Are the End of Times Upon Us?

Big hands... Rest easy, America
Big hands… Gog (left), Trump, and Magog

by James A. Bacon

Surely we have reached the end of times of apocalyptic lore when the leading Republican candidate for president flapped his arms during a national debate and assured the American people that not only are his hands of respectable size but so is another part of his anatomy. “I guarantee you, there’s no problem,” said the inimitable Donald Trump last night.

Such is the state of the nation that rather than explicate how he proposed to “make America great again” — beyond building a big wall, bringing in “really great” people, and hammering China, Japan and Mexico on trade — Trump felt compelled to assure the public that the size of his genitalia is something the nation can be proud of.

While Trump is grotesque, he taps into a very real malaise across a broad swath of the electorate. The American people know that something is very wrong, and that the elites have rigged the rules of the game to their favor, although they’re really not sure how. Americans are appalled by political correctness, they’re appalled by Wall Street bailouts, and they’re appalled by big money in politics. They are enraged by the loss of jobs, many of them to competitors overseas, and they are demoralized by the increasingly difficult struggle to maintain a middle-class standard of living.

My argument in Bacon’s Rebellion is that much of this malaise can be traced to the failure of core economic institutions. The health care sector, which comprises close to one-fifth of the economy, is plagued by the poorest record of productivity and quality of any economic sector, making the cost of health care increasingly unaffordable for all. Meanwhile, college tuitions have become even more burdensome, blocking a traditional path to a middle-class occupation. Both sectors have become captured by the leading players — hospitals, insurance companies, institutions of higher education — and are run to protect their interests, not the interests of the public. And don’t get me started on dysfunctional land use patterns, also the playground of special interests, which drive up the cost of housing and transportation.

How these complex systems work is poorly understood, so Trump personifies the enemy as illegal immigrants and Chinese factory workers stealing American jobs, while both Democratic candidates personify the enemy as cops killing innocent black men and deploring the United States as institutionally racist.

There is another contributor to this malaise, also poorly understood: monetary policy. I have addressed it periodically in Bacon’s Rebellion, although I only dimly comprehend the dynamics myself and assuredly speak with no authority on the subject. But Bill Gross, head of Janus Capital Group and one of the leading bond investors in the world, does understand it. And I will let him do my talking for me.

In the current issue of his monthly newsletter, Gross writes the following:

Our global, credit based economic system appears to be in the process of devolving from a production oriented model to one which recycles finance for the benefit of financiers. Making money on money seems to be the system’s flickering objective. Our global financed-based economy is becoming increasingly dormant, not because people don’t want to work or technology isn’t producing better things, but because finance itself is burning out like our future Sun.

What readers should know is that the global economy has been powered by credit – its expansion in the U.S. alone since the early 1970’s has been 58 fold – that is, we now have $58 trillion of official credit outstanding whereas in 1970 we only had $1 trillion. Staggering, is it not? But now, this expansion appears to be reaching an ending of sorts, at least in its current form. Private sector savers are growing leery of debt piled upon debt and government regulators have begun to build fences against further rampant creation. In addition, the return offered on savings/investment whether it be on deposit at a bank, in Treasuries/ Bunds, or at extremely low equity risk premiums, is inadequate relative to historical as well as mathematically defined durational risk. The negative interest rates dominating 40% of the Euroland bond market and now migrating to Japan like a Zika like contagion, are an enigma to almost all global investors. Why would someone lend money to a borrower with the certainty of getting less money back at a future date? …

Negative yields threaten bank profit margins as yield curves flatten worldwide and bank NIM’s (net interest rate margins) narrow. The recent collapse in worldwide bank stock prices can be explained not so much by potential defaults in the energy/commodity complex, as by investor recognition that banks are now not only being more tightly regulated, but that future ROE’s will be much akin to a utility stock. …

In addition to banks, business models with long term liabilities that depend on 7-8% future returns from risk assets are themselves at risk – not necessarily of bankruptcy but future profitability. … Same goes for pension funds. Puerto Rico follows Detroit not just because of overpromised benefits but because they cannot earn enough on their investment portfolios to cover the promises. Low/negative interest rates do that. And the damage extends to all savers; households worldwide that saved/invested money for college, retirement or for medical bills. They have been damaged, and only now are becoming aware of it. Negative interest rates do that. …

In addition, government policymakers seem to be setting up future roadblocks for savers. There is a somewhat suspicious uniform attack on high denomination bills of global currencies. Noted economists such as Larry Summers; respected journalists such as the FT’s Gillian Tett, central bankers such as Mario Draghi – all seem suddenly concerned that 500 Euro or 10,000 Yen Notes are facilitating drug dealers and terrorists (which they are). But what’s an economist/central banker doing opining on law enforcement? It appears that the one remaining escape hatch for ordinary citizens is being closed. Money in a mattress will heretofore be associated with drugs/terror.

As long as central governments around the world control the money supply through central banks, there is one thing you can count on: They will pursue policies that benefit the central governments. Central governments are the world’s biggest debtors; consequently, they are they greatest beneficiaries of low/negative interest rates. Without anyone electing them, without anyone outside the financial sector even understanding what’s happening, central bankers in the U.S. and the rest of the world are engineering the greatest redistribution of wealth since the Spaniards plundered the wealth of the New world.

Donald Trump supporters are smart enough to know the government is shafting them when it raises taxes. I’m not sure they’re smart enough to know the government is screwing them when it represses interest rates. Meanwhile, Hillary Clinton and Bernie Sanders are promising to hand out goodies to be financed by “taxing the rich,” all the while maintaining a monetary regime that picks the pockets of the middle class — knowing the the middle class doesn’t see what’s happening.

Soon, instead of making almost nothing for their bank deposits and CDs, small savers will start paying banks for the privilege of holding their money. Corporations, forced to pay more to cover their pension costs, will have less leeway to raise wages and salaries. State and local governments, many of which were on a sound financial footing a decade ago, find themselves playing continual catch-up to pay their pension obligations, either raising taxes or short-changing other needs in the process. Owners of insurance policies now have to worry that their insurance company may not be able to fulfill its promises. The pathways of causation are too subtle and indirect for most people to understand. It’s so much easier to blame Mexicans, the Chinese or institutional racism.

We are moving into uncharted territory as central governments desperately seek to keep the system going. Perhaps, as optimists would have us believe, brilliant central bankers have invested an economic perpetual motion machine that will enable nations to borrow indefinitely by monetizing their debt. Or maybe the whole thing will grind to a halt. Gross predicts that the next phase is for central banks to start helicoptering money to keep the creaky machine going a little longer. So, it may be a while yet before we reach the financial end times. But when they come, they will be a doozy.

How will we know when the end of times is imminent? Here’s my prediction: when Donald Trump goes all Anthony Weiner on us and starts tweeting pictures of his “package.” Then we truly will have hit bottom.

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74 responses to “Are the End of Times Upon Us?”

  1. I never believe that I am the smartest person in the room, but I am increasingly concerned that our electorate lacks adequate knowledge to make choices that line up with their own intentions. I sit with “educated” people and am shocked by their lack of economics literacy. If I pass along Gross’s piece I think that their eyes would glaze over, even though it’s actually easy to follow.

    I would like to persuade current Trump supporters that he is the last choice to serve their interests (lumping these voters as disenfranchised, white minority fears, lagging wages). The man couldn’t be further removed from the grinding realities of most Americans–he lives in the insulated bubble recommended in “Bonfire of the Vanities.” When do you think he last took a taxi, went to a supermarket, or did much of anything himself? Romney lamenting Trump’s character yesterday will do nothing to move current supporters away from him–they’re not bothered by his description of Romney “ready to get on his knees;” they like it.

    They might shift their support if they understood that he will not be able to build a wall, he won’t improve they’re economic status, he isn’t one of them. He is the very enemy that they decry, an elitist with access who’s bumbled his way through a handsome inheritance never really paying the piper.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      I could not agree with you more, Lift.

      Too many of our “less affluent” people have been intentionally put, and are kept, on the dole and in ignorance by our elites who increasingly now are corrupt and growing more irreverent to the needs of our future by the day. All of this is plainly apparent from the behavior of both groups.

      Democracies need productive people and healthy institutions who have the intelligence and capacity to serve their own long term interests as well as the nation’s interests, and the interests of their neighbors. These are the attributes of what the Founders called Virtue. Virtue is term that few today understand, and one they mostly laugh at and mock. We are losing our capacity for virtue at a frightful rate.

