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If I’m known at all to RichardCYoung.com readers, I’m known as the curmudgeonly foreign policy guy, I imagine. I have little respect and less faith in the ministrations of the Washington elite, which is in part why I stopped trying to break into it and decided to open a wine bar instead. As my final column here at RCY, I thought I’d turn my gimlet eye on the economic system that ‘brung me here: capitalism. Below, a few takeaways from dealing with banks, construction firms, real estate people, and booze and food purveyors:
Literally no one has any idea what he is doing.
A former intern at the Cato Institute was once asked to review three books by an esteemed historian of the Progressive Era. He returned to his master’s office with a washed-out, battle shocked look on his face. Quizzed by his boss, he could only mumble: “I thought there were procedures in place to prevent this sort of thing from happening.” The Esteemed Historian, it turned out, was a huckster
Worth remembering in all endeavors in life: none of us really has a clue. The signal phrase that sticks in my mind from a 9 month build-out of a decrepit space in a gentrifying neighborhood: “This is construction. Nothing is accurate.”
People think that in professions governed by engineers, architects, regulators charged with public safety, licensed tradespeople, et al, that there are rules. That the rules are followed. That violators of the rules are discovered, punished, and their work corrected.
Nothing could be further from the truth. I have come to firmly believe that it is by the grace of God that the nuclear arsenal of the United States or some other country hasn’t been launched at itself yet. Somehow, but without any real defense, humans rarely produce a Rana Plaza-level disaster. Thank God.
Government is even worse.
In Washington, DC, which in fairness is not a regular government, the legislators occasionally get captivated by a crazy idea, meet no one who asks them to think it through or run the numbers properly, and pass legislation. So it was with the District’s paid-leave bill, which taxes DC employers .62 percent of payroll to pay mostly Maryland and Virginia residents for 8 weeks per year of family or other leave.
In order to do so, the District is setting up a soon-to-be-monstrous bureaucracy to administer the program. In an effort to surrender, the DC business community agreed to the terms, but insisted employers administer the program themselves. Not enough for the city council’s most liberal members, whom even the liberal Washington Post editorial board condemned as engaging in “pure fiscal folly.”
Liberal Councilmembers like Elissa Silverman and David Grosso insist that the .62 percent payroll tax will pay for the soon-to-be-monstrous bureaucracy and the benefits themselves. If they’re taking 5 year bets on that claim, I’ll take even odds with everything I have.
The American Economy Seems Over-Financialized.
I’ve dealt a lot with banks, hard money people, and others, and it seems to me the only people doing *very* well in a DC that’s booming are holders of large amounts of capital. As people like to do, I looked for people thinking along the lines of my views. In a lecture, and later a book chapter, Harvard professor Benjamin M. Friedman wondered, in part:
Approximately a quarter of the graduates at my university go into the financial sector. Arguably, both at my university and at others too, those who choose to do so include many of our brightest, most energetic and most highly motivated young people. They could be doing something else.
He made clear why he was wondering along these lines:
As is by now well known, the share of total profits in the U.S. economy earned by firms in the economy’s financial sector rose from ten percent, on average from the 1950s through the 1980s, to above twenty percent in the 1990s, and then above thirty percent in the 2000s until the crisis.
I’m no economist, but I worry about this. I worry whether the marginal social value of the 180-IQ Harvard grad coming up with a tricky new algorithm that becomes the new Credit Default Swap, or some such, is worth the cost. The institutions that structure the incentives of the bright young undergraduate seem to me to veer ineffably toward the financial sector, and I worry that those incentives might not be aligned with the greatest social value of those brilliant people’s faculties.
Postscript: This is my last column at RichardCYoung.com. I would like to thank, from the bottom of my heart, Debbie Young, E.J. and Becky Smith, and most of all Dick Young for encouraging me to write this column. I owe them all, but particularly Dick, a tremendous debt of gratitude. It was Dick who decided that mine was a voice that should continue to be heard, and that decision has meant a tremendous amount to me and my family as we got our business off the ground. Nothing could have been more valuable, and nothing has been more appreciated. We look forward to welcoming the Youngs, the Smiths, and even ol’ Tim Jones to our place in DC before too long. Until then, thank you for reading.
