Feeding Like Leeches
AIKEN, South Carolina – The poor Republicans! A Washington Post story wonders if the party could “break in two.” Party stalwarts are threatening to desert to Hillary. And a Texas newspaper worries that the GOP could be “on the verge of extinction.”
Aaaaaaand… it’s gone!
Image via reverbpress.com
Not much to report from Wall Street lately. The Dow is still teetering on the 17,000 level… like a school bus on the edge of a bridge. Several readers wrote in to complain about our fact-ish item: that $176,000 was the cost of “salaries” for the typical third-grade classroom.
The figure came from Conspiracies of the Ruling Class, a new book by Lawrence Lindsey, the director the National Economic Council during the G.W. Bush administration. The title was so provocative, we picked it up.
The idea of a “conspiracy” at the top of U.S. politics… and a “ruling class” in what is supposed to be a republic… suggested that the author, a Republican insider, had lost his party membership… or his mind. We opened it eagerly… hoping it was the former, not the latter.
Perhaps Lindsey – anticipating the neocons who are abandoning the GOP banner for the Deep State favorite, Hillary Clinton – had stolen a march on them… and gone over to the Democrats. Lindsey’s point, insofar as the education numbers are concerned, was that the typical third-grade teacher doesn’t get a salary of $176,000. Nowhere close.
Instead, the money goes into salaries for administrators, “educators,” and all the assorted zombies now feeding like leeches on the public school system.
Lawrence Lindsey, former director of the National Economic Council, comes rolling by.
Photo credit: Rotundlvr / via flickr
Rigged and Rotten
You could look at the entire system in the same way. You’d find zombies hiding in every corner and crevice – from the National Labor Relations Board… to the Federal Bureau of Prisons… to Pentagon procurement… to the Food and Drug Administration… to the Securities and Exchange Commission.
The whole shebang is rigged and rotten – including the financial system. The typical voter doesn’t understand why or how. Who does? But he feels it. Something is wrong; he knows it. And more and more, he wants to say so.
So far, the most effective voices for this discontent are Donald Trump and Bernie Sanders – neither of whom has much truck with the GOP’s traditional principles. Consider a report yesterday in Investor’s Business Daily.
“Small Businesses Are Hitting the Brakes on Wages and Benefits,” reads the headline. The article that follows gives the results of a poll of small business owners. Generally, they are not feeling their oats. Instead, they are putting a “chill” on hiring and capital expansion projects.
The NFIB small business optimism index is once again rolling over after having barely recovered from the demise of the housing bubble. Few charts illustrate better how the centrally planned fiat money-based cronyism of modern regulatory “democracy” is becoming an unbearable burden on what little is left of free market capitalism. Its assorted rackets are siphoning more and more real wealth away from genuine wealth creators into the pockets of cronies and zombies – click to enlarge.
This attitude is now being blamed for the surprisingly weak wage data that came out earlier this week. More people are working – according to the official reports – but doing less overtime and earning less money. The survey also revealed the following detail:
“Another factor for weaker wages: In addition to weaker sales, a net 4% reported lower selling prices, the worst in more than five years.”
Lower prices leave businesses with lower margins. And less desire to hire. This is part of the dreary picture that faces young people today… and it’s why they, too, may be turning against the GOP and its “establishment” candidates.
From Red Alert Politics, an online publication for conservatives, comes the following report:
“A 30-year-old millennial earns roughly the same as what a 30-year-old earned 30 years ago, according to a new study from the Center for American Progress. The wage stagnation is demoralizing when the differences are vast. Millennials today “are 50% more likely to have finished college and that they work in an economy that is 70% more productive,” but a weak recovery and a shift in the labor market has kept starting salaries low, the report notes. The median compensation for 30-year-old workers in 1984 was $18.99 per hour. By 2004, it had moved up to $20.63 hourly, but declined to $19.32 hourly by 2014.”
The Atlantic added further detail:
“In retail, wholesale, leisure, and hospitality – which together employ more than one quarter of this age group [between 25 and 34] – real wages have fallen more than 10% since 2007. To be clear, this doesn’t mean that most of this cohort are seeing their pay slashed, year after year. Instead it suggests that wage growth is failing to keep up with inflation, and that, as twenty-somethings pass into their thirties, they are earning less than their older peers did before the recession.”
Count on a progressive think tank like the Center for American Progress to provide claptrap “solutions” – including increasing “private sector unionism.” Bernie’s got answers, too – raising taxes on the rich and providing free education and free health care.
But the poor GOP – and its leading man, Trump – has no answers at all, not even crackpot ones. Mr. Trump is a deal maker. A negotiator par excellence. But who are you going to negotiate with to get the economy moving in the right direction?
We saw him on TV last night. The more we see him, the more we like him… and the surer we are that Americans are doomed. “The world is ripping us off,” he said; who “the world” is and how it rips us off is unclear.
Successful nightmare dispensers
Cartoon by Chip Bok
Part of the Problem
Old-school Republicans would have had answers. But you’d have to go back a long time to find them.
“Try some real money for a change,” they would have said. “And, oh yes, balance the budget, too.”
But today’s Republicans are usually part of the problem, not the solution. They have been bought by the Deep State. Now, they offer much the same nonsense as the Democrats: tax, spend, borrow, regulate, bomb, imprison. In that regard, the last Bush administration was probably the worst in modern U.S. history.
The GOP is in disarray. It doesn’t believe its own core ideas. Neither does its standard bearer, Trump, or the voters. When we picked up Lindsey’s book, we hoped he might put some light on the subject. Or at least a kick in the derriere to the Republican leadership.
“They lost the plot,” he might have said. “They set up the Deep State to take over. No wonder their candidates aren’t winning!” Instead, he loses the plot himself. It’s all the fault of the liberals, Obama, the Clintons… and even Franklin Roosevelt, he suggests. In such a target-rich environment, it is a shame to waste the ammunition on the dead.
Here is an “old school” Republican – a species that has all but died out: Senator Robert A. Taft of Ohio, here depicted in 1952 during his bid for the nomination. He was the ideological opposite of today’s neo-”conservatives”. In favor of a sane foreign and domestic policy, often denounced as an “isolationist” because he didn’t want the country to wage costly and unnecessary wars of aggression.
Photo credit: Bettmann / Corbis
Charts by NFIB, Doug Short / AdvisorPerspectives
Chart and image captions by PT
The above article originally appeared as “Republicans for Hillary“ at the Diary of a Rogue Economist, written for Bonner & Partners. Bill Bonner founded Agora, Inc in 1978. It has since grown into one of the largest independent newsletter publishing companies in the world. He has also written three New York Times bestselling books, Financial Reckoning Day, Empire of Debt and Mobs, Messiahs and Markets.