American Consequences - July 2018

What Wall Street is Reading Unusual Vacations for Next to Nothing AMERICAN CONSEQUENCES A Conversation With Robert Kiyosaki

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CONTENTS

JULY 2018 : ISSUE 13

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48

76

72

26

52

6

AMERICAN CONSEQUENCES

4 Inside This Issue

56 Reading The Wealth of Nations All the Way Through BY P.J. O'ROURKE 62 Unusual Vacations for Next to Nothing BY DR. DAVID EIFRIG 68 Read This: What I'm Reading This Summer 70 Read This: Get Me a Quote on That: Book Edition COMPILED BY P.J. O'ROURKE 72 Populism’s Corrupt Core BY JAMES A. GOLDSTON

BY CHRIS GAARDE

6 Letter From the Editor BY P.J. O'ROURKE

Editor in Chief: P.J. O’Rourke Editorial Director: Carli Flippen Managing Editor: Steven Longenecker Contributing Editors: Roddy Boyd, Turney Duff, Dr. David Eifrig, Mohamed A. El-Erian, James A. Goldston, John Podhoretz, Robert Kiyosaki, Buck Sexton, Philip Terzian Newswire Editors: Scott Garliss, John Gillin, Greg Diamond Assistant Editors: Chris Gaarde, Laura Greaver Creative Director: Erica Wood Cartoon Director: Frank Stansberry Contributing Cartoonists: George Booth, Mick Stevens General Manager: Jamison Miller Advertising: Sam DeCroes, Jared Kelly, Jill Peterson Editorial feedback: feedback@ americanconsequences.com

12 What Moved the Market

14 What Could Possibly Go Wrong?

16 From Our Inbox

COMPILEDBYSTEVEN LONGENECKER

20 Wall Street: Summer Reading BY TURNEY DUFF

26 3 Books That Aren't About Investing, Which Every Investor Should Read BY P.J. O'ROURKE 34 What Our Readers are Reading BY YOU 40 Books That Had an Impact on Us BY US

76 A “Reagan Moment” for International Trade?

BY MOHAMED A. EL-ERIAN

80 Acadia Pharmaceuticals Is Not a Pharmaceuticals Company BY RODDY BOYD

42 A Conversation With... ROBERT KIYOSAKI 48 Business Best-Sellers BY PHILIP TERZIAN 52 Not So Great Expectations BY JOHN PODHORETZ

86 The Final Word

BY BUCK SEXTON

90 Featured Contributors

American Consequences 3

INSIDE THIS ISSUE

T his month, we’re bringing you our first- ever summer reading issue... But you won’t find any James Patterson or Danielle Steel on our list. Editor in Chief P.J. O’Rourke shows us just how much literature hates capitalism, and talks about three books, which aren’t about investing, that every investor should read. Turney Duff explores what Wall Street is reading, a list that (unsurprisingly) shares two titles with a review of the top Business best-sellers by The Weekly Standard’s Philip Terzian . P.J. tells us why we really should read Adam Smith’s The Wealth of Nations – all 900-plus pages – for not only a better understanding of economics, but also for the morality Smith conveys. We also feature some money-saving vacation tips and tricks from Dr. David Eifrig , including a way to vacation internationally at nearly half the usual cost. Best-selling author Robert Kiyosaki tells us how his childhood and service in the Marines shaped his investment outlook... and also one way that he is “very similar” to President Donald Trump. Lawyer James A. Goldston warns us that the recent rise of populism and autocracy are merely a byproduct of decades of underlying cronyism and government corruption.