  2. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    I agree with Gross.

    Perhaps his most important observation comes at end of quote:

    “But what’s an economist/central banker doing opining on law enforcement? It appears that the one remaining escape hatch for ordinary citizens is being closed. Money in a mattress will heretofore be associated with drugs/terror.”

    I would state it this way. Our fundamental problem is how we spend our time, what we worry about and talk about endlessly: banal nonsense. Such as much of what we heard at last nights debates. Or for another example the worry we put into underground pipelines. Or for another example the amounts of public monies we pay to so many of our professors of higher education who give us nothing but nonsense in return. Gross’s observation on the value of money saved is another iteration of the same problem.

    Always in the past American Democracy has combined with America’s incredible riches (people, culture, and institutions) to work it way though these challenges. Few democracies have for long, but I remain optimistic. But its ours to lose. And maybe this time we will succeed in losing it, as Ben Franklin warned the day he announced our Republic.

  3. Andrew Roesell Avatar
    Andrew Roesell

    Dear Gentlemen,

    While I will not defend Trump’s mien, he has a better understanding of economics than the “wonks” who have savaged him within the Republican Party. The passage of NAFTA and GATT have been ruinous to the U.S. economy and the “solution” that the elites have is more of the same, only more ruinous: The “Trans-Pacific Partnership.” There are different ways of analyzing and describing complex situations. One is a “number-heavy” kind which seems to be the preference of BR, but there is also, and not in any necessary opposition, a pattern recognition kind. Trump is astute at that, it seems to me. I give him credit for seeing, and speaking, the truth on issues like trade, immigration, our endless wars, and political correctness. All of these are real issues, and I think his rapport with ordinary people is much, much better than most other U.S. politicians. Sorry to be the “rube” in this august company, but I think he is much more astute and “in touch” than any of his rivals.



  4. Les Schreiber Avatar
    Les Schreiber

    Economists have a phrase called “moral hazard”.Following the crisis of 2008/09 it became known as “socializing the loses and privatizing the gains”.There is a perception that the game is rigged and the response to the banking crisis reaffirmed it.Billions were spent to bail out banks and insurance companies .The mortgage securities that were at the center of the problems were never examined for fraud . There is a wonderful scene in the movie “The Big Short ” when a “waitress” in s strip club announces that she owns 5 condos. The mortgages on these properties were included a a security that received a high rating from the rating agencies. Fraud ,most likely,but only the taxpayer paid a price. No wonder that many believe that the game is rigged.

  5. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    As Andrew knows I respectfully disagree with him on the issue of The Donald so will abstain from commenting on that particular.

    As to Les’s point that the “moral hazard became known as “socializing the loses and privatizing the gains” with the bank bailouts, I tend to agree up to a point.

    However, I believe that all our elites are severely afflicted with this disease, generally. Its pervasive, our biggest problem.

    Hillary Clinton, has she not devoted her life to “socializing the loses and privatizing the gains”?

    And done so along with most tenured professors today, along with an ever larger share of our corporate and political leaders, all of whom more and more act in league, crossing party lines and/or refusing to do so, for mutual private advantage to themselves at the detriment of their constituents.

  6. It was Rubio who first attacked Trump and paraphrasing, said Trump had small hands, and Rubio added, you know what that means. So this is one case where I felt Trump’s rebuttal was measured and appropriate. I am not a debate expert, but Trump has the need to fight back, or the Rubio comment sticks as the defacto truth. Loosen up folks, I got a good belly laugh on that one.

    So this issue might make good politics as anti-Trump rhetoric, but I personally do not see it as fair to Trump. Note that I do not expect to vote for Trump, unless I also plan to get a divorce.

    1. Andrew Roesell Avatar
      Andrew Roesell

      Vote Trump and divorce? Hmm. Does “TBill” stand for “The Bill Clinton”? I think I understand your predicament, now, Sir! ;-)<



  7. Jim, you say, “much of this malaise can be traced to the failure of core economic institutions,” and I agree. But it’s disturbing that you couple this observation with anecdotal evidence (the Trump phenomenon) that ordinary folks are getting desperate for a revolution within, the current system, and if thwarted, may even begin to go outside the system. No wonder our neighborhood 2d Amendment nutsos are so concerned about maintaining their personal armories well stocked! You say it well, “While Trump is grotesque, he appeals to a very real sense of malaise in a broad swath of the electorate. . . . We are moving into uncharted territory as central governments desperately seek to keep the system going.”

    The fact is, I have never felt such a sense of foreboding for our Country as while watching that Republican Primary Debate last night. The thought that ‘that buffoon’ is currently the most successful candidate for president on the right; and that, if nominated, his likely opponent is incorrigibly sleazy and probably indictable; and that, if he’s not nominated due to the backroom connivance of a brokered convention we risk armed militias taking to the streets of our eastern cities (not merely birdwatching reserves in Oregon) — this is enough to keep one awake at night! We can’t even discuss what fiscal policies DT would pursue because the candidate has none, or gives the answer du jour, yet people in the audience cheer his refusal to ‘debate.’

    I feel compelled to respond to Reed’s comment that “Our fundamental problem is how we spend our time, what we worry about and talk about endlessly: banal nonsense. Such as much of what we heard at last nights debates. Or for another example the worry we put into underground pipelines.” Thank goodness life is full of banal nonsense, and we call it cocktail conversation or something similar and go home afterwards and say idly to the spouse, “That sure didn’t persuade anyone there of anything but wasn’t that gathering pleasant!” etc., etc. And it helps to keep things like arguments and the ACP pipeline and spilled fly ash in perspective even while we debate them. But this presidential debate debacle is qualitatively, grossly, different. There is so much at stake, yet this is the best we can do??

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Acbar –

      I share your thoughts. And likely agree with you more than you might think.

      With regard to your first 1st two paragraphs:

      Over the past several years I have increasingly worried that we were approaching a time that would help us better understand how the highly cultured and most educated population in Europe (Germany’s) could decline so fast into disarray during the 1920s and early 1930s. And then descent into the barbarity that it did.

      Germany’s was a society and culture that literally torn itself and its institutions apart. I believe we have been on the course since roughly 1965. That since that time we have been ripping away from our citizens those things that a civilized society requires.

      For example, we have torn up the people’s ability to be raised by and live within a family. We have torn up peoples faith. We have torn up their history, both individually and collectively. We have torn up their motivation and ability to get an education. We have torn up the ability of men and women to live together in stable relations. We have torn up their laws. We have promoted their free sex, free drugs, and their contempt for others. We have invented an ever increasing array of false differences to promote hate, fear and suspicion among people – using ever finer distinctions of sex, income, urban, rural, professions, police versus blacks, etc. etc. –

      And we are madly about creating ever more people dependent on the government. This breeds every social ill imaginable, destroying their freedom and self respect for starters. One of its end game manifestations is the imposition of Trigger Warnings – that is the ultimate tool of tyranny in civil society before its collapse into violence.

      All this is driven by our elites who marshal this hated for even more selfish reasons, for their own political, economic, and social gain under what is becoming an increasingly lawless society and government.

      And this, what has been going on around us now for some 50 years, is now rapidly accelerating as we now are reaping what we have sown. And now we get to your last paragraph. For now what we have sown and continue to plant in the minds and emotions of our fellow citizens is what we are reaping. And its that sowing is what I mean when I say:“Our fundamental problem is how we spend our time, what we worry about and talk about endlessly: banal nonsense.” For clarity I should have deleted the word banal.

      1. No, ‘banal’ was apt. And of course in the context of last night’s debate, what you said was entirely called for. I merely wanted to draw attention to the need for some modicum of social grace, including that rule of polite conversation that permits us to debate serious issues, even disagree with heartfelt intensity, yet go out drinking and dining afterwards, that seems to have been lacking in Donald Trump’s upbringing. The people that wrote our Constitution managed to do this. Diplomacy is based on it. It’s the subject of a fine play over at Arena Stage these days, “City of Conversation.” You know what I mean perfectly well. And you capture the social hence political manifestation of this perfectly: “We have invented an ever increasing array of false differences to promote hate, fear and suspicion among people … driven by our elites who marshal this hatred for even more selfish reasons.” Compared to this, arguing over another gas pipeline is trivial, even banal. I wish it were not so.

