Tag: news

Authored by Ryan McMaken via The Mises Institute,

When the Soviet Union began its collapse in 1989, the world witnessed decentralization and secession on a scale not seen in Europe since the nineteenth century.

Over the next several years, puppet regimes and states-in-name-only broke away from Soviet domination and formed sovereign states. Some states which had completely ceased to exist—such as the Baltic states—declared independence and became states in the own right. In total, secession and decentralization in this era brought about more than twenty newly independent states.

This period served as an important reminder that human history is not, in fact, just a story of ever increasing state power and centralization.

Since then, however, the world has seen very few successful secession movements. A handful of new countries have come into being over the past twenty years, such as East Timor and South Sudan. But in spite of many efforts by separatists worldwide, there have been few changes to the lines on the maps.

This has certainly been the case in Europe and the Americas, where from Quebec to Scotland to Catalonia to Venice demands for independence have been met with trepidation and sometimes outright threats of violence from central governments.

Countries Don’t Like to Get Smaller

This is partly due to the fact state organizations—that is, the people who control them—have little motivation to give up the benefits conferred by bigness. States that control larger geographic areas and larger populations have greater ability to project their power and get more power.

Greater size means a larger frontier that can act as a physical buffer between the state’s enemies and the state’s economic core. Physical size is also helpful in terms of pursuing self-sufficiency in both energy production and agriculture. More land means greater potential for resource extraction and acreage devoted to food production. From the state’s perspective, these activities are good things because they can be taxed or expropriated.

In terms of population size, state control over larger populations means more human workers to tax, and, potentially, more highly productive urban workers. Historically at least, larger populations also provided personnel for military uses.

Thus, states that control large territories and populations are able to directly control larger and more diverse economies within their borders. This means more tax revenue, which in turn means greater military capability. 

Naturally, state organizations are not inclined to abandon these advantages lightly, even when secession movement express a desire that they do so.

Why States Sometimes Get Smaller

Sometimes, though, states are forced to contract in size and scope. This usually happens when the cost of maintaining the status quo becomes higher than the cost of allowing a region to gain autonomy.

Historically, the cost of maintaining unity is raised through military means. Examples of this tactic being successfully employed include the cases of the United States, the Republic of Ireland, and some of the successor states of Yugoslavia.

But secession and decentralization have also often been achieved through bloodless or near bloodless means. This was the case in Iceland and throughout most of the post-Iron Curtain states.

Bloodless secession movements, however, only occur when the parent state is weakened by larger events beyond the secession movement itself. Iceland, for example, seceded in 1944, when World War II ensured that Denmark was in no position to object. The post-Soviet states seceded when the Soviet state had been rendered impotent by decades of economic decline and (in 1991) a failed coup. Nor is it a coincidence that India gained independence from the United Kingdom in the years immediately following World War II. It is likely the UK could have held on to India through military means indefinitely, but this would have come at a very high cost to the British economy and standard of living.1

It is possible to envision largely “amicable” separations. The model for this is the separation of Canada, Australia, and New Zealand from the the United Kingdom. But even in these cases, British control over these Commonwealth states’ foreign policy was not totally abandoned until after World War II, when the British state had been weakened by depression and war. Moreover, the British state assumed that these newly independent states would remain highly reliable geopolitical and economic allies indefinitely. Thus, the geopolitical cost of separation was perceived to be low.

Mega-States Are the Ideal State

In cases where the seceding state is perceived to have differing cultural, economic, or geopolitical interests—which is true of the overwhelming majority of cases—the parent state is, all else being equal, likely to meet demands for secession with much hostility.

Although liberal ideology has diminished the perception among much of the world’s population that bigger is better, most government agents—who are by nature decidedly illiberal—see things differently. For them, the ideal state is most certainly a large state.

Those who delight in the generous application of state violence have noticed that it is not a coincidence the world’s most powerful states—e.g., the US, Russia, China—are those that control large populations, large economic centers, and large geographic areas with sizable frontiers. The combination of these three factors in various configuration ensures that existential threats to the regime are few and far between. Russia’s relatively small economy—only a fraction of the size of Germany’s economy—is mitigated by its enormous geographical frontiers. Its economy is nonetheless large enough to maintain a nuclear arsenal. China’s per capita wealth is quite small, but Chinese territory and the sheer size of its overall economy ensures protection from foreign attack. The US’s enormous economy and its huge ocean frontiers render it essentially immune to all existential threats other than large-scale nuclear war.

