Interview by
Luis James
L: Doug, with all the US election gossip in the news,
readers are wondering what we make of the circus. The Republicans haven't
settled on which walking ethical disaster they are going to pick as their
candidate, and neither of us thinks the only decent man in that contest
– Ron Paul – will get the nod. With recent economic numbers
seeming to bolster the president, your fear that the Democrats could pick a
left-wing general instead of Obama seems to be evaporating. So, what do you
think – is it looking like four more years of Obama?
Doug: Well, as Clinton correctly said, "It's the
economy, stupid." This is hands-down the determining factor in how most
people will vote. Unfortunately, most people don't have a clue what actually
makes for a strong economy. In the unlikely event that the economy does not
exit the eye of the storm this year, my guess is that people will vote for
Obama. The economy seems better to those who are not looking too closely;
it'd be "Don't change horses midstream" and "Steady as she
goes" type thinking.
L: But if you're right about the economy exiting the
eye of the storm?
Doug: Then the Republicans should have a shot. But the
leading candidates, other than Ron Paul, as you mentioned – Romney,
Gingrich, and this horrible new contender, Santorum – are all extremely
dangerous, rabid warmongers. On top of that, Santorum appears to be something
of a religious fanatic who poses a dangerous threat to the social fabric of
US society. Of course all of them thump the Bible, catering to Americans'
atavism; the US is the by far the most religious of the world's developed
countries… so maybe Santorum is what they want.
L: We've talked about Ron Paul before; still no hope
there?
Doug: No. It's a pity, because he's the only real antiwar
candidate consistently polling at significant numbers – 15% to 20%.
He's also the only real voice for fiscal sanity, rolling back the police
state, deregulating the economy, and many other positive things. But he's got
no chance. He speaks fairly well for the libertarian minority in the US, but
certainly not for the entitlement-mentality majority, and not even for the
majority of Republican voters. The Republicans have become the warfare party,
and Dr. Paul doesn't fit in. The Democrats have long been the welfare party,
so he doesn't fit in there either. It's just not going to happen for Ron
– not because of any fault with him, but because the whole system is so
corrupt and the electorate is so degraded. If the US is to be compared with
ancient Rome, then we're far beyond the days of the early republic, when
heroes like Horatio and Cincinnatus could provide inspiration and save the
day. We're more at the stage where US leaders resemble emperors of the third
century, every single one of whom was a disaster. Men like Elagabalus and
Caracalla, and finally Diocletian, who transformed the empire into a
proto-feudal police state out of desperation. Leaders tend to reflect their
constituency, and the state of a country. The US empire is in severe decline.
But let's talk about Obama. I've been accused of being soft on Obama,
even though he's arguably an even worse president than Baby Bush was. I've
even been accused of pandering to racism, because I haven't lambasted Obama
in the same way I used to take pleasure in lambasting Bush…
L: If you did lambaste Obama, I'm sure you'd be
criticized for speaking ill of the first black US president. But if you also
get criticized for not calling him out, you're damned if you do and damned if
you don't.
Doug: Yes, saying anything unkind about the first black
US president is clearly proof of racism. [Laughs] That just shows how
completely degraded political discourse in the US has become. Pundits don't
see people as people to be praised or criticized on the merits of their words
and deeds, but as members of groups. A president, in this view, should not be
judged on his ideas, policies, and actions, but on which groups he can be
seen as part of.
It also helps to be totally vapid, so no one can find any dirt on you;
I suspect that's Santorum's main virtue. And smarmy – like Mitt Romney
and Rick Perry smiling at each other during the "debates" when they
each really wanted rip the other guy's lungs out. Anyway, they aren't real
debates, where ideas are discussed intelligently and explored fully. They're
just charades where the candidates try to remember good quips and funny
one-liners that their handlers have written for them.
L: The refusal to judge a person based on his or her
own merits is pure groupthink.
Doug: Exactly. One of the driving forces of this prison
planet we live on. The candidates just want to be alpha monkeys, in order to
lord it over the beta monkeys.
Back to Obama. It's interesting to observe that in spite of some of
his rather extreme positions on some things, he doesn't act aggressively,
like his Republican competitors would do. He's slick, with everything he says
couched in reasonable-sounding language. He never comes across as a radical.