        1. Reed Fawell 3rd Avatar
          Reed Fawell 3rd

          While you are likely right in context of pipelines here on this Blog, there is one thing Hillary Clinton and I agree on based on her words. We have to find ways to build big infrastructure without endless litigation and banal disputes that waste our time and vast sums of monies for no reasonable or valid purpose. So need to alter regulation that now hobbles what we very much need to build. Being the skeptic I am, I fear however that Hillary push come to shove might well exempt pipelines.

          I agree with you about the drinks afterwards. But also feel now is time to stand up on things we’ve often avoided saying in public before but understand full well the constraints many people rightfully feel. de Tocqueville deals at length with how American democracy works to paradoxically build such restraints in the free exercise of public opinion in negative ways.

          I’ll try to catch City of Conversation at Arena.

          1. “We have to find ways to build big infrastructure” — indeed, as the Keystone Pipeline proves. Also, of course, true of large electric infrastructure of all kinds, and large transportation projects, . . . .

            We were reflecting on this the other day driving back from the-middle-of-nowhere, WV via “Corridor H” (the new US 48, about 2/3 built from I81 at Strasburg VA through Davis and Elkins and Buckhannon, WV to I79). Here is this wonderful expressway, a memorial to Robert Byrd, an engineering marvel, blasting its way across the landscape: scarring every mountain and valley it crosses, probably trampling on an endangered species of newt or two, yet who would see those mountains and valleys without this new road, and how would central WV ever escape its cycle of poverty without the influx of visitors’ dollars and culture? Sections of this road are not finished and the contrast with the driving conditions and clutter along the old road is stark. Yet upon returning, as the expressway ended (for now, just the other side of Wardensville), and, shortly after, we reentered VA on old Route 55, we couldn’t help observing how pretty the two-lane road with its farms and vistas and stores and churches was; the slight detour to see a bit of Cedar Creek reminded me of times past in a canoe on that very stretch. Isn’t this why we have environmental regulation, and throw so many obstacles in the way of “development”? Where will US 48 cut through that pretty countryside and what tradeoffs will be made when the expressway is extended to I81 (as Virginia has committed to do)?

            So I am of two minds about it. I suppose anyone who remembers the 1960s and 70s also remembers the birth of ‘environmental consciousness’ as well as all the red tape that followed. I even suppose my legal career was substantially furthered by the existence of all those obstacles to progress. Of course we’ve gone too far with regulation and obstruction, as most bureaucracies are inevitably power hungry and risk averse. Of course there’s long term economic harm from this. I don’t know of any simple way to find the right balance. What I do know is, Jefferson was right, an educated electorate helps. Throw in a commitment to civil discussion, respect for others, and you have the reason most of us follow Jim’s blog. BR is a irreplaceable forum for anyone who follows it.

            I’m of two minds about the Trump phenomenon, too. Of course the lack of civility, the crudeness, is appalling in itself, and the tendency to replace intelligent discussion with authoritarian sloganeering is disturbing. But our commitment to a democratic political process demands a big tent: those who are excluded from it will find another process. It is an appropriate time to remember de Tocqueville, and also that populist political creature of the times, Andrew Jackson. It’s been said that we need to fight a big war, and a big societal battle, every 50 years or so in order to inoculate society against the complacency of peace. On that scale, we should accept that we’re overdue for The Donald.

          2. Reed Fawell 3rd Avatar
            Reed Fawell 3rd

            Acbar above said:

            We were reflecting on this the other day driving back from the-middle-of-nowhere, WV via “Corridor H” (the new US 48, about 2/3 built from I81 at Strasburg VA through Davis and Elkins and Buckhannon, WV to I79). Here is this wonderful expressway, a memorial to Robert Byrd, an engineering marvel, blasting its way across the landscape: scarring every mountain and valley it crosses, probably trampling on an endangered species of newt or two, yet who would see those mountains and valleys without this new road, and how would central WV ever escape its cycle of poverty without the influx of visitors’ dollars and culture? Sections of this road are not finished and the contrast with the driving conditions and clutter along the old road is stark. Yet upon returning, as the expressway ended (for now, just the other side of Wardensville) … we reentered VA on old Route 55, we couldn’t help observing how pretty the two-lane road with its farms and vistas and stores and churches was; the slight detour to see a bit of Cedar Creek reminded me of times past in a canoe on that very stretch.

            Reading Acbar’s words I feel like Bogey in Ricks in Casablanca:

            “Of all the broads in all the Gin Joints in all the world, and she has to walk into mine.”

            I had a long and deep affair with Old WV Route 55 – her curves and slants, her straightaways and watery hot flashes amid her green mountain laurel, and rivers running through wild wonderful places and people and times. You could build a life around that road and take it around the world, and I did.

            But now she’s gone. And you can’t go home again.

      2. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        Just above I mentioned that:

        “For example, we have torn up the people’s ability to be raised by and live within a family. We have torn up peoples faith.”

        There is a very fine new book out, one worth reading.

        Called “Soul Mates,” the book is so well written, so well researched, and reasons so wisely on the results of its research, that its doubly heartening to find it written by two professors.

        It also deserves particular attention because it focuses the interplay of faith and marriage within African American and Latino couples, the results those factors bring to couples, kids, and community, in contrast to other couples living in the absence of marriage and faith.

        Soul Mates: Religion, Sex, Love, and Marriage among African Americans and Latinos, by W. Bradford Wilcox and Nicholas H. Wolfinger, published by Oxford University Press, Feb. 1 2016.

        Wilcox is Associate Professor of Sociology and Director of the National Marriage Project at UVA. Wolfinger is Professor in Dept. of Family and Consumer Studies and Adjunct Professor of Sociology at the U of Utah.

        1. Just downloaded the book and read the first chapter last night. Interesting thing about it, one of the authors is a self-described conservative, the other a liberal. So, this is not an ideological tract.

          Interestingly, the authors see religion as a positive force for the inculcation of morals and attitudes that are conducive to happy and enduring relationships and marriages, and they see religion as a positive force in the Latino and African-American communities they examine. They don’t see it as a panacea — they acknowledge that “structural” forces in society make life difficult for the poor — but they say it does a lot of good.

  8. Great headline, Jim, for exactly what I’m wondering about — but in an entirely different area.

    If the American political world continues on present trends, flash forward to October and imagine ISIS leaders’ thinking. ISIS — who believes in, and prays for, the final battle of the apocalypse between the forces of “Rome,” or Christianity, and the Islamic caliph — will enjoy an enticing opportunity.

    If only someone without the ability to control himself was leading the Christian nations, ISIS will think, someone who has promised to be tough (but has no actual history of toughness), someone who accepts no reasonable advise, someone who always doubles down on ridiculous comments. ISIS leaders will realize they can fulfill their religious prophecy of the history-ending bloodletting around the Syrian town of Dabiq.

    They will get Donald Trump into the White House if he gets the GOP nomination. All they must do is stage some media-grabbing attack and his feigned toughness will carry him into power because too many American voters are people who react, not think.

  9. LarrytheG Avatar

    I guess I’m not understanding what the politically disaffected were expecting to happen different from what is happening….

    I never thought there was going to be unanimity among the disaffected on who might be the person they’d unite behind.

    We know they’re deeply unhappy but I’m not sure we know with any precision what they agree to do – as a group..

    so perhaps it would not be that ugly to suggest that the politics largely reflect the uncertainty of the disaffected electorate – no?

    I don’t think folks on the left are near as apoplectic as on the right – yet.


    1. Yet. The all-important qualifier, here.

  10. I am ever so glad I don’t watch TV any more. Like this really matters? I swear the world is laughing at us.

  11. LarrytheG Avatar

    well.. it should be obvious that governance by it’s very nature is elected folks representing a diverse electorate.

    if someone believes that elected should only “purely” represent the constituency they identify with – and if not they are “traitors” as currently heard expressed almost hourly in the 24/7 news cycle – well there’s going to be- as they say – a whole lotta trouble in river city.

    If that’s what folks want and if they donj’t get it – their inclination is to burn it down and walk away…

    well.. if everyone thinks that way – we ARE “doomed”.

    but I do have eternal faith that as crazy as things have become we still have enough folks rooted in practical reality and accepting of the flawed world we live in as a consequence of humans being flawed … then we’ll somehow muddle along – not without a whole lotta torches and pitchforks mind you… and perhaps a few crazies more over board than that… who demand special accommodation arrangements for their particular maladies… so be it.

    you can bet, without question that the US at it’s inception was one very messy political realm… and perhaps we’ve come full circle and many are revisiting the dilemma the Founding Fathers had in trying to craft a plan for governance that was better than the Kings of England approach and not anarchy – but still “worked”.

    today is a repeat test of that and we are – living it.