Large states such as these are limited only by the defensive capabilities of other states, and by the threat of domestic unrest and resistance. As Ludwig von Mises noted in Liberalism, states can take only as much power as their populations are willing to give it. There are limits to the public’s generosity.

Totalitarian States Require Bigness

This relationship between bigness and state power has been illustrated in the fact totalitarian states are virtually always large states.

In her book The Origins of Totalitarianism, Hannah Arendt examines a number of nontotalitarian dictatorships that sprang up in Europe before the Second World War. These included (among others) the Baltic states, Hungary, Portugal, and Romania. In many of these cases, Arendt contends the regimes attempted to turn themselves into totalitarian regimes, but failed. This was largely due to their lack of size:

Although [totalitarian ideology] had served well enough to organize the masses until the movement seized power, the absolute size of the country then forced the would-be totalitarian ruler of masses into the more familiar patterns of class or party dictatorship. The truth is that these countries simply did not control enough human material to allow for total domination and its inherent great losses in population. Without much hope for the conquest of more heavily populated territories, the tyrants in these small countries were forced into a certain old-fashioned moderation lest they lose whatever people they had to rule. This is also why Nazism, up to the outbreak of the war and its expansion over Europe, lagged so far behind its Russian counterpart in consistency and ruthlessness; even the German people were not numerous enough to allow for the full development of this newest form of government. Only if Germany had won the war would she have known a fully developed totalitarian rulership.

Arendt was not an economist, but had she been one, she might have noted that the necessity of size is so central to totalitarian regimes because they are so economically inefficient. Contrary to promises of machine-like efficiency made by advocates of ever more powerful states, totalitarian states are absurdly wasteful both in terms of capital and human life. The same is true—to varying extents—for all regimes. But as the most centrally-planned ones—whether totalitarian or not—quickly become economic basket cases, large size is necessary. A smaller state would quickly exhaust its capital and its population, and the regime would collapse. Size can provide the appearance of sustainability for longer.

Cultural factors cannot be ignored, however. Arendt concedes this process of collapse can be drawn out longer in societies that are more ideologically tolerant of it:

Conversely, the chances for totalitarian rule are frighteningly good in the lands of traditional Oriental despotism, in India and China…

That region’s relative tolerance for despotism is enabled by local ideologies that foster a “feeling of superfluousness,” which according to Arendt “has been prevalent for centuries in the contempt for the value of human life.”

Continued Movement toward Smaller States

Fortunately for humanity, the trend in the world today is toward smaller states. As numerous scholars have noted, the average number of states in the world is larger now than at any other time in recent centuries. Moreover, the rise of global trade has lessened the benefits of imperialism and expanding a state’s frontiers and population. As Mises observed, freedom in trade negates the need for a state to acquire more of the world’s wealth through militaristic or imperialistic methods. States often still seek economic “self-sufficiency,” but the cost of this is so high, and the benefits of open trade so enticing, that more states are willing to accept trade as a substitute for “lebensraum.” This can already be observed, as globalization has allowed small states to thrive, and small states have even acted to force greater discipline on large states through tax competition.

There are certainly exceptions to this. Some small states, such as North Korea, have maintained an economically isolationist and totalitarian stance—fueled both by internal paranoia and by real perennial threats issued by its enemies (especially the US), in the case of the latter. For the most part, however, the spread of markets (and promarket ideology) has raised the opportunity cost of militaristic expansion from the state’s perspective. If offered the chance to expand at low cost, though, virtually all regimes would take the opportunity in a heartbeat. And this is why we will likely continue to see regimes enthusiastically resist secession within their own borders. States don’t have many opportunities to expand their territories and populations. So they’re not about to sign off on secession lightly. Nevertheless, new economic realities, wars, and demographic shifts may certainly affect the equation in coming years. And then we may again see a redrawing of maps of a sort not seen since the end of the Cold War.

The Class 8 market, which experienced a slowdown for almost all of 2019, still looks to be in trouble. 