Yet bad ideas seem to seep out of the White House like swamp gas in the
night. They rarely change greatly from one moment to the next, but mutate
slowly like a cancer, eventually building up a fog of deceit in
reasonable-sounding, smarmy doublespeak, so that it's hard for most people to
know what's right. That was the nice thing about Bush: he was outspoken,
albeit in a stupid kind of way. He constantly stuck his foot in his mouth, so
it was hard to take him seriously.
However, I take Obama very seriously. Everything he has put forward
has been terrible policy. And he's surrounded himself with about 20
"czars," all of them hardcore statists. I think the practice
started with Jerome Jaffe – the drug czar
under Nixon – but it's gotten out of control under Obama. Strange, I
don't see the word "czar" anywhere in the Constitution…
L: As for specific policies, there was, for starters,
his healthcare reform; he managed to take the US further down the road to
socialized medicine than anyone since Lyndon Johnson.
Doug: Yes, he took that title away from Baby Bush, who
added the massive prescription drug benefit for Medicare recipients. But I
have to object when you say "health care," because what we're
really talking about is medical treatment, which is care when you're sick.
It's not actually health care,
which is about eating well, exercising, and things that keep you from getting
sick.
L: I know, I know…
that's just the terminology of the day; I should know better than to let the
enemy define the terms. For example, I've long thought that it's a mistake to
use the word "capitalism" when discussing the free-market system.
Capitalism was Marx's term, and not only was his view of capital as
wrong-headed as the labor theory of value, it
mistakenly encourages the idea that industrialists have more power in the
marketplace than their customers. Just ask the former heads of General
Motors, IBM, Kodak, Xerox, and other fallen giants if they had more power
than the customers who stopped consuming their products.
"Consumerism" is a dirty word in today's world, but it's a more
accurate word for free enterprise, if you want to define it in terms of who
calls the shots.
Doug: It's critical to be careful with your words; these
collectivists and statists have won half the war if you let them define the
terms. That's why we so often start these conversations with a definition.
The sloppy and undefined use of words leads to sloppy and undefined thinking,
and that leads to stupid and destructive actions.
L: So, should we define Obama?
Doug: That's hard to do. You know, it's funny. When Trump
was running, I criticized him. It's hard for me to say anything good about
Trump under any circumstances – but he at least had the brass to ask
questions about Obama that other public figures wouldn't touch, questions
about who Obama really is and how he seemed to
appear from nowhere. To my knowledge, no one has stepped forward to identify
themselves as a school friend, or even a college friend of his. I'm not a conspiracy
theorist, but I have to say that as far as I know, none of these questions
have been satisfactorily answered.
L: You don't need to believe any conspiracy theories
to notice that there's something odd about the man. He seems like a big zero
to me, not a big O. Even when he's reading the speeches people write for him
to pull on the population's heartstrings, he comes across almost completely
wooden. Sometimes I'm sure he's pausing not where there are commas or
periods, but where the lines wrap on his teleprompter. He has the personality
of a frozen mackerel.
Doug: It's interesting that you point that out –
I've often wondered if the special interests behind him couldn't come up with
anyone better. I'm not saying he has to be another George Carlin or Dave Chappel, but it would be nice to see that someone is
home. Obama is so flat, I can't even be sure whether he's intelligent or not,
although I initially assumed he was very smart. With Baby Bush, it was clear
that he actually lacked intelligence. With Obama carefully plodding through
his teleprompted speeches, I actually can't tell if
he's smart or not. He was president of the Harvard Law Review, which
would seem to argue for intelligence, but that could have been finessed as
well. And exactly who paid for all his schooling and related expenses? I
honestly don't know who we're dealing with.
L: It's almost as though he were literally a puppet.
Maybe there really is no Obama.
Doug: He's an empty suit. But then, so are Romney and all
of the guys who actually stand a chance of becoming president of the US. This
actually softens my dislike of Gingrich, among those who seem to have a
chance this time around. He's outspoken. A lot of his ideas are manifestly
dangerous or goofy, but at least he comes out and says them – at least
he actually has ideas – and that makes him interesting at times. Nor
does he attempt to hide his arrogance. There's something to be said for
exposing your vices as opposed to hiding them; hidden vices are much more
dangerous, like hidden IEDs.
L: Something to be said for entertainment value?
Doug: Sure, although it's entertainment on the level of
farce. There's no element of nobility in any of these people. The ancient
Greek tragedians wouldn't have considered putting any of them in a play:
These aren't great men with tragic flaws; they're pathetic clowns. They're
all play-acting, pretending to be something their pollsters think the electorate
wants, pandering to the unwashed mob.
