Davos – The Arrogance of Officialdom
In 55BC, Cicero stood before the Senate of Rome and warned of its demise because of a trade deficit importing spices and silk from China. He spoke of the “arrogance of officialdom” and the more I studied the going ons throughout history, the more it hit me – history repeats because the passions of man never change. It is simply a Shakespeare’s play where the plot remain and story remain the same but only the actors change over the course of centuries.
The gathering at Davos located in the canton of Graubünden, Switzerland where those in power ski at taxpayer’s expense and discuss maintaining their power over coffee and champagne, illustrates this arrogance. of officialdom, This is supposed to be the World Economic Forum, but it is all about them manipulating society and the great unwashed – us. The tremendous arrogance of socialism is that those in power see the productive forces of the people as their asset to play with and manipulate to their benefit. There is no hint that just perhaps the free markets cannot be manipulated – God forbid such a thought. The common theme is simple. All of these groups do not really believe in free trade or a free market economy for such ideas defeat these ski trips since the state would be passive, rather than trying to control the world by active regulatory measures. The press is on-board as well for when the US Congress passes less laws from one year to the next they call it the “do nothing Congress” as if passing new regulations is somehow advancement since they obviously never make mistakes.
Then there are those who are so arrogant and misguided that they are incapable of admitting a mistake ever, go to try to argue for more manipulation of society assuming once again we are just no different than cows and chickens to be herded to comply with their dreams or fears. At the top of the agenda will be the warming of the planet to be discussed by none other than the delusional Al Gore, the former US vice-president, who has described climate change as “the biggest challenge our civilisation faces”. He is joined by another top expert on such science Pharrell Williams, the pop star, who reached No 1 on the charts with Happy. These people never have considered there are cycles to anything or how did Ice Ages and Warming periods happen before automobiles in the 1930s? Between lawyers, pop stars and academics, one must wonder if we have any future at all.
Then we have the European Central Bank which announced its new stimulus program on Thursday, saying it would purchase nearly $1.5 trillion of bonds in the coming months. But the policy makers and specialists at Davos were divided over the effect of even that program. This division among OPINION illustrates our problem. Where do these people get off assuming they have the ability and rightto manipulate the world?
There are essentially three camps at loggerheads over the who QE stimulus idea. The first is typical of the German politicians and bankers, who have little faith in central bank manipulations. This camp’s overwhelming emphasis remains on policy measures that are referred to as “structural reforms” yet even they are clueless as to what reforms are even necessary without returning to Laissez-faire (an economic system in which transactions between private parties are free from intrusive government restrictions, tariffs, and subsidies, with only enough regulations to protect property rights).
Clearly, major structural overhauls are needed as the European Socialism has seriously reduced the standard of living throughout Europe. The EU has piled on top even more restrictive regulation when in fact Europe needs to strip back the regulations that European businesses often face. The cost of a worker in Europe runs at nearly twice that in the United States, but the added cost goes toward taxes – not greater individual income. Such policies need to be changed simply to make the Continent more competitive and, thus, more prosperous. The ECB policy is to reduce the value of the Euro to increase productivity rather than reform.
Those who may grudgingly support the ECB stimulus in the hope that it will buy time for governments to enact structural overhauls, keep praying that politicians will push aside their own personal self-interests for once and focus of the interests of the people. Such wishful thinking is follish since history demonstrates that only takes place when the system collapses. People who do hold to this view are also worried that looser monetary policy may work against structural measures. The European Central Bank’s stimulus gives they grasp diminishes any incentive for governments to reform. Lowering the value of the Euro artificially devalues the income of labor without facing the voters.
The second camp in this debate, which includes the most dangerous woman alive, Christine Lagarde of the International Monetary Fund, is joined by her groupies among many top bankers and investors, who delusionally see themselves as the correct mainstream viewpoint. It supports structural changes but also sees important roles for monetary and fiscal policies.
The third camp, is promoted by Lawrence H. Summers, now a professor at Harvard and a former United States Treasury secretary who instigated the negative interest rate strategy. Summers agrees that a range of various policies is necessary, however, he asserts that a heavy emphasis on structural changescould undermine other efforts to generate growth. “A lot of structural reforms are on the supply side, and a lot of the problems are on the demand side,”Mr. Summers has stated just on Thursday. Summers remains the mouth-piece for New York Bankers.