Allianz’s Mohamed El-Erian explains why it may not be “Morning in America” for President Trump’s trade war... John Podhoretz shows us that sometimes even the best books make awful movie adaptations, and how some of our favorite blockbusters today were born from really bad writing. Investigative journalist Roddy Boyd reports on a questionable, FDA-approved “treatment” for Parkinson’s that has shown a 99.6% failure rate. We also hear what you , our readers, are reading... and the American Consequences staff weighs in with the books that changed our lives. Finally, former CIA analyst Buck Sexton explains that as far as trade wars go, China’s exploitative policies and tariff threats shouldn’t be a surprise... We hope you enjoy the issue. Read our longer articles in a web format at www. americanconsequences.com. We’ve uploaded a PDF suitable for printing to our archive page. And tell us what you think at feedback@ americanconsequences.com. Regards, Chris Gaarde Assistant Editor, American Consequences

4 July 2018

From Editor in Chief P.J. O’Rourke

KNOWING write FROM left

LITERATURE HATES CAPITALISM. And the hating started while capitalism was still being invented – before “capitalist” was even a word – in Shakespeare’s The Merchant of Venice with its nasty portrayal of Shylock, the only worthwhile person in the play.

6 July 2018

LETTER FROM THE EDITOR

All the other main characters are rich lay- abouts, except for the titular merchant, Antonio, and he’s a fool. He’s going to loan his profligate friend Bassanio 3,000 ducats (something like half-a-million dollars) so that Bassanio can afford to date Portia. Meanwhile, Antonio’s business affairs are a mess. He’s cash poor because all his capital is tied up in high-risk ventures. He’s counting on huge returns from emerging market trading ventures. Shylock, a keen-eyed financial analyst, sums up Antonio’s investment portfolio: “He hath an argosy bound to Tripolis, another to the Indies... a third at Mexico, a fourth for England.” Libya, Southeast Asia, Mexico, and... England? What, exactly, is this Merchant of Venice merchandizing ? Looks to me like he’s trading in boat people, smuggled ivory, drugs, and... kippered herring? Anyway, it’s left to the sensible, hard-working, put-upon Shylock to do the banking for these idiots, and, if he gets carried away with his loan default penalty clause, who can blame him? Wide is the gate and broad is the way from Shakespeare’s Shylock to the Ebenezer Scrooge of Charles Dickens’ A Christmas Carol . The charge against Scrooge is merely that he’s a lonely old man who works too hard, pays the going wage, and is skeptical about the merits of private philanthropy. We hear nothing about the glories performed by his

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American Consequences 7

LETTER FROM THE EDITOR

Great Gatsby , a successful businessman is shown to be a howitzer among cap pistols, especially compared to the dribbling squirt gun of a narrator, Nick Carraway. Tom and Daisy Buchanan are trust-fund twits. Everyone else is a nonentity. It’s Jay Gatsby who throws the fabulous parties, has the great love affair, and spends piles of money so everybody else can have fun. That money came from somewhere. Probably from Gatsby’s intelligence and hard work. As to the money coming from bootlegging, we have only the worthless Tom Buchanan’s word to go on about that. And bootlegging requires intelligence and hard work too. Also, Fitzgerald would have been writing about the “Boring Twenties” if it hadn’t been for bathtub gin. There are, of course, exceptions to the rule of literature hating capitalism. There are novels, plays, and even poems about the blessings of individual liberty, the duties of personal responsibility, and the fact that private property is the foundation of human freedom. But these works are rarely taught in school. Maybe the teachers are afraid they’ll be accused of “selling out.” What the teachers should be afraid of is hearing, “Nobody’s buying what you’re teaching.” My college-age daughter managed to find a pro-capitalist work of literature on her own. I got a text from her: “I love this paperback I’m reading cause I got bored with my homework and it was laying around in the dorm lounge and it’s called The Fountainhead by somebody named Ayn (sp?) Rand and have you ever heard of her?”