If they were to appear in a play, Perry might be cast as an assistant
manager at a Target store, Gingrich as the vice principal at the local
community college, Romney as an aspiring actor who wants to play the father
in a 1950s-style sitcom, Santorum as goody-goody DMV employee, and Obama as a
community organizer… whatever that is. Ron Paul is too authentic to
appear in such a low farce.
Anyway, to escape from their lackluster lives, they go bowling
together on Wednesdays. Even though they're quite similar – or maybe
because they're basically so very similar – they don't like each other
and get into arguments centering on two things: each other's poor character
and their uninformed and unsound political and economic views. You could just
use lines from the debates and Obama's speeches for the dialogue.
But I fear it would be a boring show unless Saturday Night Live
or The Onion did it. No way would Aeschylus or Sophocles
touch the material; they liked heroic characters with tragic flaws. It's
impossible to write good tragedy about nonentities.
Obama seems to lack any personality – unlike, say, Clinton,
who's a genuinely engaging guy, even though his ideas are almost as uniformly
bad as Obama's. I have to ask myself: What kind of a person can become
president of the US at this point? Clearly no one with strong principles will
ever make it, partly because such a person can't make the insipid,
inoffensive, statements that appeal to the lowest common denominator. I
wonder where they find these people? It might be a
good new reality show – call it The Lowest Common Denominator.
L: Okay, but we've probably crossed the line to making
personal attacks – though I think those who presume to rule over others
deserve greater public scrutiny of their persons and ideas. Let's get back to
policy. "Cash for clunkers"
was, if I'm not mistaken, an idea backed by the Obama administration, and in
my view a clear attempt to simply open the spending spigots to try to bribe
the electorate.
Doug: Yes, that was a great idea. Subsidize the
destruction of perfectly good vehicles with billions of borrowed dollars, in
order to keep mismanaged auto companies afloat. Then there was the housing
credit, which induced scores of thousands of people to get into the
collapsing housing market at taxpayer expense. And keeping interest rates
near zero, in a desperate attempt to keep old bubbles inflated; that will
just inflate new bubbles while it destroys the currency. Obama is disaster
incarnate for the economy. Everything he's doing – and pushes the Fed
to do – is not only the wrong thing, but the exact opposite of the
right thing, as we've commented on many times. I honestly can't think of a
single good thing about Obama. There must be something… perhaps he
neither kicks his dog nor beats his child. But he's a sociopath; he's got all
the signs of one that I spell out in this month's Casey Report… just
like Clinton. But not so much like Bush, who was helpful in defining the
often fine line between "stupid" and "evil."
L: What about foreign policy? He did bring the troops
home from Iraq. I wish he'd bring them all home, but that was a step in the
right direction, wasn't it?
Doug: Yes, bring them home so they can practice the bad
habits they picked up as invaders in the Middle East as cops in the US. But
it's true – he did get US troops out of Iraq. On the other hand, the
Obama administration has put new troops in other places, like Uganda and
Australia, participated in the bombing of Libya, and who knows what he'll do
if Egypt falls apart. He may yet intervene in Syria, where the US is already
sending arms to the insurgents. I suspect he and his minions are now
negotiating with the Taliban mainly to arrange a semi-graceful exit for the
troops next year from Afghanistan. It wouldn't do to have a running gun
battle while the last people are evacuated from the embassy in Kabul, holding
on to the skids of helicopters, like in Saigon. And it looks like they'll
start a war with Iran.
L: Yes, he can hardly claim to be a man of peace when
he likes to take credit for ordering the extrajudicial execution of Osama
Bin Laden.
Doug: What are you talking about? Don't you know he was
awarded the Nobel Peace Prize?
Actually, I'm glad he got it: it serves to fully discredit the prize as an
overrated scam. And how about this new National Defense Authorization Act
that allows the military to detain US citizens indefinitely? That was hardly
a bill a defender of civil liberties would sign into law.
Obama, whoever and whatever he is, is just bad news all around. If
he's reelected, people are going to get exactly what they deserve. That's one
good definition of justice, and you have to be in favor of justice. The only
problem is that it's unjust for the maybe 20% of the population who've fought
against the descent of the US into a police state.
L: So… if the economy doesn't blow up and the
election is likely to go to the Democrats and not the Republicans, do you
think that a guy as boring as Obama can actually get reelected?
