Authority or Liberty?

By David Stockman  |  November 27, 2018

The real division is not between conservatives and revolutionaries but between authoritarians and libertarians.

– George Orwell, in a 1948 note to Malcolm Muggeridge included in The Lost Orwell: Being a Supplement to The Complete Works of George Orwell (2007)

We know the Donald is a semi-literate bully who never got (and read) the memo on racial comity, to say nothing of political correctness.

Imperial Washington’s preening, self-important ruling class “tsk-tsks” the kind of gutter-talk the Tweeter-in-Chief’s made the centerpiece of his comms strategy.

This shaming chorus that’s sprung up from all corners of the Swamp gives hypocrisy a bad name. Of course, they prefer their brand of respectable authoritarianism, tinged with neoliberal lust for “the good and the right”…

Still, the Donald and the GOP do indeed deserve everlasting ignominy. That’s for literally shit-canning fiscal rectitude. Together, they’ve abandoned the “conservative” party’s fundamental reason for being: watch-dogging the U.S. Treasury.

Today, they’re all in for immigrant-bashing, border hysteria, and crude nativism. And they’ve turned the enormous powers of the state – including the U.S. military – against a pathetic gaggle of asylum-seeking migrants.

But the Donald continues to demagogue a non-problem for his MAGA legions. So, we’ve muscled up the state’s internal control apparatus. And we’ve wasted tens of billions more on Mexican walls, border enforcement armies, and deportation dragnets.

This is no way to shackle Leviathan.

The fact is, five pro-liberty and pro-free market steps would make the whole trumped up border “invasion” disappear in a heartbeat.

This is what I’m talking about:

  • Legalizing all drugs and turning the distribution job over to nonviolent operators like, say, Phillip Morris;
  • Distributing “guest worker” permits at the 48 border control stations and regularly renewing them upon demonstration of gainful employment, in the form of a W-2 form;
  • Denying any and all forms of federal welfare to non-citizens;
  • Providing guest workers a 10-year route to citizenship if they hold a steady job, don’t break the criminal law (that means speeding tickets and stuff are OK), and pay an admission fee based on a modest percentage of their cumulative W-2 wages; and
  • Permitting all so-called illegals already here to obtain a guest worker permit at the nearest federal courthouse and allowing them to embark on a 10-year route to citizenship if they hold a job, observe the law, pay the admission fee, and also pa a reasonable fine for their original misdemeanor, crossing the border illegally.

This would end the drug-cartel-related violence at the border once and for all.

And taking all five steps would bring America what it desperately needs: more strong backs to supplement a declining pool of native-born workers and to help fund the crushing Welfare State burden implicit in the tsunami of Baby Boom retirements.

That’s the only way we’ll be able to handle a doubling of the benefit rolls from 55 million to 100 million over the next several decades.

To put it crudely, America desperately needs more young “tax mules.”

Notes on “Normalization”

The talk on Bubblevision today is all about the Federal Reserve and whether it’s moved “too far, too fast.” It appears that Wall Street and the Donald are now as one in their desire for more “easy money.”

At noon tomorrow, Fed Chair Jerome Powell will give a talk at The Economic Club of New York on “The Federal Reserve’s Framework for Monitoring Financial Stability.” But he’s unlikely to make the kind of news Bubblevision is hoping for.

It’ll be more of what Fed Vice Chair Richard Clarida offered this morning: “Monetary policy at this stage of the economic expansion should be aimed at sustaining growth and maximum employment at levels consistent with our inflation objectives.”

In other words, it’s “normalization” now, “normalization” tomorrow, “normalization” forever…

We may see some fits of short-term buying that create things like 900-point intraday swings, which can be frightening… for “buy and hold” investors.

I have a different approach, one that combines strategy and tactics into a plan flexible enough for you to prosper amid the Mother of All Yield Shocks.

Our “survive and thrive” plan includes specific asset types and allocations by percentage. But it’s built to suit your approach to the market.

And we will include tactical notes on particular vehicles that will help us accomplish our twin goals of protecting wealth and profiting opportunistically.

Take a look – before the chaos of the Mother of All Yield Shocks – at The Stockman Letter and “The Stockman Model.”

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David Stockman

David Stockman is the ultimate Washington insider turned iconoclast. He began his career in Washington as a young man and quickly rose through the ranks of the Republican Party to become the Director of the Office of Management and Budget under President Ronald Reagan. After leaving the White House, Stockman had a 20-year career on Wall Street.MORE FROM AUTHOR