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 In his book Over-the-Counter Natural Cures, Shane Ellison, M.S. informs readers,
If high blood pressure was dangerous, then lowering it with hypertension drugs would increase lifespan. Yet, I couldn’t find a single clinical trial showing that hypertension medications increased lifespan among users of these drugs when compared with nonusers. In fact, many times, low blood pressure decreased it. It is completely natural for the first number (systolic) to be 100 plus our age.” Before you take on risky meds, you’ll want to know about the natural occurring medicine that can bust clots, control blood pressure, and at the same time strengthen the heart.
Unlike cardiovascular drugs, hawthorn doesn’t “melt” the cardiovascular system and isn’t toxic, which means it won’t cause any bad adverse effects.
In chapter four, Natural Cures explains that all of the benefits from hawthorn translate into the clinically significant prevention of chronic cardiovascular and heart conditions. Hawthorn can successfully be used to treat heart failure hypertension, angina, excess blood clotting, and cardiac arrhythmias.
I take a daily formula of hawthorn, garlic, grape seed extract and magnesium citrate (spray) as part of my ongoing heart health program.
Hypertension | High Blood Pressure | Natural Hypertension Cure
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At age 86, Thomas Sowell is retiring from writing his weekly syndicated column. In 2011, NRO’s Jay Nordlinger interviewed Dr. Sowell at Stanford University.
The coming of Barack Obama means that we are in a Sowell moment — a moment ripe for what he has to offer. He (Sowell) is a conservative who specializes in reminding people of the fundamental (as suggested by the title of that book, “Basic Economics”). What is a free economy, and what is an unfree one? What does the Constitution say, and why is this document important? In a recent conversation, Sowell said that we are seeing “the slow but systematic dismantling of the Constitution.” And “the idea that ‘We the People’ are self-governing is being eroded at every opportunity.” Society-changing bills are rushed and rammed through Congress, before the public knows what’s in them — before even those voting on the bills know what’s in them. “Czars” dot the executive branch, issuing edicts. These power-wielders are barely known to us, and barely accountable.
Thomas Sowell, who got his third Ph.D (economics) from the University of Chicago, explains, “I was a Marxist when I went to the University of Chicago, and I was still a Marxist after I took Milton Friedman’s course. … “But just one summer as an economics intern in Washington got rid of all of that.” Jay Nordlinger continues:
Sowell worked in the Labor Department, in the Wage and Hour Division. He was interested in whether minimum wages helped the poor by raising their pay or hurt them by denying them jobs. He found that the personnel around him were interested in other things: namely, the preservation of their own jobs, and the perpetuation of government programs. “Government has its own incentives,” he says. He was on his way as a conservative and free-marketeer.
Thomas Sowell is Back Again to Discuss His Book Wealth, Poverty, and Politics
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In the year between July 2015 and 2016, Illinois lost 114,000 people in net migration. According to analysis by the Illinois Policy Institute, the exodus of people from Illinois has accelerated since the state increased taxes to 5% for individuals and 9.5% for corporations in 2011.
One of the harshest effects of the emigration from Illinois is those who are leaving are not only greater in numbers than those replacing them, but also wealthier. The Wall Street Journal writes:
The numbers are especially worrisome for the state’s tax base because the average person moving out of the state earns some $20,000 more than the average person moving in. According to IRS data for tax year 2014 (filed in 2015), the average income of the taxpayer leaving Illinois was $76,824 while the average income of the new arrival was $56,689.
Of course, part of the reason people are fleeing Illinois could also be the rampant violence in Chicago and other areas, which I have written about here.
Why Are People Leaving Illinois?
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Over four decades, Dick and I have watched many, if not all, Star Wars episodes with our five grandchildren. But the heady experience of watching George Lucas’s first episode of the series (later retitled) — Star Wars: Episode IV – A New Hope — when Matt was seven and Becky five will be long remembered. Writing in TIME Magazine, Eliana Dockterman discusses the force Princess Leia Organa, played by the late Carrie Fisher, had on the galaxy.