The ratio of retail sales to inventories in January for the heavy duty trucks remains elevated at the second highest in industry history. This makes production cuts the next obvious move for the industry. The inventory-to-sales numbers help present a picture of the health of the heavy-truck industry.

Sales of Class 8 trucks are expected to drop 33% this year compared to last year. Inventories remain high due to sluggish retail sales, despite “analysts” perpetually claiming that the industry is in good shape, just as they did throughout 2019 as orders fell all year long compared to 2018’s robust order numbers.

Kenny Vieth, ACT president and senior analyst, told FreightWaves that the number of trucks being built per day compared to the industry’s order backlog continues to paint the picture of an industry in “good shape”. 

Inventory of Class 8 trucks was up 3,400 units in January over December 2019, as production outpaced sales. The inventory-to-sales ratio in January was 3.9 months, second only to the 4.4 month print from April 2009. An ideal ratio is between 2 to 2.5 months. 

Companies like PACCAR Inc., who owns Peterbilt Motors and Kenworth Truck Co., are trying to address this issue. CEO Preston Feight said on the company’s January 28th conference call: “We make sure that what we’re building has a customer name on it, so we’ve been able to adjust our build rates to align with our orders.”

Vieth continued: “There comes a time in every cycle when the industry needs to start shedding inventory. High inventories were a positive contributor through most of 2018 and 2019. The total amount of inventory is going to be a headwind for production in 2020.”

The U.S. tractor market, which accounts for 60% of heavy-duty truck sales, saw its inventory-to-sales ratio spike to 3.1 months from 2.5 months.

Yet Vieth wants to continue focusing on the industry’s backlog whittling away. The backlog in the industry, caused by robust ordering in 2018, was blamed for dismal Class 8 numbers throughout 2019. 

Recall, about a week ago, we noted that Class 8 truck orders had a “dead cat bounce” of 10% in January, which marked their first rise in 15 months. 

While analysts pontificated about brighter days for the heavy duty truck market during almost every single data report throughout 2019, we remained skeptical. But it looks as though there will be at least one month of reprieve for the market, with January heavy duty truck orders rising 10% according to preliminary ACT research data and JP Morgan. Class 8 orders were up 17,700 units for the month.

It marked the first YoY increase for the heavy duty truck market in an astonishing 15 months. The data was down 12% sequentially, however. Seasonally adjusted orders were 15,900 units (190,800 SAAR), which were up 3% on a month to month basis. 

 

At the time, we noted that ACT Research had estimated that the backlog will continue to wear away, falling 7,200 units to 116,300 units at the end of January. JP Morgan noted in a research piece last week that “truck and truck components group outperformed the broader

Vieth concluded: “Where the backlog rates are compared with the build rate, we’re golden. This is very sustainable and very good for the industry.”

We’ll see about that, Kenny. 

Authored by James Rickards via The Daily Reckoning,

You’re probably familiar with George Orwell’s classic dystopian novel Nineteen Eighty-Four; (it’s often published as 1984). It was written in 1948; the title comes from reversing the last two digits in 1948.

The novel describes a world of three global empires, Oceania, Eurasia and Eastasia, in a constant state of war.

Orwell created an original vocabulary for his book, much of which is in common, if sardonic, usage today. Terms such as Thought Police, Big Brother, doublethink, Newspeak and memory hole all come from Nineteen Eight-Four.

Orwell intended it as a warning about how certain countries might evolve in the aftermath of World War II and the beginning of the Cold War. He was certainly concerned about Stalinism, but his warnings applied to Western democracies also.

When the calendar year 1984 came and went, many breathed a sigh of relief that Orwell’s prophesy had not come true. But that sigh of relief was premature. Orwell’s nightmare society is here today in the form of Communist China…

China has most of the apparatus of the totalitarian societies described in Orwell’s book. China uses facial recognition software and ubiquitous digital surveillance to keep track of its citizens. The internet is censored and monitored. Real-life thought police will arrest you for expressing opinions opposed to the government or its policies.

Millions of Chinese have been arrested and sent to “reeducation” camps for brainwashing (the lucky ones) or involuntary organ removal without anesthetic (the unlucky ones who die in excruciating pain and are swiftly cremated as a result).