  12. The problem with Jim’s thesis is that it flies in the face of 80 years of economic theory. A student of Econ 101 should be able to tell you that lowering the price of anything will raise demand for that thing. Therefore, when the Fed artificially held down interest rates (i.e. the price of capital) then capital should have been in higher demand. Historically, cheap capital has spurred investment which spurred employment and wage gains which spurred consumer spending. The result of the fed’s action should have been increased growth, tightening labor markets, rising wages and spending and the specter of inflation. None of that happened. Why?

    1. The fed moved too quickly / too far and ignored human psychology.

    Rapidly lowering interest rates to artificially low levels of “near zero” / negative inverts the risk / return curve. Financing debt (e.g. savings accounts, buying bonds) no longer provides yields worth pursuing. Conversely, riskier investments (e.g. stocks) over-perform relative to their inherent risks. We’ve seen that happen. The S&P500 hit a 10 year low on Feb 9, 2009 at 735.09. Today (seven years later) the index trades at just about 2,000. That’s a compound annual growth of 15.37%.

    The fed’s moves to rapidly decrease interest rates came on the heels of the so-called Great Recession. Many Americans were shell-shocked by the economic turmoil. Stock ownership tells part of the tale. Just before the dot com bubble burst in 2000 62% of Americans owned stock in some way (e.g. directly, 401(k)). There was a brief dip in this percentage but stock ownership came roaring back to 65% by 2008, just before the recession became obvious. By 2009 it was 57% by 2013 it was 52%. In other words, 3% of Americans exited the stock market between 2009 and 2013 – a period when the S&P500 more than doubled. Today, 55% of Americans own stock – a full 10% decline from 8 years ago. Fear from the Great Recession caused a significant percentage of Americans to miss out on one of the great bull markets in US history.

    2. The fed failed to adequately consider the widening income gap.

    90% of Americans earning $75,000 or more owned stock before the recession. 88% of that cohort owns stock today. There is a strong correlation between income and education. One factor favoring the relatively wealthy is their understanding that capital has to go somewhere. Poor returns for debt instruments all but guaranteed strong returns for equities. The fed’s actions propelled the S&P500 ever higher.

    3. Demographics

    Any reputable financial advisor will tell a 30 year old with money to invest to buy and hold equities. That investor has the time to ride out the ups and downs of the stock market before he or she needs the money for retirement. That same reputable financial advisor would give the opposite advice to the 30 year old’s 70 year old parents. During the period from 2000 – 2011 (the latest data I could find) changes in US Household Net Worth varied considerably by age bracket. Middle aged people lost ground while older Americans (65+) gained ground. However, the differences by wealth bracket within the 65+ cohort were dramatic. Essentially – if you were rich enough and smart enough to ignore the advice of the financial adviser you did very well. If you weren’t – well, not so much. – see Pg 3/9.

    4. Marginal utility of money

    If you give Bill Gates $1,000 he’ll probably add it to one of his investments. If you give an unemployed person $1,000 he or she will probably spend it. As the benefits of lowered interest rates increasingly accrue to people with the money, education and willingness to take risk who buy equities the returns do not add much to consumer spending. The middle aged, middle class people who usually drive consumer spending are not reaping the benefits of lower interest rates. They have no additional wealth to spend. So, where do the relatively wealthy who did reap the benefits of low interest rates put their investments …

    Hedge funds were invented in 1949. By 1990 there were 300 hedge funds. Today there are 10,000.

    At the end of the day, the differences in education, wealth and demographics in the United States have created a situation where lowering interest rates no longer drives up capital investment, employment and wages.

    1. Don, I agree with all four of the points you made above. They are similar to what I’ve said on this blog, and seem entirely consistent with my post. Yet you say, “The problem with Jim’s thesis is that it flies in the face of 80 years of economic theory.”

      Could you be more specific about what you’re taking issue with?

      1. I take no issue with your post. However, a lot of people understandably struggle to understand why lowering interest rates doesn’t spur economic growth. Your problem (and mine) is to convince people that the past 80 years of economic history no longer holds.

  13. 2014 – No way Trump will run for the Republican nomination
    2015 – No way Trump will get the nomination
    2016 – No way Trump will be elected president
    2017 – No way President Trump will fire all those nukes
    2018 – No way we’re doing what those apes say

  14. Jonathan Wight Avatar
    Jonathan Wight

    Interesting post, Jim. I don’t doubt that Bill Gross is highly competent in his field. But that doesn’t mean he understands global macroeconomics. When he writes “private sector savers are growing leery of debt piled upon debt….” what universe is he living in? Private sector savers are willing to lend to governments at ridiculously low rates. “Growing leery” would mean a rise in interest rates, not a fall. Private sector savers are growing leery of austerity, which kills demand and makes factories lay off workers. Who will invest when factories are running below capacity. Interest rates are low because of lack of demand. We appear to be facing a monumental collapse in global demand. In hindsight we may discover this has something to do with the squeeze on the middle class, and the huge rise in inequality around the world.
    Jim and I have different views about the Fed. I say the Fed is almost powerless given the huge influx of foreign private capital. Jim states that “Central governments are the world’s biggest debtors….” I don’t have world figures, but here in the U.S., total debt is about $60 billion and central government has debt of slightly less than $20 billion. So it is the private sector that accounts for 2/3rds of debt. Jim makes excellent points about vested interests in health care and (gulp) academia.
    Thanks for raising these issues, Jim, even if I think the prognosis is only half-right. Cheers, J.

    1. John, Let me ask you this: If interests rates would be as low as they are now without Fed intervention…. why did the Fed intervene? What was Quantitative Easing supposed to accomplish?

      1. Jonathan Wight Avatar
        Jonathan Wight

        Jim, at the time the Fed did QE they were anticipating that rates might rise as everyone got spooked. It was a surprise, after the fact, to learn the opposite. We are all still surprised as heck by the resilience of low interest rates despite huge debt build-ups. Do you think a government bureaucrat is going to admit that they are powerless? Surely not. Incidentally, Keynes laid some of this out fairly well (the powerlessness of the monetary authority during times of liquidity trap) in The General Theory.
        To some extent QE sets the tone for the market, letting people know the Fed isn’t going to contract (and the Fed has a lot more power hitting the brakes than they do stepping on the accelerator). Asymmetric influence is at work.

  15. With low interest rates and low energy costs, we might expect a trend towards more American jobs. But it may not happen for two reasons: (1) manufacturing CEO’s want to operate with as few employees as possible, and (2) progressives want to outsource all jobs that they feel are too “dirty” for America. So on both sides of the equation, we are happy to outsource jobs.

    I don’t know if I am exactly correct, but I feel like when I graduated college, most (eg; chemical engineers) went to work for industry. These days I feel like more (the majority?) go to work for EPA and environmental groups. So we have this tremendous anti-industry movement ingrained into our body politic. US Corporations have limited interest in hiring more folks nor meeting the eco-expectations of modern society, so here we sit.

    So I dunno, if you’re a progressive, you might be quite pleased with the way things are headed. If you’re hoping for a stronger economy and a more self-sufficient American industry, less dependent on importing everything, we need quite a massive revamp of Corporate, Congress, regulatory and public attitudes.

    1. Very nicely and succinctly stated.

  16. LarrytheG Avatar

    re: ” Private sector savers are willing to lend to governments at ridiculously low rates. “Growing leery” would mean a rise in interest rates, not a fall. Private sector savers are growing leery of austerity, which kills demand and makes factories lay off workers. Who will invest when factories are running below capacity. Interest rates are low because of lack of demand. We appear to be facing a monumental collapse in global demand. ”


    People do not want to invest when they fear that investing in something will lead to loss of their money.

    so folks who might invest are not – they’ve parked their money because they do not see strong growing demand for manufactured products nor natural resources. Healthcare and services and tech sector are the primary economy right now and those things are provide with …labor – not capital…

    manufacturing is high end – often automated or done with high tech workers not low level labor working in big manufacturing plants – except in low labor cost countries.

    so who wants to borrow money to build plants? not too many..

    the US has vast pools of folks who have very minimal educations basically suited to manufacturing – …

    what will these folks do to make a living , earn money – and be “aggregate demand”?

    you can blame govt but not sure how you do.. when much of our society still thinks we should have “jobs” for folks with basic education…. how does govt get that blame when some say we need Common Core K-12 and most everyone getting at least 2 years of community college and others call it socialism and a liberal “plot”?