Carrie Fisher was a witty memoirist, a sardonic comedian and a blunt interviewee. But most people will remember her as a princess. And with good reason: her Princess Leia in Star Wars will always hold a place in film history as the first kickass princess.
She took the stage, like the princesses that preceded her, as a damsel in distress. In 1977’s Star Wars Episode IV — A New Hope, Darth Vader kidnaps her, and she must await a rescue mission led by a love-struck Luke Skywalker and a reluctant Han Solo. As it usually goes in the movies, she falls for one of her rescuers (Han, the rapscallion, not Luke, her secret twin). But she soon was ordering them around—down the garbage shoot, through space, toward danger. (Fisher who, among her many other talents, was a reliable script fixer in Hollywood notably helped director George Lucas give Leia much-needed dimension.)
Leia grew into something wholly new. She got her hands on a blaster and fired it as well as anybody else. She led troops on Hoth, like Washington over the Delaware. She was a talented welder, patching up Rebel starships in her down time. Her outfits—with one ignominious, gilded exception—rendered her not so much a sex object as an action hero. Her flowy robes and unisex battle-ready gear were more realistic than the leather and spandex of a character like Black Widow or the quasi-bathing suit of a Wonder Woman. . . .
By playing Leia the way she did and by speaking openly about the troubled trope, Fisher upended notions of what a princess could or should be. Studios began to figure out that there could be other types of female protagonists.
Read more here.
Carrie Fisher’s 5 Best On-Screen Moments
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I have regularly explained, in my monthly investment strategy reports that the U.S. economy has been on the last legs of an economic recovery for many months. The single reason that the historically weak recovery lasted as long as it did was a robbing of Peter to pay Paul, a distorted interest rate structure created by the Fed. Now along comes Donald Trump to give Americans some hope for the future. I am an independent and not aligned with either of America’s major political parties. I am a strong proponent of “The Swiss Way” of decentralized government based on the principles of powerful states’ (cantons in Switzerland) rights, a weak office of the chief executive, and little power held by the federal court system. In the bargain, “The Swiss Way” does not provide for a standing army. (For that matter, nor does the U.S. Constitution.)
I am a completely unbiased analyst of our government process and the individuals charged with making the critical decisions that govern the day-to-day workings of the American government. In my analysis, there can be only a single two-part reason for the truly remarkable swing in economic momentum exhibited in the U.S. since the presidential election. Americans were turned off and scared by a potential presidential victory for Hillary Clinton and viewed her as both a national security risk and a crook. On the other hand, Donald Trump had caught the mood in America of anti-radical Muslim immigration, anti-foreign adventurism, anti-public union/failing schools, and anti-over regulation and high taxes.
So yes, Donald Trump is to be given all the credit for America’s stunning snap-back in consumer confidence. And Trump is more than happy to take all the credit, as reported by MarketWatch.com.
The President-elect Donald Trump took to Twitter to thank himself.
Trump took credit for rising consumer confidence in an evening tweet — and said he’s the one who should be thanked.
“The U.S. Consumer Confidence Index for December surged nearly four points to 113.7, THE HIGHEST LEVEL IN MORE THAN 15 YEARS! Thanks Donald!” Trump said Tuesday.
The market has experienced a Trump bump since the mogul’s election on Nov. 8, reaching record highs and rallying ever since.
US consumer confidence hits 15 year high
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Are Israeli settlements on the West Bank and in East Jerusalem illegal? Pat Buchanan explains how the United States now finds itself in a tough position.
“President-elect Trump, thank you for your warm friendship and your clear-cut support of Israel,” gushed Bibi Netanyahu, after he berated John Kerry in a fashion that would once have resulted in a rupture of diplomatic relations.
Netanyahu accused Kerry of “colluding” in and “orchestrating” an anti-Israel, stab-in-the-back resolution in the Security Council, then lying about it.