While these atrocities are not going to happen in the U.S. or what passes for the West these days, the less extreme aspects of China’s surveillance state could well be. And while you might not be arrested for expressing unpopular opinions or challenging prevailing dogmas (at least not yet), you could face other sanctions. You could even lose your job and find it nearly impossible to find another.

You can certainly be banned from social media…

Anything seems to go on social media (primarily Facebook, Twitter, Instagram, Snapchat, YouTube and a few other platforms) — unless you’re a conservative personality or politico. That’s where the censorship begins.

Many conservative social media participants have had their acco‌unts closed or suspended, not for threats or vulgarity but for criticism of “progressive” views (albeit criticism with some sharp edges).

Meanwhile, those with progressive views can say almost anything on social media, including the implicit endorsement of violence. But nothing happens.

Other conservatives report being the targets of “shadow banning.” That’s where your acco‌unt is open and seems to operate normally, but unbeknownst to you, much of the network is being blocked from seeing your posts and popular features such as “likes” and “retweets” are being truncated and not distributed.

It’s like being a pro athlete who finds out the stadium is empty and no tickets are being sold. That’s bad enough. But Twitter took the war on conservatives a step further.

Well, one of the most widely followed acco‌unts on Twitter is none other than Donald J. Trump’s, with 68 million followers. President Trump uses Twitter to announce policy initiatives and personnel changes and to offer pointed criticism of political opponents. It’s a major platform for him.

Last month Trump issued a tweet that identified the so-called “whistleblower” of the Ukraine phone call that led to his impeachment. That’s not as big a deal as it sounds because everyone in Washington knew who the whistleblower was (you can look his name up on the web), and he wasn’t even a real whistleblower because he didn’t meet statutory requirements.

Still, Twitter blocked Trump’s tweet. Twitter blamed a temporary system “outage,” but that claim was highly suspicious. Later, Trump’s tweet was restored, but the original acco‌unt that Trump linked to had been deleted. No one ever said that politics was fair.

But Twitter’s blatant interference in the election could have adverse consequences for the company in Trump’s second term.

And a few social media companies are now de facto censors, taking over the job from the government. Given their massive media footprint, they wield extraordinary influence over the American public.

They’re in essence becoming propaganda outfits.

It’s not just here of course. Canada, for example, is actively pursuing digital surveillance to track the activities of law-abiding citizens.

A report for the Bank of Canada says that financial information gathered from digital transaction records could be used for “sharing information with police and tax authorities.”

If all transactions are digital (including credit and debit cards), authorities can track your whereabouts, buying habits, restaurant choices and much more. They could also reveal your political orientation and personal associations.

It’s not difficult to imagine the police and tax authorities using that power to make life extremely difficult for those who criticize the government or sacred ideologies like “climate change.” If you think that sounds extreme, some have actually advocated jailing climate change “deniers.”

Do you think I’m making that up?

Well, the executive director of an outfit called Climate Hawks Vote said “Put officials who reject science in jail.”

The Nation also ran an article called, “Climate Denialism Is Literally Killing Us: The victims of Hurricane Harvey have a murderer — and it’s not the storm.”

“How long,” its author asked, “before we hold the ultimate authors of such climate catastrophes accountable for the miseries they inflict?”

And Robert F. Kennedy Jr. said the Koch brothers “should be in jail,” “with all the other war criminals.”

Well, David Koch has since died, so he’ll escape Kennedy’s justice.

But their “war crimes” consisted of funding organizations that question the climate change alarmism the media  is constantly feeding us.

But guess what? There’s plenty of hard scientific evidence that refutes the alarmist view. This article isn’t the venue to get into it, but the scientific case against climate alarmism is much stronger than the case for it.

But if you dissent against the official view, today’s tech censors will silence or marginalize you, no matter how valid your point.

The problem is, the trend is moving very quickly in this direction and it’s difficult to stop. And sophisticated surveillance technology to monitor citizens is already in place…

For example, cameras with the latest surveillance technology can spot and match millions of faces in real time with an accuracy rate of over 99%. They’re touted as anti-terrorism and anti-crime tools, which they certainly are.

