High on the Hog

19.05.2016 • Gold and Natural Resources

From Bill Bonner’s Diary (USA) –

DUNMORE EAST, Ireland – We came down the coast from Dublin to check on our new office building.

For this visit, we wanted to stay somewhere different than we normally do. So we chose a small hotel on the coast, called the Strand Inn.

It is an excellent place for seafood and soda bread on a rainy day. Later, you can go to the bar, get in your cups, and sing sad songs about dead Irish heroes.

Ireland has a literate, educated population. It is pleasant… pretty… and has a low corporate tax rate. So, we are expanding here.

Apparently, companies escape taxes by moving their headquarters or their technology overseas. We would do the same, but we’ve never been able to figure out how it saves any tax money.

Owners end up paying tax in their home countries. And Americans pay U.S. taxes no matter where the money is actually generated.

Regardless, we bought a large, 19th-century mansion in the aftermath of Ireland’s real estate bust… which took average property prices down by more than one-third.

It seemed like a good deal. But every real estate investment we ever made has turned out to cost more… and take more time… than we imagined. This time is no exception.

Still, it is a handsome, capacious place, which will house more than 150 employees.

The Irish have charming and understandable accents. Many of these employees will be answering calls from all over the world. So, if you call us after September, your call might be routed to County Waterford.

High on the Hog

Now, back to the Deep State…

Much of its growth is recorded in the pages of the Code of Federal Regulations (CFR). This tracks all the laws laid down by successive governments.

A privilege… a special tax break… a rule… a prohibition… a piece of meat here, a piece of meat there… and soon the foxes are eating high on the hog.

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But what’s meat for the foxes is poison for the economy.

Each piece requires paperwork, delays, permits, accountants, lawyers. You can’t do this… you can’t do that – with so many hurdles in their way, entrepreneurs think twice, capital investment declines, and the economy slows.

Each favor to the foxes is an act of larceny… taking something away from the people who earned it to redistribute wealth, power, and status to the insiders.

From fewer than 25,000 pages when President Eisenhower left the White House, the CFR now has nearly 200,000 pages – each one a honeypot for Deep State cronies.

And who reads this stuff?

Do you know what rules and regulations you are breaking right now?

Most people are too busy earning their money and raising their families to spend much time tracking the federal bureaucracy and its cronies. But the foxes make it their business to pay attention… and make the rules that work for them.

An honest person is at a great disadvantage.

Rules and Regulations

Think you’re going to change this system by voting for Hillary or Trump, Democrat or Republican?

Maybe, but there’s no evidence of it in the CFR.

The number of pages kept rising, year after year, no matter who was in the White House.

Twenty-five thousand pages were added during the Kennedy and Johnson years… another 25,000 under Nixon and Ford… and another 25,000 during the Reagan and George H.W. Bush administrations.

Federal spending per capita shows the same basic trend, an almost unbroken uptrend – through Democratic and Republican administrations – stretching back from 2016 to 1952.

Under President Eisenhower, domestic discretionary spending per person was under $500. Today it’s over $4,500. Like the Federal Code, real spending per person has increased about nine times in the last 64 years.

There were two presidents under whom spending went down – Ronald Reagan and Bill Clinton. Go figure.

In neither case, however, did it stay down for long. Once Reagan and Clinton were out of the way, the foxes went to work and quickly brought spending back to the trend line.

What will happen to the little foxes under Donald Trump? Or Hillary?

The earnings of the top 5% – the “foxy five” – began to diverge from the earnings of everybody else in the mid-1970s.

Since then, they increased alongside the FCR and government spending. Rules and regulations multiplied. Spending increased. The foxes got richer; everyone else got poorer.

All this happened through both Republican and Democratic administrations. Most likely the foxes will continue to earn more through a Trump or Clinton administration too.

Still to come… insurrection and rebellion down on the ranch…

Regards,

Bill

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Mailbag

Some sharp-eyed and pun-prone readers have drawn attention to an editing oversight in Tuesday’s Diary… about the long-buried secret of Napoleon Bonaparte.

I generally love Bill’s daily doses of clear, intelligent and beautifully expressed thinking, and I hate to be too much of a pedant, but: “He managed to recreate the Holy Roman Empire, bringing Europe together under one yolk almost 200 years before the European Union.”

Oh dear! I think that Bill has egg on his face today!

– John A.

Under one “yolk”?

Well, the French do like their eggs, and high-fat diets – and they have fancy ways to cook them. Keep up the good work. Those darn spell checkers any way… They just can’t think!

– John M.

I love your ranch and history stories and dire predictions regarding the coming catastrophes. But the word is “yoke” not “yolk” in your Napoleon story.

– Joseph P.

Honored Sir: Surely you jest! Napoleon had the Holy Roman Empire under the same YOLK?

It’s a joke, right? I think you mean “yoke,” a term that comes into English from the Latin expression often used by Caesar in his famous Gallic wars commentaries, “sub iugum iacere” (“to throw under yoke”).

Regardless of your homonymous joke, you are correct about government. No government “works,” as humans will always seek to game (corrupt) whatever system is in place. It’s the inherent, tragic flaw of imperfect humanity.

Pardon me while I go look in on my cabbages. Please carry on. Many thanks and best always.

– Paul M.
Meanwhile, readers continue to weigh in on the topic du jour, the upcoming U.S. presidential elections…

Humans, being what we are, look out for number one. From your remarks, that’s exactly what you’re doing.

History keeps repeating itself. All great empires fall. Some lasted longer than others. Some were fairly good, and others were really terrible. They all eventually fell into the abyss of greed, domination of personal freedom and suppression of every kind.

Nothing lasts forever. Our fall already started. Sorry to say America is on the edge and only needs a shove to fall in.

Who will do the shoving? Clinton, Trump, or the next one up? Are we close to anarchy or already there? It doesn’t look good in my eyes, but they’re old and getting foggy.

Maybe there is hope somehow. If so, I can’t see it.

– Mary K.

 

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