  17. LarrytheG Avatar

    low interest rates/cheap capital money is not appealing to investors if there is no demand for products which require capital to build plants to make them.

    You don’t build plants to make widgets and provide jobs – when no one wants the widgets ( i.e. aggregate demand).


    1. Well yes of course; but even if people want the widgets, you also don’t build plants to make widgets and provide jobs in this country when Chinese widgets are cheaper and durable enough.

      The question in this global economy is, what can we do to create goods and services that provide the consumer with more value for the price than the competition? Maybe the greater opportunity is not manufacturing widgets but providing services. No amount of cheap capital is going to convince me to invest in a plant to make things we cannot make for less than the Chinese — unless you prohibit the Chinese goods from getting in, or impose a tariff that raises their price artificially. Then I might; but then the rising cost of consumer goods here without increased sales of exports hurts everyone, and ultimately drags down the economy.

      So, what are we going to do with those “vast pools of folks who have very minimal educations basically suited to manufacturing” except retrain them?

      1. LarrytheG Avatar

        re: ” So, what are we going to do with those “vast pools of folks who have very minimal educations basically suited to manufacturing” except retrain them?”

        there ARE jobs – but they DO require higher levels of education and skills.

      2. LarrytheG Avatar

        re: ” So, what are we going to do with those “vast pools of folks who have very minimal educations basically suited to manufacturing” except retrain them?”

        well.. if we continue to pretend that they don’t need to re-train and that govt has no legitimate role in doing that- we’ll be paying for their entitlements – right?

  18. CrazyJD Avatar

    All you have to understand about the dysfunctional institutions is basic Economics 102, Price and Cartel theory. Even Jim fails to miss the point when it comes to higher ed and health care: They’re only run to serve their own interests if the market for such services lets them. And it does. Their both impacted markets. To the extent they are surrounded by barriers to entry, they become inefficient. In Virginia, we have certificates of need. However Larry and Peter want to twiddle twaddle around the edges, certificates of need create a barrier to entry and an impacted market. And Jim has written at length about higher ed and how government payments have let colleges ratchet up tuition and fees.

    But the prime example is government. There are fewer checks and balances on government than any other institution. It is as close to pure monopoly as exists. You can’t walk down the street and buy services from another government. You can move so that you fall under the auspices of another local government, perhaps, but in Virginia such a move has less impact because of Dillon’s Rule and the amount of government that is controlled by the State. You have to move to another state.

    Of course, many who have the means are doing just that (Interesting that those who move tend to be at opposite ends of the economic spectrum: If you’re rich, you move to Florida where there’s no income tax. If you’re poor, out of work, have nothing to lose (can you say government dole?) you move, until recently, to North Dakota to find work.)

  19. LarrytheG Avatar

    Crazy – you are full of it dude –

    too much ideology not enough of reality.

    no COPN – how do you want to pay for charity care? Oh you say you won’t pay? BZZZZTTT … next question … you sound like you MUST be related to Jim… too many similar ideological accouterments, alter ego?.

    how come OTHER OECD govts are beating ours when it comes to education and competing for 21st century jobs?

    is their govt “better than ours or is it more “socialist” and also “doomed”?

    what say you Mr. Bull Feathers?

    1. CrazyJD Avatar

      Larry, Larry, Larry,

      You are never able to directly respond. Instead, you go sideways. And you did here, exactly as I promised. You twiddle twaddled around the edge by complaining that charitable care would suffer without COPN. It may indeed, or it may not. The point is that fewer hospitals necessarily and without fail means higher costs. Your charitable care issue is a side issue. You may consider it important, but it doesn’t diminish the main point. My point was and is that, generally speaking, dysfunctional institutions in the sense Jim uses that term, are those that have no or few barriers to entry. Government. Hospitals under COPN. Even you can pick up on this—dude.

  20. Peter Galuszka Avatar
    Peter Galuszka

    The problem I have with this post is that it kinda goes all over the place.

    We have Trump’s vulgarity, the size of his sexual organ, debt, bond issues, narco-terrorists and the usual Baconian warning that the end is near. How do all of these things relate?

    As for Jim’s treatise on central banks and keeping interest rates low, well, gee, that’s been the recipe for financial stability for decades.Think Paul Volcker and stagflation.It is standard IMF advice. Is Jim saying that we should let interest rates run? Who benefits? The 1 percent who would see their investments make more money?

    I’m no big fan of Big Banks and believe they contributed mightily to the 2008 recession thanks to the policies of George W. Bush and Bill Clinton. The recovery plan included the Fed keeping rates near zero to avert a true catastrophe. Is it working? Jim would say now but have you seen the most recent jobs report?

    Someone help me out here but what does this all have to do with the size of Trump’s hands? Does the very fact that you have a tactless guy running for president (successfully so far) mean it is the end of times?

    BTW, I just found my copy of “Boomergeddon” and will be referring to it for answers.

  21. Jim is like a lot of conservatives who are flummoxed by the ascent of Donald Trump. He casts about looking in various directions to find some logic to explain The Donald’s seemingly bizarre popularity. If you want to read some truly helter-skelter commentary on this matter go to Bearing Drift. That conservative blog has been losing its religion for the past six months over The Donald.

    I have over 3 million air miles. That means I have flown on commercial airlines for more than 6,000 hours on planes in the air. That’s 3 standard work years sitting in an airplane seat. It’s no wonder that I am demented. The many plane trips have caused me to become something of an amateur expert on airline safety. Looking over airplane crashes one thing becomes clear – it’s rarely a single problem that brings down a plane. It’s almost always a series of mistakes, errors and accidents that cause a modern jet airliner to fall from the sky. The same is true for Donald Trump’s popularity. There is no single thing that will explain Trump’s popularity. It can only be explained as the somewhat predictable consequence of many events.

    Here are a few:

    1. There is a large disaffected group of Americans who have become increasingly frustrated as productivity (since 1979) has risen 8X faster than pay. If the minimum wage would have grown at the same rate as productivity it would be over $18 / hour by now. The middle class has seen a similar lagging in earnings growth. This group forms the basis of support for non-traditional candidates like Sanders and Trump.

    2. The Republican Party has become dominated by elitists who believe that a huge number of Americans want “litmus test” conservatives as candidates. On every topic from abortion to taxes to unrestricted gun rights these elitists have postulated the need for candidates of conservative purity. You would think Marco Rubio was Ted Kennedy when you read what the purists write. They are wrong. They have vastly over-estimated the conservatism of the Republican base and the Republican base is poking them in the eye with Donald Trump.

    3. The intellectual effete who prefer art shows to hockey games see Trump as rude and crude. They find his coarse comments shocking and prima facie evidence of both his lack of fitness for office and his inevitable failure. A huge percentage of Americans prefer sports to art, refuse to speak in politically correct terms and are only too happy to engage in ribald humor. If Jim ever went to a Redskins tail gate he’d see Americans of every size, shape, creed, color and sex engaged in conversation that would make Donald Trump blush. The elite don’t understand Americans.

    4. Obama (and liberalism) has failed. Conservatives hold no monopoly on failed policies. After 7+ years in office the Obama Administration has presided over most of the only period in American history where real GDP growth has been under 3% every year for a decade. Meanwhile, Obamacre and tax hikes haven’t made a dent in either income or wealth inequality over Obama’s 7+ years in office.

    5. Polarizining politics. The share of Americans who express consistently conservative or consistently liberal opinions has doubled over the past two decades, from 10% to 21%. That’s still only 1 in 5 Americans but it’s that 20% who host the political talk shows and write the blogs.

    We live in a country with two political parties. Those parties (and their rabid adherents) have become more polarized and more extreme over the last 20 years. Meanwhile, neither eight years of Bush nor nearly eight years of Obama have made a difference in the plight of middle Americans. Against this backdrop the political establishment proffers more of the same – Ted Cruz and Hillary Clinton. A litmus test conservative and a crony capitalist pseudo-liberal.

    Why is anybody surprised by the popularity of outsiders like Sanders and Trump?

  22. LarrytheG Avatar

    re: Sanders vs Trump – far far left vs far far right.

    Dems like universal health care – have liked it from Day 1 when Medicare was passed.

    they have not moved “left” on that issue and you’ll not find Dems freaking out over Sanders vs Clinton – Most of them simply do not believe that Sanders is electable and that most of his proposals would go no where legislatively.