But as Stalin’s ruthless secret police chief Lavrentiy Beria said, “Show me the man and I’ll show you the crime.” It’s easy to see that power being abused to target everyday citizens.

(By the way, Beria would ultimately prove his own point, as he was later arrested and executed for treason).

And actually, many people welcome intrusive surveillance technology on the grounds of convenience. As an example, look at microchipping, where people are injected with a small microchips beneath their skin. Microchipping has been associated with an Orwellian nightmare in which Big Brother constantly monitors your every move.

Well, over 4,000 Swedes have already happily volunteered to have it done.

In addition to acco‌unt information that negates the need to carry cash or credit cards to pay for goods, these chips can contain personal information. It’s all happened fairly quickly. Just a few years ago, the very idea of it would have sent chills down the spines of most people.

But that’s how fast Big Brother can go from nightmare to reality, and appear benign or even beneficial.

Big Brother’s on full display in China right now, but he could be on his way here before too long.

Steve Wynn just can’t seem to find enough frivolous things to blow his billions on. Ostensibly tired of the “old” ideas of building hotels, paying off women you’ve assaulted, superyachts, simply lighting money on fire and wiping your ass with $100 bills, all formerly favorites of billionaires worldwide, Wynn has instead decided to incinerate his capital in a new way: the art world.

Perhaps this is why it was reported yesterday that Wynn had just purchased two Picasso paintings from the collection of the late Donald B. Marron for an astounding $105 million, according to ARTNews.

The deal reportedly includes Woman with Beret and Collar, from 1937, a portrait of Picasso’s lover, and Seated Woman (Jacqueline), a 1962 portrait of his second wife. No news yet on whether or not any Wynn employees will be filing sexual harassment suits for Wynn entertaining both of Picasso’s lovers at the same time.

Marron’s collection, amassed over the course of 50 years, is said to be worth at least $450 million. 

“Mr. Wynn frequently buys and sells fine art,” a spokesperson for Wynn told the Wall Street Journal. Yeah, and small countries.

Major auction houses like Sotheby’s, Christie’s and Phillip’s are all in competition to sell off Marron’s collection since his passing at age 85 in December. Marron’s widow decided to bypass these routes last week, and instead cosigned 300 works from the collection to Pace, Acquavella, and Gagosian galleries.

“It was a lot of money, so we have to deliver – we can’t send any works back to her,” said Bill Acquavella. 

The galleries have not commented on how much they offered Marron’s widow, but it is likely well over $300 million. The Wynn pieces are still scheduled to appear at exhibitions at the Pace, Gagosian, and Acquavella New York galleries. 

Just because the New York Times Opinion Section is a perennial object of ridicule by both the right and the left doesn’t mean its writers don’t occasionally make a good point.

And today, we’d like to draw our readers’ attention to a column published Tuesday by Ross Douthat, a member of the NYT’s editorial board.

As Douthat points out, the outbreak has put Democrats, and liberals more broadly, in a difficult position. Eager to jump at every opportunity to criticize President Trump, many are secretly hoping the outbreak gets worse in the US because it could hurt Trump’s chances of reelection. Many, including top Dems like Schumer, Pelosi etc., have already accused the administration of being unprepared and not doing enough.

But if the outbreak does get worse, it could deal another savage blow to the system of global frictionless exchange of people, goods, services and capital, by making countries more suspicious of allies and enemies alike.

This is why liberals are bashing Trump while arguing that pointing out China’s failures is “racist.”

Republicans also have an incentive to play down the outbreak, as Trump is doing: They need to keep the market buoyant and stave off a recession that could tilt the election in favor of the insurgent socialists backing Bernie Sanders.

In other words: The virus may not be a civilization-ender, as Douthat points out. But it could be the straw that breaks globalization’s back.

* * *

Investors who figured this out last week are already cleaning up. But maybe there’s still something to be learned here:

Read the text below:

A truism of our times is that media hysteria quickly envelops every major story, with social media virality and cable-news imperatives combining to make any domestic controversy feel like Watergate, if not Fort Sumter, and any international incident feel like the assassination of Franz Ferdinand — until the next story rolls around and last week’s crisis is forgotten.