Structural reforms are way overdue. The whole idea of Euroland was to force a single policy upon all member states. However, there was no real structural reform, just more regulation piled upon more regulation. Labor costs in Europe are simply twice as much as in America. Without major structural reforms to taxation, Europe will continue its slow death as the world economy migrates to Asia. Christopher Columbus set sail across the Atlantic because he was trying to find a short cut to India which was the Financial Capital of the world. Europe was the bottom-feeder and this is the role it has chosen once again. It is over-regulated and destroying its own economy just as the Byzantine Empire died from over-regulation.
Police Reply
COMMENT: Mr. Armstrong,
First, I have been reading your blog for quite some time and appreciate your service and perspective. I really appreciate your historical perspective on many issues and consider myself a fan.
The recent comment regarding police pensions being paid for by seizures are inflammatory and not true in most cases across the country. The only way it might be true would be for those agencies that self-fund their pensions through the local governing body typically found in very large cities, and I suspect the only way that could occur would be by supplanting, which is usually illegal as well. Since the majority in law enforcement work for mid-size and smaller jurisdictions, that vast majority pay into a fund usually at the state level similar to teachers. The pensions I describe are also not usually as generous as some I have seen from very large cities as well.
I do agree with you that the seizure laws in this country are being abused and the temptation is certainly there for law enforcement to abuse them to buy “stuff” they could not otherwise get. Personally I find most a Constitutional violation because they tend to lack any due process before a seizure, and as you have described in the past, may resemble more of a theft in some cases. What disturbs me the most is when I see agencies seizing property/money and no criminal charge/arrest related to drugs, which is what the seizure laws originally were focused on. Some drug task forces though have been largely funded with the seizures they obtain. Though I think it is a bad idea, on the surface it seems to make sense, but I do think you could make the argument that those individuals’ pensions are funded by seizures since some wouldn’t have a job without them but they certainly are not representative of law enforcement as a whole.
There are many other issues, things that are broken, and many things wrong with our system and government we could discuss, but I’m doubtful this email will even reach you and suspect you are inundated with them so I’ll stop here. Stay well and don’t go quietly into that good night.
Sincerely,
JC
REPLY: In all fairness, my greatest mistake in write is sometime I do make statement TOO GENERAL. To be accurate, pension funding is typically accumulative the higher you go up the government chain. At the Federal level, it is just unfunded. Moving down the chain, it varies. However, the seizure are going to fund liabilities (pensions) that are not exactly direct to afford the police deniability today. Those already retired did NOT engage in this new wild-west atmosphere os robbing the people. This has accelerated within just the last 5 years.
The money goes into the general budget so the police today, which have been converted to IRS agents on wheels, have deniability that what they seize goes directly into their pensions. It is also political pensions. The State of New Jersey, the worst in property taxes, fines, and all sorts of penalties, is under-funded on state pensions by $50 billion. Most of that is state workers since the police are at the municipality level, with a small force of State Troopers. This varies from town to town. I drove out for Starbucks. Within a 3 mile course, there were three police cars with three people pulled over.
More people are leaving New Jersey than just about any other state because of insane taxes. If you overpay money into the state income tax, they hit you with a penalty because they have to refund you. On a $750 under-payment, they hit you with a 20% penalty and then charge you 26.5% interest on top that includes the penalty. If ANY business did this they would be changed with consumer fraud.
I have some personal friends who were police. Those who today are police cannot hold a candle to their character or attitude. Getting pulled over today is adangerous encounter for you have no idea what they will do and constitutional rights mean absolutely nothing – they are a joke. I have been pulled over TWICEon my way to work at roadblocks during the morning rush hour. They pull EVERYcar over asking for “papers please”. If you do not have all your documents, there is the line for tickets. If you have them, proceed. I had my papers so no ticket. But it is TOTALLY illegal to pull every car over to check your documents. I cannot image what assets are being confiscated. More than a thousand civil asset seizures in Washington, DC were for less than $20. This is NOT the land of the free any more. This is a joke.
To those retired, you were not part of this new trend. To those now active, remember you are American FIRST, and you should realize they are exploiting you only for money. I ran a piece months before the Ukrainian Revolution began. What started it, was the wholesale corruption of the police. When friends from Ukraine would come visit me here in the States, at the first sight of a police officer they would cringe. Police were seen as mafia in Ukraine and that is what started the revolution. They were very much in your face.