    Most Dems have ALWAYS supported fairly liberal immigration policies – from the time of John F Kennedy – when he wrote Nation of Immigrants.. Dems have not moved “left” on that either.

    Dems have pretty much always supported things like minimum wage and equal pay – affirmative action – non-literal interpretation of the Constitution, etc, etc..

    I have yet to understand exactly what they have moved “left” on….

    the GOP , OTOH – has CLEARLY moved right and CLEARLY disavowed positions held by even folks like Reagan and Bush and now call GOP with those kinds of positions RINOs who need to be expelled from the party.

    Obama took over at the moment the country had shed millions of jobs and was on the verge of a depression.. It HAS been a LONG slog back and no, we are still not there not because of his policies per se but because the world has automated and globalized and no matter who is POTUS – GOP or DEm – that’s not going to change… we’re not going back.

    Not only that, we’re not going forward if we don’t accept the truth that education-wise – we are behind.. and if we don’t get the fear of God in us – it’s going to get worse.. we have a 20th century education system and our grads are not simple not competent at 21st century skills.. that’s the simple truth.. We’re important labor via HB1 Visas in part because better educated folks are willing to work for less that our “better educated” are.

    The fact that some buffoon like Trump has gained millions of supporters by basically repeating the propaganda that the right has been propagating from the last 7 years is indeed ironic and rich.. he’s giving the suckers what they want to hear and it’s working like catnip…

    Bacon is genetically predisposed to apocalypse now – I’m convinced it’s a part of him like a nose or ear… its just who he is – some folks are “the sky is falling ” types from they day they emerge from the womb!!!


    The GOP is so desperate right now – that if Clinton does not succumb to the email “problem” – the GOP is totally going to freak out because they totally FEAR that neither Trump nor Cruz has a snowball chance come fall.. One is a clown/buffoon and the other is so far right – that he’ll be lucky to hold onto the GOP moderates…

    This is by far the most wild election to come our way – in a long time… maybe since Goldwater ran…

  23. LarrytheG Avatar

    re: ” We live in a country with two political parties. Those parties (and their rabid adherents) have become more polarized and more extreme over the last 20 years. Meanwhile, neither eight years of Bush nor nearly eight years of Obama have made a difference in the plight of middle Americans. Against this backdrop the political establishment proffers more of the same – Ted Cruz and Hillary Clinton. A litmus test conservative and a crony capitalist pseudo-liberal.”

    I don’t buy the “rabid adherents” characterization… that’s just broad brushing…

    the real question is what would the two parties do about:

    1. – education
    2. – health care
    3. – immigration.

    pretty sure – that Clinton would pursue policies to increase education – and yes from govt – but not “free”

    pretty sure that Clinton would probably do some version of amnesty – per what Dems have pretty much advocated all along

    pretty sure Clinton would continue Obamacare – with some reforms but to continue some kind of individual mandate and continuing market exchanges.

    we pretty much know this – it’s not “extreme”.. it’s not that different that what Dems have advocated since her husband was POTUS and he advocated health care – and actually got SCHIPS passed for childrens health care which survives to this day.

    the real question is this:

    Does anyone REALLY have any idea of what the GOP would do about health care, education, and immigration ?


    does anyone have a clue what they’d do ?

    this is what folks who would vote GOP – would vote FOR?

    what say you Don? oh yeah.. they’d NOT do what the Dems would do, right? well, heckfire – we KNOW THAT – but what WOULD THEY DO?

    what are you actually voting FOR if you vote GOP?

    ideas? do you think that Cruz would do what Trump would do? If Cruz got elected do you know right now what he’d do?

    1. The rabid adherents are the 21% who are consistently conservative or consistently liberal.

      As for the rest of your comment … concentrate Larry concentrate. The question is why Trump is so popular not what Hillary would do if she were elected.

  24. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    de Tocqueville in 1835 explained Trump thus:

    “There are countries where a power in a way external to a (country’s) social body acts on it and forces it (that country) to march on a certain tract.

    There are other countries where force is divided, placed at one in society and outside it.

    Nothing like this is seen in the United States; there society acts by itself and on itself. Power (there) exists only in (society’s) bosom; almost no one is encountered who dares to conceive and, above all, (to) express the idea of seeking it elsewhere (outside society).

    The people participate in the drafting of (the) laws (of the United States) by the choice of the legislators, in their application, by the election of the agents of the executive power; one can say that they govern themselves, so weak and restricted is the part left to the administration, so much does the latter (the Administration) feel its popular origin and obey the power from which it emanates.

    (Hence) the people reign over the American political world as does God over the universe. They are the cause and the end of all things. Everything comes out of them and everything is absorbed into them.”

    In 2010, the Speaker of the House said that Congress would have to pass a law before the people would have a right to know what was in it.

    Thereafter the President of the United States said he would pick up the phone and wield his a pen to achieve his own agenda.

    Thereafter Justice Scalia in dissent to a majority opinion binding on the American people wrote:

    “… Since there is no doubt whatever that the People never decided to prohibit the limitation of marriage to opposite-sex couples, the public debate over same-sex marriage must be allowed to continue. But the Court ends this debate, in an opinion lacking even a thin veneer of law. Buried beneath the mummeries and straining-to-be-memorable passages of the opinion is a candid and startling assertion: No matter what it was the People ratified, the Fourteenth Amendment protects those rights that the Judiciary, in its “reasoned judgment,” thinks the Fourteenth Amendment ought to protect.

    That is so because “the generations that wrote and ratified the Bill of Rights and the Fourteenth Amendment did not presume to know the extent of freedom in all of its dimensions . . . . ” One would think that sentence would continue: “. . . and therefore they provided for a means by which the People could amend the Constitution,” or perhaps “. . . and therefore they left the creation of additional liberties, such as the freedom to marry someone of the same sex, to the People, through the never-ending process of legislation.” But no. …”

    So now millions of people within American society have suddenly joined the the democratic process by voting to fix tyranny by the American elites.

    1. de Tocqueville also noted that rich, middle class and poor Americans all socialized together. Being from Europe he found that stunning and refreshing. In the last few decades that has ended. The elite who run both parties and the chattering class which comments on American politics want nothing to do with the poor and the middle class. They attend art shows not NFL tail gates. They drink Chardonnay not PBR.

      Then, the wonder why the hoi pilloi don’t trust them,

  25. LarrytheG Avatar

    I think using de Tocqueville with Trump in the same sentence borders on sacrilege…


    I doubt seriously if Trump has ever heard of the man….

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      No – quite the reverse.

      You can be sure that de Tocqueville understood Trump extremely well. That is one of many reasons why he and other great historians (political, cultural, social) demand our great study and understanding.

      And its why we today here in America are in such a fix. We today do not study our great historians of the past. Hence we are mostly ignorant. And usually, by and large, we do not know what we are talking about when discussing the present or the past.

      And typically too, it is why everyone today thinks they know everything. That usually happens when we know nothing, we think we know everything. So we destroy the good and the necessary that has been built for us over generations, and we replace it with what rarely works, and we cannot get whatever is left from past to work either.

  26. LarrytheG Avatar

    so Trump knows de Tocqueville and his writings?

    I bet Trump knows Tom Mix and Batman… but de Tocqueville ?


  27. Peter Galuszka Avatar
    Peter Galuszka

    I won’t get into the Batman and Robin, but the conservatives on this blog are bloviating lines that are absurd. Obama, for instance, has deported more undocumented aliens than any other president. Frankly, I have problems with even that, but anyway. Obama was in charge when they got rid of Osama Bin Liden and I remember blogging on this very same site about that and the usual characters came after me. Ain’t true, they said. Let’s look into Hillary’s emails.

    Comparing “Democracy in America” with Donald Trump is beyond absurd. No further comment. Simply plain stupid.

    And where is Jimbo to defend his jumbled thesis? Inquiring minds want to know.

  28. LarrytheG Avatar

    well, for 7 years, FOX, Limbaugh, Beck, Brietbart, Malkin, Ingram, Levin, et all have been stoking the anti-govt fires and Trump came along and had pitch perfect understanding AND was media savvy to boot and as they say – the rest is history.

    Like Trump , his supporters have no idea what they want to do – other than burn it down with glee…

    At this point – Trump supporters really don’t seem to care what the Trump “plan” is – other than it’s not the “establishment” plan.

    but I DO take the movement SERIOUSLY – it’s real… and it’s actually a mirror reflection of us – my own precinct was 2-1 Trump….