So it’s been striking to watch media coverage of the coronavirus, which has now officially shaken free of its Chinese origins with outbreaks in Italy, South Korea and the Middle East, take a somewhat more muted tack these last few weeks. Of course there has been terrific reporting, much of it from my colleagues at this newspaper, on the surreal developments in the illness’s Wuhan epicenter.

But there has also been a strange lack of urgency in the arenas best known for their hysteria. Cable news has remained fixated on the presidential campaign, social media has been paranoid at the fringes but otherwise calm or even oblivious, our president (not typically one for threat deflation) expressed confidence that Chinese containment and spring warmth would suffice to halt the virus’s spread, and respectable opinion has circulated stern warnings about overreaction, xenophobia and panic.

The curious absence of hysteria probably reflects an interplay between polarization and ideological preconceptions. The political right would normally react to the menace of a viral outbreak in a major geopolitical rival with demands for quarantine and a zealous government response. But with a nationalist Republican president enjoying the benefits of a long economic expansion, there has been a strong partisan incentive to play down or ignore the seriousness of the virus’s threat to supply chains, the Dow, the country’s gross domestic product.

Liberals have partisan incentives that run the other way, toward emphasizing the White House’s unpreparedness in the face of a clear and present threat. But these incentives have so far been outweighed by liberalism’s ideological bias toward global openness, its anxiety about saying or doing anything that might give aid and comfort to anti-globalization forces, its fear of ever sounding too, well, Trump-y in the face of foreign threats. Thus the liberal instinct toward minimization: It’s not much worse than the flu, panicking makes things only worse, don’t spread conspiracy theories about its origins, racism toward Chinese people is the real danger here.

As of this week, with the virus finally infecting the stock market, this bipartisan minimization looks like a serious mistake. The coronavirus is not a civilization-ender, not Stephen King’s Captain Trips come for us at last, but it’s increasingly obvious that we do have a lot to fear from it, both medically and economically — and the American response seems to lag substantially behind where we should want to be right now.

The reasonable medical fears center on what is unknown as much as what is known. Because this disease broke out in a totalitarian regime, under circumstances that even China’s government now admits are more uncertain than the pious certainty offered for weeks, our knowledge of infection rates and death rates has likely been corrupted from the beginning, by misinformation and ignorance alike.

We know enough to know that most people who get it will survive it, which is good news. But we don’t know how many people get infected, how long it incubates, whether spring or summer weather will actually impede its spread. We also don’t know how many people are carriers without knowing it, and thus how easily it might move along vectors that don’t require a chain of clearly sick people running back to its point of origin. (The outbreaks outside China, in Italy especially, suggest a longer incubation period and a lot more silent contagion than had been previously hoped.)

The extreme measures that have been taken to contain the disease inside China promise all kinds of global breakdowns if they endure there and spread around the world. The supply chains that now bind our world system have never been tested in a severe pandemic, and one can extrapolate forward from China’s developing economic slowdown, and from slow-building delays and shortages worldwide, to a scenario where the coronavirus finally brings the post-2008 expansion to a grinding, deglobalizing halt.

Perhaps the worst can be averted, but these scenarios have been obvious from early in the epidemic — and so has the possibility that underreaction could make things worse, that a bias toward stability and reassurance could lead to darker outcomes in the end. It wouldn’t be the first time: As Ari Schulman wrote in The New Atlantis in 2015, during the previous year’s Ebola outbreak, the C.D.C.’s determination to reassure the public led to messaging “based on fragmentary evidence” that other evidence qualified or contradicted and left nurses caring for Ebola patients wearing only surgical masks instead of respirators; only after two nurses were infected were the guidelines changed. The World Health Organization’s response to the Ebola outbreak was delayed by fears that declaring an emergency “could anger the African countries involved, hurt their economies, or interfere with the Muslim pilgrimage to Mecca.”

From what we can tell, the coronavirus outbreak in China followed a similar pattern of “all is well” folly and insufficient first response. But in the United States, too, the “we have nothing to fear but fear itself” messaging seems inapt, given that America’s slow internal response, our apparent failure so far to expand testing beyond those who seem most obviously exposed, means that we have no way of knowing whether and how many cases are already circulating here. We may have an Italian scenario on our hands already, disguised as normal flu cases, normal flu deaths; given the still-limited scale of United States testing, there is no way to be sure, and if we escape a major outbreak, it will be more from luck than prudence.

