine that they will face problems of their own…even
more dangerous ones. And we will buy stocks today, hardly thinking
that our children and grandchildren might find even better stocks at even
better prices.
"They are unwilling
to bet that future opportunities will arise," wrote Seth Klarman, speaking
of his fellow fund managers, "although they acknowledge that existing names
could become cheaper. Implicitly investors intend to make room for
any future bargains that do arise by selling other investments to make
room at that time. This logic causes them to hold even significantly
overvalued positions, preferring them to cash."
A wise man,
looking at present stock prices, might want to hold back some cash.
He might even bury some gold in his back yard…and leave a note to his descendants.
Perhaps they will find better places to invest, he might suggest.
But the tyranny
of the here and now screams against it. If you have money, spend
it…or invest it today. If you have no money, borrow some and
spend it. Let the unborn take care of themselves.
How can we
resist, dear reader? Today, we give them voice. Today, we speak
for the foetus as well as the corpse.
And we come
right to point, laying his major grievance right on the table. There
was a time, and not so long ago, when a very-young American could look
out at the world with a dirty face and a clean slate. He had
no money in his pocket…to speak of. But neither did he have to crawl
out on the great stage of life with a heavy burden on his back. He
could stand up as soon as he was able and howl.
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Now,
after the biggest boom in American history, the little fellow's face has
been wiped clean by order of the child welfare busy-bodies and upon his
back have been piled the largest sack of debt and obligations the world
has ever seen. No one -- not a Pakistani, not a Pole, not a Peruvian
or a Paraguan -- enters this life with a sorrier looking ledger.
On the left side, his debits surpass the imagination. For there you
find a total of $26 trillion in private debt, according to Michael Hodges,
or about $90,000 for every tot who makes his way onto this tattered ball.
And below that number is an even bigger one. Former Treasury Secretary
Paul O'Neill convened a group of economists to compute the actual
debts and liabilities -- beyond expected revenues -- of the U.S. government.
The astounding figure they came up with was $44 trillion….or another $130,000
per person. This gives him a total debt figure of about $210,000,
growing by at least 5% per year.
Against these
liabilities, of course, is the facing page of credits -- including, primarily,
the value of businesses, capital equipment and real property. Alas,
the very same forces that have made America such a paradise for the living…may
make it a sort of purgatory for future generations. Existing
technology will be obsolescent in a few years. Existing capital equipment
will be rusting away. And globalization may have taken American wage
rates down closer to levels in rival nations. By the time the unborn
realize what has happened to them, the E-Z credit and Dollar Standard system
may be already history; the consumer society may find that it has consumed
itself. |
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According
to The King Report, 350,000 retirees from General Motors are supported
by 118,000 workers, half of whom are expected to retire in the next 5 years.
As time goes by, the ratio of workers to retiree becomes more and more
out-of-whack. By the time a currently not-yet-alive worker takes
his place on the assembly line, he will be supporting an impossible number
of old lay-abouts. The math is similar, though not so dramatic, for
public retirement systems, not only in America, but throughout the developed
world.
But who cares
about the unborn? If his own parents and grandparents are happy to leave
him with a drawer full of unpaid bills, why should we care? And if he cannot
pay off the Chinese or the Japanese...what's it to us?
We don't know.
But trying
to understand it, we found the words of a dead man, Eugen von Bohm-Bawerk,
writing before the outbreak of World War I, describing the condition of
the Austro-Hungarian empire a few years before it fell apart:
"Our passive
trade balance…those theories brought forth to explain the persistently
negative trade balance [of the empire] -- such as a surge in industrial
strength and its attractiveness to foreign investment -- do not stand a
more profound analysis. These arguments would imply that the 'passivity'
would be transitory..."
Bohm-Bawerk
pointed out that the persist trade deficits, negative trade balance, lack
of domestic savings, and 'wasteful consumption' had their source in a 'change
of mind' of the people themselves which reflected a "lack of morality."
"We slithered
from surpluses into a phase of easy-hearted and willing expenditures, and
we continued to slither even after the surpluses were long gone."
Almost 100
years later, America slithers further and further into a hole of debt and
easy-hearted spending. The corpses twist and turn in their dusty boxes
and whisper: Beware. The not-yet-alive curse... and weep.
Best,
Bill Bonner
The Daily
Reckoning
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