Doug: If the economy doesn't blow up, I do think Obama
will be reelected. Most US citizens are recipients of government largess of
one sort or another these days, and they won't vote for Republicans who might
cut or reduce their handouts. And maybe Americans want witless and boring;
that makes things seem normal. It's grasping at a straw… appearance rather than reality.
Though I still think that if the Democrats really wanted to lock in a
win, they'd get a left-wing general to run. It's a scary world out there, and
people want security, not just in their pocketbooks, but from all the threats
they've been told are menacing them from all around the world. Americans have
apotheosized the military. They idiotically believe it's efficient, when
actually it's just a heavily armed version of the post office or the TSA. And
they idiotically believe it isn't corrupt – even though all the top
generals are politicians first and Pentagon spending is like a billboard
advertising corruption.
L: Do you think that could actually happen? Obama
seems pretty strong with his supporters – wouldn't he have to be caught
in the closet with a sheep or something like that to lose his party's nomination?
Doug: That's probably right, so again, if the economy
doesn't blow up, we'll likely get four more years of Obama. Even if the
economy really blows up, the possible Republicans are so unappealing that
it's hard to believe any of them could get traction. That and the fact that
half the country relies on government benefits that they fear a Republican
would take away means we might get four more years of Obama anyway. Although
there's no chance elected Republicans will actually cut spending; Republicans
are chronic hypocrites who talk the talk in order to gull naïve voters
in the diminishing middle class. Perhaps we'll get The General only after the
Greater Depression has a lot more people living in tent cities. And after the
US has bombed and been counterattacked by Iran – and maybe had a few
more wars as well. A
"strong" leader will
have great appeal in 2016.
L: The Man on a White Horse. Sigh. Investment
implications?
Doug: Well, I do think the economy will take a nosedive soon, in
which case the recommendations are the same as we've been making. We're not a
trading service – entirely apart from the fact that I don't believe in
trading. But, under the four more years of Obama scenario, we'll almost
certainly see massive inflation, which would be bullish for industrial metals
and could even be good for stocks in general, even though I don't think they
are cheap at this point in time. There could be many new bubbles created by
the massive amoun Doug Casey on Obama and the 2012 Election ts of liquidity they'd have to pump into the economy, and
we'll watch out for those.
On a more fundamental level, whatever they do and whatever amount of
paper money they throw at an economy suffering from decades of distortion and
malinvestment, I just don't think it's possible to
return to real prosperity without going through the wringer first. Even with
massive liquidity injections, life for the average guy is not going to get better, it's going to get worse. I expect chaos, but I'm
not looking forward to it. Chaos will present opportunities, but it's also
quite unpleasant and inconvenient.
L: Okay, but let's say Helicopter Ben starts throwing
billions of bushels of new $1,000 and $10,000 bills out of his fleet of
helicopters – where would be the best place to stand with a net to
catch some of those?
Doug: Well, in spite of my many differences with him, I
am partial to what Warren Buffett says about investing in basic businesses.
You want to be an owner of a well-run business that produces simple things
everyone needs and wants – even if their standard of living is
collapsing. But the key is to buy such companies at bargain-basement prices
– to succeed as a speculator, you have to buy low and sell high.
L: Hm. Well then, in addition to our usual calls on
the precious metals and energy, this seems like a good time to point out
certain sectors within the tech markets. New innovations that make things
better/faster/cheaper would be even more in demand in a depression, and new
medical devices and treatments are always going to be things people want and
need, regardless of economic conditions.
Doug: Right. And stepping back from intelligent
speculation to intelligent investing – because they're two different
methodologies – I want good, solid companies. High dividends, low P/E
ratios, and solid growth are the holy grail. But I think it's too early to
buy. Too much turmoil and uncertainty ahead, even for the best-run companies
with the most essential goods and services. I'd rather buy after we're in the
middle of the turmoil, not before it appears.
I also feel compelled to remind readers of the urgency of diversifying
the political risk in their lives by internationalizing. This is the best
sort of thing discussed over a cigar and nice glass of wine, which maybe
readers will join me for at our upcoming Harvest Celebration in
Argentina. I understand that there are few a still spots left.
L: Okay then. A look at the situation from a slightly
different angle. Thanks for your thoughts.
Doug: A pleasure, as always. I know you're in the Congo
as we speak. Perhaps next time we can talk about Africa…
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