    1. We are all coming to grips with the fact that it’s real, although the DT package is delivered with way too much embarrassing/ authoritarian baggage for my comfort. But apart from how any of us individually might feel — how could Trump be stopped? Here we have Mitt Romney calling for anyone but Trump, just get it to the Convention floor; and here we have Glenn Beck announcing a dire prediction/threat: if Kasich and Rubio stay in the race and manage to deny Trump a first ballot majority but he remains the clear front runner, Beck sees a brokered convention giving the nomination to anyone else as tantamount to “war” on a large portion of the electorate. Beck argues that Cruz and Trump simply have to be made to slug it out by eliminating the favorite-sons and also-rans before it’s too late for Cruz to win heads-on.

      I have a real problem with that. So Glenn Beck is afraid of what could happen if the Republicans don’t immediately make Cruz their great Hope To Trump Trump. That sounds like a demand for appeasement. What is the Republican Party’s delegate nominating process for, why bother with any Party Convention, if the possibility of a meaningful free-agent delegate vote is off the table because we are scared to have it happen? What’s the point of the Democrat’s Convention if the “super delegates” are already in Hillary’s pocket and Bernie can’t win even with a majority of regular delegates? Are the Parties themselves so moribund that their quadrennial national conclaves have no more significance than a “meeting” of the Electoral College?

      As you note, Trump has many supporters, and not just in Spotsylvania. He might pull off a first ballot majority in the Republican delegate count (which would moot further discussion); but it remains to be seen whether he is already so polarizing a figure that he could never get more than say 40% in the general election against HRC; my children swear he’d do even less well against Sanders. The current nominating process has been peculiarly unhelpful in telling us that. But it seems like a legitimate concern for Republicans: whether their nominee is capable of winning.

      Do you think we at the point where to thwart Trump’s people is to cause a kind of war within this country? That’s a scary sentiment, reminiscent of the 1930s.

    2. By Jove – Larry gets it! Trump’s supporters don’t care about the details of Trump’s plan. They don’t care because they know all of the candidates are lying about what they can get done. Do you really think Bernie Sanders will push US tax rates to socialist levels through the House of Representatives? Do you really think Ted Cruz will end abortion?

      Trump’s supporters are poking a stick in the eye of the political establishment.

      Good for them.

  29. Andrew Roesell Avatar
    Andrew Roesell

    Dear Larry,

    I think that WE Trump supporters DO know what we are voting for: Tariffs on imported goods to bring back American industry; ending illegal immigration and sharply reducing legal immigration; ending the useless foreign wars begun by Bush I, Clinton, Dubya, and Obama; restoring free speech by ending political correctness with a President who violates its taboos; being elected without prostituting himself first to moneyed interests, which, necessarily entails betraying his campaign promises and voters once in office. That’s a good start.



  30. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    Gentlemen –

    We need to all calm down.

    This is not about Trump.

    This is about what our government, both democratic and Republican alike, and those who support and feed off the governing class: the lawyers, professors, pundits, corporate leaders, and Non profit ideologues, and now scientists and high tech, what they do every day to live off of the rich and powerful government that increasingly rules over the People, the rich and poor alike. Them, and all the other supplicants too.

    The People have had enough. They are not taking it any more. And this includes the most abused of all, our military.

    That is what Trump is ALL about.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Nor is this view Pro-Trump. Nor is it contrary to Achbar’s views stated above, views I deem quite reasonable.

      Rather I believe this abject, chronic, and corrupt failure on the part of federal government and the elites to serve and protect the American people and their constitutional system of government, is the fundamental problem that times now demand that we all address.

      And if we now fail to do so soon, it is perhaps possible that we as a nation will descent into chaos far larger than the chaos we are already in. And that the subsequent events could well include armed conflict and violence.

      And that the problem lies deep within both political parties.

    2. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      One example of the gross abuse by the elites and their out of control government is what the state of Virginia and Fairfax County want to do to control, tax, and toll everyday commuters on Instate highways in Northern Virginia.

      This latest scheme in a long running saga of abuse is nothing more that a speculative real estate play. One that is paid for by the taxpayer and every day commuter in Virginia in order for the Fat Cats in Northern Virginia to have their own unfettered use of public roads while they get rich making bundles of money in long planned land speculation plays and their development of yet more real estate along roads already in gridlock.

      For more details on that particular abuse see comments dated FEB. 29 and MARCH 1st found on this website at:

      1. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        And when you read about this most recent road abuse in Northern Virginia note how neatly it ties in with the this BR article and its comments published just a few days ago.

        Incredibly the INOVA and GMU project on personalized medicine matches a specific agenda item found in our Presidents recent State of the Union message. What a web our federal and state governments today weave among our business and non-profit supplicants: here for example its higher education systems, medical hospital systems, real developers, and private toll road builders and enforcers.

  31. LarrytheG Avatar

    re: “we must stop Trump”.

    let me count the ways the Founding Fathers INTENDED – one man -one vote and the Party of Lincoln … at least a goodly number – APPEAR to FEAR the common man ACTUALLY voting!!!


    Holy Mother of Manna .!!!!!

    the party that SAYS they “only” want to stop voter fraud with their predilection towards voter suppression – especially those they perceive to be of “low information” and thus unfit – … NOW – the TRUMP man a creation of their OWN – threatens their very existence. Talk about the biting the hand that feeds…

    but I digress!!!

    how many ways can I wax irony and hypocrisy?

    re: a “war”…. scary thought INDEED!

    but HEY – if we are nothing – we ARE a LAW and ORDER country – RIGHT!!


    Look – if a Hollywood Actor can become one of the GREATest leaders of the Free World why not a NYC Real Estate Mogul with questionable genitalia?

    I ask you my fellow Baconites – Is America about to be made GREAT or what?

    Next up – Mr. Trump and our Central Banking System.. 😉

  32. LarrytheG Avatar

    re: ” we’re gonna have a war if Trump voters are denied by the “establishment”.

    Well.. Trump voters are going to lose to the rest of the US voters.

    that’s the honest truth.

    when you add up the votes from the non-Trump GOP PLUS all the Democratic and Independent votes – Trump loses – not by a little bit – but by a LOT.

    And it IS the way the Founding Fathers DID SET THE COUNTRY UP – to begin with.

    We should revel in that – we should feel good about that. The world is full of anarchy of places that don’t have that.

    It should come as no small revelation that those with such strong anti-establishment passion – apparently do not in their heart of hearts actually subscribe to the basic tenets of the founding principles of the Nation – that we vote to elect and they, in turn, vote to govern a majority in each House of Congress and a majority in SCOTUS.

    Do we have a situation where a minority of voters who “like” Trump, no longer recognize that the country was founded on the very basis of every one voting and having that vote count – rather than anarchy from the disaffected?

    If so – we DO have an APP for that – the Federal Prison System. If you want to advocate violent overthrow – so be it but such things do have consequences.

    Either we support the country the way it was designed by the Founding Father to vote – and abide by the results – or at some point – admit that calling oneself an American actually does have a real meaning.

    The most important thing to each one of us – ought to be – that we do have a vote and yes – that vote does mean something.

  33. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    Larry says:

    “let me count the ways the Founding Fathers INTENDED – one man -one vote and the Party of Lincoln … at least a goodly number – APPEAR to FEAR the common man ACTUALLY voting!!!”

    Larry – I am sorry to inform you, but that is NOT what the “Founding Fathers INTENDED” –

    Quite the contrary, the Founding Fathers intended the reverse. Hence the remarkable genius of the US Constitution. Governance of the people, by the people, and for the people, a good life, prosperity, private property, and right of every to pursue happiness is far deeper than a sound bite.

    People must read their own history. Otherwise they will not know who they are. Nor will they know where they came from. Nor will they understand why they inherited all the blessings they enjoy, a society, culture and government so great. Nor they will not know and appreciate what their responsibilities and duties are if they expect to keep their society, their government, and the freedom and prosperity that goes along with it.

    We’ve been for far too long living mindlessly off the Fat of the Land.