So already, the virus has exposed a clear weak spot in what you might call the liberal-globalist imagination: an overzealous “remain calm” spirit in the face of the real risks of a hyper-connected world.

And behind that weakness lurks a structural danger for the globalist project. For the last few years there’s been a lively policy debate about the wisdom of exporting so much of the American industrial base to Asia, but it’s mostly revolved around national-security questions — what would it mean in a war with China, etc. But it turns out that you don’t need a conflict in the Taiwan straits to make the entire China-United States economic arrangement look reckless or vulnerable or unwise; you could just need one significant mutation, of one novel flu-like sickness.

But before populists crow their vindication, we need to see how our populist president handles any of this. If globalism’s weakness is technocratic naïveté, populism’s faults are ignorance, incompetence and paranoia. Nothing about President Trump’s response so far instills confidence that he’s ready for the kind of crisis that Candidate Trump would have been quick to recognize and politically exploit. And the fact that Rush Limbaugh spent yesterday declaring that the coronavirus is no worse than the common cold, and that it’s “being weaponized” by the press “to bring down Donald Trump” — well, that doesn’t instill confidence that pressure from the right will force Trump to take the outbreak seriously.

By coincidence I’m writing this column from an airport, about to embark (hand sanitizer in my pocket) on a small tour for a new book whose argument, in part, is that the Western world may be sustainably decadent — meaning that for all our gridlock, stagnation and decay, the cushion of our wealth, the weakness of our rivals and the tranquilizing effect of virtual entertainments make continued stagnation much more likely than true crisis or collapse.

I wasn’t expecting to have my thesis tested this directly while I’m literally out expounding on it. But make no mistake: The coronavirus is a test, targeted precisely to the globalized order’s points of fracture and the mix of misgovernment and mistrust associated with the populist-establishment stalemate in the West.

I believe in my own thesis enough to assume that we’ll muddle through, in the end, with (God willing) not too much damage, not too many deaths. But for better or worse we may know a lot more about the resilience of our world-system, the sustainability of our decadence, by the time the paperback comes out.

Illinois wants to play catch-up with its rainy day fund at what is likely the worst possible time.

With 11 years of bull market behind us and a pandemic that is starting to make its way across the globe, it is only now that Governor J.B. Pritzker has decided he wants to help bolster the state’s safety net. He’ll be playing catch up to many other states, who used the last decade to bolster their respective states’ funds, according to Bloomberg. 

The Democratic governor is proposing putting $50 million from the state’s surplus into a “budge stabilization fund” this year and then doing the same thing in 2021 if voters approve an income tax referendum currently before the state. The fund was almost depleted in 2017 when the state’s government, led by a Republican Governor with a Democratic legislature, locked up. 

Meanwhile, the rest of the country holds a record $74.9 billion in rainy day funds. Once again, Illinois is behind the eight ball.

U.S. states have seen nine straight years of increases to their rainy day funds and can run operations for a median of 27.9 days on these funds. Illinois has funds for less than one day. 

Justin Theal, an officer with Pew said simply: “Illinois is less prepared.” The state currently has a paltry $58,655.62 in its rainy day fund. Legislation has been proposed to automatically increase monthly transfers to the fund when the state’s bill backlog is less than $3 billion. Currently, that backlog sits at $7.3 billion. 

The purpose of rainy day funds is to give states a cushion: help them rely less on budget cuts or protect against drops in revenue or when the economy starts to grind to a halt. Gov. Pritzker calls his proposed idea “repairing the financial damage of the past.”

Eric Kim, senior director of public finance for Fitch Ratings says the $100 million proposed for the fund over the next 24 months is a “step in the right direction”. We wonder if Kim knows that no money has actually been put away yet and that it’s just a corrupt bureaucratic spending circle jerk that that will likely result in the money being siphoned off elsewhere before it ever hits Illinois’ savings account. 

But even in a best case scenario, allow us to offer a reality check: the idea of having the state’s financial house in order well enough to contribute to this fund over the next 24 months will be at the behest of the economy and the stock market holding up. If this this week’s volatility and the emerging coronavirus threat is any indication, we may be on the precipice of a long-overdue tipping point for both the economy and the market.