Some of us can recall how Eisenhower ordered David Ben-Gurion to get his army out of Sinai in 1957, or face sanctions.
Ben-Gurion did as told. Had he and his ambassador castigated Secretary of State John Foster Dulles, as the Israelis dissed John Kerry, Ike would have called the U.S. ambassador home.
Ike’s threat of sanctions against Prime Minister Anthony Eden’s government, which had also invaded Egypt, brought Eden down.
While Kerry has been denounced for abstaining on the UN resolution calling Israeli settlements on the West Bank and in East Jerusalem illegal and an impediment to peace, this has been U.S. policy for years.
And Kerry’s warning in his Wednesday speech that at the end of this road of continuous settlement-building lies an Israel that is either a non-Jewish or a non-democratic state is scarcely anti-Semitic.
The two-state solution is almost surely dead. Netanyahu is not going to remove scores of thousands of Jewish settlers from Judea and Samaria to cede the land to a Palestinian state. After all, Bibi opposed Ariel Sharon’s removal of 8,000 Jewish settlers from Gaza.
How will all this impact the new Trump administration?
Having tweeted, “Stay strong Israel, January 20th is fast approaching,” and having named a militant Zionist as his ambassador, Trump is certain to tilt U.S. policy heavily toward Israel.
Britain and France, which voted for the resolution where the U.S. abstained, are going to go their separate way on the Israeli-Palestinian issue, as is the world.
Egypt, Jordan, and the Gulf Arabs will be pressured by their peoples and by the militant states of the region like Iran, to distance themselves from the Americans or face internal troubles.
Having America publicly reassert herself as Israel’s best friend, with “no daylight” between us, could have us ending up as Israel’s only friend—and Israel as our only friend in the Middle East.
Bibi’s Israel First policy must one day collide with America First.
Read more here.
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It was an unpredictable year in politics and markets. The world saw some things it had never witnessed before. Here’s a list of three of the most powerful events of 2016.
- Americans are done with the “establishment.” This was the greatest lesson of 2016, and it showed through in both parties. You could see the beginnings of discontent in 2008 with the election of “change” candidate, Barack Obama on the left, and the insurgent but ultimately failed campaign of Ron Paul on the right. But in 2016 the revolt against the establishment was full blown. Hillary Clinton by all accounts was a shoe-in for the Democratic nomination, but outsider socialist candidate Bernie Sanders gave Clinton serious competition. On the right, Donald Trump defied every expectation, beating over a dozen better prepared, more experienced establishment GOP candidates, and ultimately defeating the uber-establishment candidate, Hillary Clinton, to win the White House.
- Europeans are also done with the “establishment.” The Brexit vote, surprised markets and pundits of all stripes, but was fairly predictable if you were paying attention to the people on the ground. The Brits have had enough of the growth-killing, sovereignty-threatening edicts coming out of Brussels, and they showed their discontent with a vote to leave the EU.
- South America is a political Crazy Train: Maybe this isn’t new knowledge, but the impeachment of Dilma Rousseff, the prosecution of Cristina Fernandez de Kirchner, and the near chaos in the cities of Venezuela today showed the world that the southern hemisphere of the Americas is an unpredictable and volatile place. Keep an eye to the South in 2017 for further developments. The Venezuelan crisis is set to play out, things could become unstable in Cuba with the death of Fidel Castro, and new political tensions in once stable Colombia create potential volatility in the region.
This list is by no means exhaustive, but come back to Richardcyoung.com regularly (and sign up for the free weekly email) to keep up on the most important events happening in politics and markets.
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 Former CIA bin Laden chief Michael Scheuer explains that U.S foreign policy ought to consist much more in abstaining than doing.
The U.S. abstention on the UN Security Council’s resolution condemning Israel’s building of settlements in the West Bank was absolutely the right action, but it was taken for wrong, sophomoric, and really rather dastardly reasons.