  34. Peter Galuszka Avatar
    Peter Galuszka

    I had a moment of clarity when I read this piece in the New York Review of Books. It nails what’s really going on and it ain’t about bond buying:

    An excerpt:
    “For liberals, the chief concern for thirty-five years now has been about the unfairness of the economy—virtual wage stagnation for most workers, huge gains for the top 1 percent, and the lax regulatory and enforcement regimes that have permitted those outcomes, along with slow recovery from the most recent recession.
    For conservatives, for about the same period of time, the main worry has been what is broadly called “culture,” by which we really mean the anger and resentment felt by older white Americans about the fact that the country is no longer “theirs” and that their former status and authority no longer seem what they once were. This rubric takes in a number of issues—immigration, especially illegal immigration; same-sex marriage; a black president in the White House; all the things that conservatives bundle under the reviled label “political correctness.” In their minds it is some sort of taint that has infected every institution in this once-great nation and is destroying it daily before their eyes.”

    For more on racism, se this SNL skit.

    1. Wage stagnation has nothing to do with lax regulatory and enforcement regimes. A fundamental and apparently permanent de-coupling of productivity improvements and wage increases occurred in the early 1970s. Four years of Carter, eight years of Clinton and almost eight years of Obama have done nothing to change that. In addition, income inequality has been on the rise in countries all over the world. What regulatory and enforcement regime controls the entire world? The Illuminati? Finally, it’s interesting to see how worried the front – runner for the Democratic Party feels about the 1%. After she claimed impoverishment on leaving office in 2000 she and her husband used their influence from various political positions to power stuff money into their pockets. In one eight year period (2007 – 2014) the Clintons’ earned $141M while adding no new jobs (or nearly no new jobs) to the economy. Claiming to be worried about inordinate wealth accruing to the top 1% while supporting Hillary for president would be funny if it wasn’t so sad.

      The metaphorical head trauma which causes liberals to equate a disdain for political correctness with racism is equally idiotic. How did Clarence Thomas fare at the hands of liberals during his Supreme Court nomination? Unabridged joy for another African-American nominee to the high court? How do liberals assess two men with a shared lifetime of accused sexual assault – Bill Clinton and Bill Cosby? One is scorned while the other has money thrown in his direction every time he gives a speech. And when a highly educated and well respected economist said, “I have never understood why it is “greed” to want to keep the money you have earned but not greed to want to take somebody else’s money.” how do you think the liberals reacted? Was Sarah Palin heralded as a pioneer by the liberals? Did they even have the minimal decency to leave her daughter and handicapped child out of their spewing invective? Of course not.

      Liberals live in some fantasy land where they are the kind, generous protectors of fairness and equality. They look in their magic mirror and see nothing but good – even while members of Bill Clinton’s campaign called the complaints of the women he assaulted “bimbo eruptions”.

      As an aside, Trump is far from being conservative. He’s simply willing to buck the establishment on both sides of the political spectrum and call bull**** on large bags of crap like that nonsense from the New York Times Review of Books.

      By the way, did Charlie Evers (brother of Medgar Evers) just come out in support of Trump? Wasn’t Charlie the first mayor of a Mississippi town since reconstruction? Just another angry white guy I guess.

      1. LarrytheG Avatar

        re: ” . Claiming to be worried about inordinate wealth accruing to the top 1% while supporting Hillary for president would be funny if it wasn’t so sad.”


        is it somehow wrong to become rich and at the same time worry about the 1%?

        I’m pretty sure many of the folks who have become the 1% KNOW that not everyone got the same bite at that apple and that fundamentally an economy of the 1% and large numbers of at the bottom is not economically healthy … that a middle class is a defining characteristic of modern OECD economies contrasted with 3rd world economies.

        Don makes it sound like you can’t politically stand on supporting an economy with a middle class and yourself being well off.

        where did he get that kind of reasoning to start with?

        advocating equal opportunity is NOT advocating equal outcomes no matter how many times the would-be “anti-liberals” blather that idiotic foolishness.

        here’s the issue – is it the role of government to try to assure equal OPPORTUNITY?

        give it a thought before blurting out the knee jerk.

        what is the expenditure of tax dollars on education if not to pursue that goal?

        all the folks who want non-public K-12 – how about non-pubic higher ED?

        that okay too?

        no tax dollars for k-12 nor higher ed. how about that as getting govt out of the “do-gooder” business?

        batter up… let’s hear it from the Conservatives in BR…

  35. LarrytheG Avatar

    Reed – where in what you wrote is different than what I said?

    the Founding Fathers did NOT advocate for violent overthrow but instead following the tenets of the Constitution – one man – one vote to elect governance and to abide by the election – to send elected reps to Congress and the POTUS and to then select a SCOTUS that also would decide by majority vote.

    your “lecture” is amusing … as well as ignoring the simple facts but oh well.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Larry –

      People write books about your bumper stickers, but I have not the time.

      In lieu thereof, you might start educating yourself at:

      But watch out, Walter Annenberg was a Republican!

  36. LarrytheG Avatar

    re: ” By Jove – Larry gets it! Trump’s supporters don’t care about the details of Trump’s plan.
    Trump’s supporters are poking a stick in the eye of the political establishment.

    Good for them.”

    well , despite what 10 GOP debates most significant issues have not had serious questions and substantiative answers – with candidates preferring instead to talk about how bad the current POTUS is , killing Obama care on Day 1 (like they can outlaw legislation), genitalia , and other ideological breast-beating idiocy.

    Question to Trump/Cruz: 12 million people now have insurance with Obamacare – would you take away that insurance and if so what would you replace it with?

    Trump/Cruz – we’re still working on that and will get back but right now it will be Patient-Centered Free Market sold across state lines and no one can sue for malpractice but freeloaders will be dumped.

    same question to Clinton – we’d not do that – we’d address needed changes instead but folks who have insurance would keep it.

    Question to Trump/Cruz – 60 million people get Medicare – would you kill the current system and replace it with a premium support plan?

    Trump/Cruz – we’d not lay a hand on a single hair of Medicare – until we tell you after the election.

    Same question to Clinton – we’d not change Medicare except to make it more means-tested and require higher income taxpayers to also pay into it.

    Question to Trump/Cruz – You’ve said you would deport 12 million people – would you do that and how would you do it.

    Trump/cruz – we’re still figuring out how that would work and let you know later but we’ll only have the “best” plan you can rest assured.

    Same Question to Clinton – we would not do that.

    Question to Trump/Cruz – you’ve said you would kill the Iran Treaty on day 1 – correct?

    Trump/Cruz – yep… on day 1

    same question to Clinton – we’d continue to work toward better relationships and outcomes in the Middle East

    Question to Trump/Cruz – would you put boots on the ground in the Middle East ?

    Trump/Cruz let us get back to you on that after the election when we figure out the difference between Sunni and Shia.

    same question to Clinton – no… we’re not going to sacrifice more of our young people for nothing at all to show for it.

    at some point – Trump/Cruz are going to have to answer real questions and stop their idiotic ideological breast-beating.

  37. Darrell Avatar

    Look, to build a wall on the border, all Trump has to do is develop the line with a bunch of Trump towers and a few amenities. Then he sells them to rich Chinese in exchange for a few million green cards. If an illegal or a load of drugs gets through a Chinese apartment, that owner gets deported back to China and the apartment gets resold. Trump gets a reasonable cut and the rest goes into the Treasury. There’s more than one way to build a wall.

  38. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    With regard to the question: “Are the End of Times Upon Us?”

    Please read “Bret Stephen’s: The return of the 1930s’, Donald Trumps demagoguery my be the foretaste of what’s to come.”

    This opinion piece written by Bred Stephens is found in today’s (March 8th Wall Street Journal, Opinion section)

  39. Andrew Roesell Avatar
    Andrew Roesell

    And here is Michael Lind’s response, in Politico, to the “ad Hitlerum” arguments. Sincerely, Andrew

  40. Ya know what’s fun about this blog? Jim tosses out a piece of fresh meat just before the weekend; then we chew on it and swallow it and regurgitate it and kick it down the road and I don’t know what-all, and by the end of the weekend we’ve got Andrew and Reed and Larry fulminating at 2 a.m. and Darrell reporting for The Onion and we even dragged Peter out of his lair and, and … — my golly, this is so much more amusing than watching the results of the Michigan Primary roll in! Alright everyone, it’s a new day, time to pay attention and get serious and read Jim’s latest — but thanks for an enjoyable weekend’s diversion on t.a., Trump.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Larry and Andrew are gettin’ away with murder. And I ain’t even finished yet.

  41. CrazyJD Avatar


    Do you think it possible to write your thoughts in coherent paragraphs without making us all scroll endlessly down the page for each sentence. Thank you.

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