Federal Reserve

Mr. Magoo And Military-Industrial-Surveillance Complex

By David Stockman  |  July 11, 2019

There’s not a lot of folks still around with first-hand memories of Mr. Magoo or the general 1950s. It’s a shame it’s passing into the shadows.

Of course, we almost immediately ignored the most important message to come from that era. It’s Ike’s farewell admonition to “guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex.”

An Age Of Misplaced Power

Indeed, in the 21st century, Imperial Washington is all about “misplaced power.” It’s only grown weightier with the advent of the “information age.” And the addition of “surveillance” to that threatening complex.

“Liberties” and “democratic processes” are near extinction.

And it’s easy to comprehend how the Warfare State threatens those things. I mean, Look outside your door. Even local police nowadays roll with field armor, rockets, and tanks.

But there’s a little-quoted passage from that famous Eisenhower speech the eggheads and experts championed by the eminently empirical Left are advantaged to hide:

The prospect of domination of the nation’s scholars by Federal employment, project allocation, and the power of money is ever present and is gravely to be regarded.

Yet in holding scientific discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific-technological elite.

The 21st- Century Mr. Magoo 

Now, sure, we can tag the Environmental Protection Agency, tussle over James Hansen and NASA. And even talk about climate-change “hockey sticks.”

Meanwhile, we’ve let a less understood segment of “scientific-technological elite” take de facto control of our financial system and our economy.

And it makes for a catastrophe equal in qualitative effect to anything the national security industry can unleash on us.

However, even those who do remember the ’50s might struggle to recall Mr. Magoo. He was the animated millionaire-retiree voiced by Jim Backus. Backus was equally famed for playing Thurston Howell III on “Gilligan’s Island.”

Mr. Magoo’s refused to admit his extreme near-sightedness and oppositional-defiant. And it got him into cartoon-tragic fixes often. However, those same afflictions helped Mr. Magoo emerge from those fixes unscathed, unaware, and undaunted. Thus, the comedy.

Jerome Powell's statements about money markets

Mr. Magoo describes the behavior of the Chair of Federal Reserve in the modern era pretty well. Going back to Alan Greenspan, his successor Benjamin Bernanke, and Janet Yellen too.

But, Jerome Powell is in his own class of  tragicomic blindness. Sven Henrich, the founder of NorthmanTrader, tweeted it this way:

The evolution of the Fed put:
Bernanke: Save markets
Yellen: Don’t upset markets
Powell: I’m the market’s bitch

The Bubble Is About To Burst

The Donald’s man has no clue about the real condition of either Wall Street or Main Street. That’s reflected in his peripatetic performance as markets get volatile and macro data get wonky…

Monetary central planners, principally the Fed, have reached the end of the Keynesian road. And it just happens to be on Powell’s watch.

Of course, it’s fostered a massive bubble. And it refuses to acknowledge it. It drones on even as we approach the illusions of “full employment” and “stable prices.” And its efforts to micromanage the macroeconomy only creates more internal pressures.

Main Street is a mess. Wall Street is about to be.

What’s next is the third crashing bubble in the last 20 years.

One Way Out…

Desperate times call for… “common sense” measures.

And these are desperate times… Markets are corrupted by monetary central planning. They’re confused. And the road back is going to be treacherous.

We’re looking at a major re-pricing for all financial assets. And thousand-point intraday or day-to-day swings are part of that equation. Those 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 survive and thrive amid the coming chaos. It’s called “The Stockman Model.”

All we’re after is a little stability, perhaps a chance to pocket a windfall when opportunity presents…

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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