The motivation for the abstention was not a clear view of genuine U.S. national security interests — which do, on this issue and many others, including UN membership, benefit from permanent abstention — but rather it came from Obama’s hatred for Israeli Prime Minister Netanyahu, the arrogant and colossal error that Netanyahu, the Republicans, and Israel First made in staging the former’s address to a joint session of Congress on the Iran deal; and Obama’s all-too-appropriate anger at Mr. Trump’s all-too-inappropriate intervention in his conduct of foreign policy. (NB: One must be careful here, as Mr. Trump, not being a dumb-head, certainly knew that the thin-skinned, arrogant Obama would press ahead and abstain. Could that be what Trump wanted when he spouted off?)
The point for Americans here is not that Israel is the bad guy and that the Palestinians are the good guys, or vice versa. The point is that neither party, nor their respective actions, make(s) a lick of difference to the republic’s genuine national security interests as long as the U.S. national government stays out of the affairs of of each. If Israel drives all the Palestinians from the West Bank and builds an only-for-Jews metropolis there, or if the Palestinians find a way to kill Israelis in numbers like those of the Palestinians killed by Israelis, it amounts to precisely nothing that impacts the life-and-death interests of America and nearly all of its citizenry. The exceptions being, of course, those elite Jewish-Americans who prefer the survival of Israel to the welfare and survival of their fellow countrymen, and, who, after all, are expendable citizens who pose nothing but a threat to the republic’s survival. They are worthy only of being ostracized.
The truth is that any chance of a two-state solution in the Israel-Palestine conflict is a decade dead, and only more violence and perhaps war will be forthcoming over the issue of what each side considers its and its faith’s territory. Why would the United States want to stay involved in the bloody business that will ensue as the two states are left to work out their own problems and fanaticism? If the rest of the world lines up on the side of the Israelis or that of the Palestinians, and want to play in this nearly 70-year old, cruel but childish war, let them do so and pay and bleed as America has done for far too long.
Again, Obama, his team of juvenile diplomats, their gangsterish mother hen Hillary Clinton, and now the ketchup-king John Kerry are a reprehensible lot, who for eight years have conducted themselves as if it is still the malodorous 1960s, acting as if they are noble, Che-like agents who are duty-bound to make penitent amends for the supposed sins of colonialism and imperialism, while forcibly imposing the far worse sins of globalism, which will require global fascism to maintain. These people are war-causing imbeciles who were Ivy-League educated (indoctrinated?) with ideas, aspirations, and modes of behavior that reward the violent; cannonize the deviant, libertine, anti-religious, non-white, and subversive; and seek to destroy all the West has created since Athens and the Roman republic were pups.
John Kerry’s slogan-filled speech on 28 December 2016 is a fine example of mindless U.S. interventionism, a policy that has long displayed a vast ignorance of how a world of nation-states must work. Kerry’s blithe dismissal of the argument that asserts Israel needs more settlements in Palestinian territory to strengthen its national security may be true. That, however, is not what the Israeli government believes, and, as it is that government that must manage Israel’s absolute right of self-defense. Israel’s cabinet would have to be a gang of morons to heed the interventionist words of the hapless Kerry or any other U.S. politician.
Again, the Obama administration’s ego-satisfying and vengeful abstention from voting on the UN Security Council resolution condemning Israeli settlements is a mark of its terminal ignorance about the proper America-centric goals of U.S. foreign policy. But, as noted, the abstention did produce a marvelous bastard of an offspring, one that gives Americans an opportunity to think about how in the world Israel’s nil worth as the republic’s ally can reasonably justify the pointless expenditure of tax dollars and human lives, an endless war with Islam, and unnecessary involvement in irrelevant overseas issues. All of these, at this point, can only distract the new administration from a campaign to repair the widespread economic, political, and social wreckage that is the signal and only achievement of Obama and his party.
On reflection, Americans — especially those who elected Mr. Trump — might well conclude, as did de Tocqueville, that for the good of themselves, their families, their republic, and their posterity, U.S. foreign policy from here on out ought to be one that “consists much more in abstaining than in doing.”
Read more here.
New calls for US to stop funding the United Nations
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