And this would be the time you would want the rainy day fund to tap into – not the time to decide to start saving for one. Can Illinois save $100 million in 2 years? We’ll follow up on this story as it develops – but as for our bet, we’ll take the under. 

Authored by Michael Krieger via Liberty Blitzkrieg blog,

There are several reasons I spend so much time discussing and analyzing the current state of affairs. The primary motivation, aside from a drive to share personal opinions and spread awareness, is to encourage people to think critically. I don’t want readers to agree with everything I say, I want people to become inspired to think for themselves.

The ruling class doesn’t want you to think, they want you to simply accept the nonsensical stories they tell you. By contrast, I don’t want readers to blindly accept any of my conclusions, rather, I want my work be a case study on how to deploy independent logic and insight to a variety of topics and situations.

While I haven’t discussed the 2020 presidential campaign much here, I comment on it quite a bit over at Twitter, and people often ask why I discuss the circus at all. The reason isn’t because I expect a politician to come save us and make everything right again, but because the establishment response to populist-type candidates is so instructive.

Although Trump hasn’t done much of anything to address our nation’s core fundamental problems; such as a two-tier justice system, central bank power, financial feudalism, aggressive militarism/empire, rogue intelligence agencies, civil liberties abuses and tech giant censorship, his unexpected victory over chosen one Hillary Clinton nevertheless exposed many individuals and institutions for the frauds they are. Bernie Sanders’ run is doing the same thing. You don’t have to like the specific policies of Trump or Sanders to appreciate how any candidate with even a hint of grassroots populism puts the “elites” into panic mode.

Trump’s run exposed the mass media for the lying charlatans they are. Bernie’s run is doing the same.

It’s all good. We need the lesson, and need to stop being babies pretending these networks are anything but propaganda.

— Michael Krieger (@LibertyBlitz) February 22, 2020

It’s important to understand the ruling class doesn’t actually fear Trump or Sanders individually — any one person can be dealt with. What they really fear is you. They fear people flocking to unapproved candidates and then talking about things the establishment doesn’t want them talking about. This is the main reason the whole Russiagate fantasy was unrolled against Trump and pushed hysterically by mass media.

By ensuring “the resistance” to Trump revolved around some invented intelligence agency narrative, the power structure was able to prevent large numbers of people from talking about anything real or significant for four years straight. Although it didn’t remove Trump from office, it successfully reduced hitherto thoughtful people into emotionally broken mental midgets.

This is the reason the exact same tactic was just unrolled against Bernie Sanders, with Jeff Bezos’ Washington Post reporting the day before the Nevada caucuses that Russia is also supposedly helping Sanders. It’s ridiculous, but you have to understand the strategy here. If Sanders can’t be prevented from winning the nomination, the establishment needs a plan B, and that plan appears to be Russiagate all over again. These people aren’t very creative.

When it became clear Trump couldn’t be stopped he was smeared with being a tool of the Russians, and the same seeds are being planted around the Sanders campaign. It doesn’t matter how preposterous it is, the primary goal is to ensure nobody ever talks about anything important. Absent Russia hysteria, a Sanders vs. Trump matchup would quickly become a battle of who’s more populist, and issues that make so-called elites very uncomfortable would become widely discussed.  The ruling class doesn’t want the public talking about such things so they need to turn the election into a complete circus if Sanders can’t be blocked. Instead of talking about economic insecurity, healthcare, the cost of college and wars for empire, the goal is to make Sanders and Trump spend the entire campaign season arguing about who hates Russia more.

The important takeaway here is how completely terrified and decrepit the ruling class of this country really is. They have no argument or philosophy about anything important. As such, their only tactic is to overwhelm the public with nonsense and invented narratives in order to divide, befuddle and control the masses while keeping the imperial oligarchy running exactly as it has for decades. Once you see the game, it’s impossible to unsee it, but the good news is we all possess within ourselves the power they fear most. The power to think for ourselves and to reject ridiculous lies.

This is why we need to place relentless pressure on these people and never let up. When they feel pressure, they get scared. When they get scared, they become desperate. When they become desperate, they make mistakes. After enough mistakes, we win.

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