accumulated capital – financing highways, canals, railroads, workshops, factories, business establishments, dwelling houses, and, perhaps, medical research into what ails Tiny Tim. In return for Scrooge’s beneficence to society, Dickens inflicts dreadful nightmares on him. (Although I’m not sure the apparition of Marley is as scary to Scrooge as Dickens wants it to be. Marley’s ghost is, after all, chained to Marley’s moneyboxes – so maybe you can take it with you.) Then, at the end of the story, Dickens still isn’t done torturing his innocent victim. He has Scrooge suffer a mental breakdown, a terrifying manic episode where Scrooge “... walked about the streets, and watched the people hurrying to and fro, and patted children on the head, and questioned beggars, and looked down into the kitchens of houses, and up to the windows, and found that everything could yield him pleasure.” Poor Bob Cratchit doubtless had to have Ebenezer confined to Bedlam. And off to the loony bin of anti-capitalism with you, too, F. Scott Fitzgerald. In The There are, of course, exceptions to the rule of literature hating capitalism... But these works are rarely taught in school.

8 July 2018

Soviet Union. The country hadn’t recovered from communism. (And much of it hasn’t yet.) The cities, towns, and farms were a gloomy, depressing mess. My wife grew up conservative. But until then she hadn’t been particularly interested in politics or economics. She took Atlas Shrugged along to read on the trip. And she kept glancing up from the book and looking out the train window and saying, “So that’s what happened to this country!” But if you prefer your dystopias set in the dank past, rather than the ghastly present or grim future, there’s...

THE FOUNTAINHEAD By Ayn Rand Personally, I find Ayn Rand somewhat heavy going, with a tendency to over-argue social, economic, and political ideas I’ve already got. But I’m not 20.

What a perfect book for a youngster during her sophomore year in the boring groupthink liberal-quibble, dull, squishy world of academia. The Fountainhead is wildly romantic. Genius architect Howard Roark – a sort of Frank Lloyd Wright with a libertarian hair up his ass – would rather pull the world down around his head than submit to the diktat of collectivist architectural mediocrity. In fact, given the fiery romance between Roark and Dominique Francon (Ayn in thin disguise), The Fountainhead is even a bit of a bodice-ripper. But what really gets torn to pieces is the communitarian socialized soft- headedness of the very kind my daughter is being exposed to. So she’ll also love...

A CONNECTICUT YANKEE IN KING ARTHUR’S COURT By Mark Twain

The manager of a New England factory, with all his mechanical and entrepreneurial skills, time

travels to the Middle Ages where ignorance, superstition, and a violent aristocracy rule. Also, everything turns out to be filthy dirty back then. The Connecticut Yankee shows the Knights of the Round Table how to keep their table from wobbling and another thing or two besides. Twain reminds his readers how much the world owes to free enterprise, ingenuity, reason, scientific inquiry, and all the other wonderful things that have happened since people escaped serfdom and slavery and became self-actuated and self-interested individuals.

ATLAS SHRUGGED By Ayn Rand It’s a little long-winded but has what’s probably the best plot premise ever – the geniuses of capitalist creativity all go on strike.

Twenty-five years ago, my wife and I took the Trans-Siberian Railroad across the former

American Consequences 9

LETTER FROM THE EDITOR

Twain’s fantasy makes progress a reality. However, if you insist upon realism, I recommend...

CAPTAINS COURAGEOUS By Rudyard Kipling

A spoiled young brat, scion of a railroad magnate (and, it so happens, about the age of my own son), is out on the fantail of a luxury liner puffing on an illicit cigar. He gets dizzy and sick, falls overboard, and is rescued by a fishing boat. The fishermen could care less who the brat’s father is. They’ve got fishing to do. And they won’t be back to port for months. If the brat wants a bunk and three meals a day he’d better learn how to fish. Capitalism is a coin with two sides. The brat knew about “heads” – capital. Now he learns about “tails” – labor. In the end, the

Or I can recite a nursery rhyme to him. I said there was pro-capitalist poetry, and I can prove it by quoting Ogden Nash (1902- 1971), perhaps the greatest author of light verse in the English language. Nash wrote the poem “One From One Leaves Two” in response to the New Deal: Abracadabra, thus we learn The more you create, the less you earn. The less you earn, the more you’re given, The less you lead, the more you’re driven, The more destroyed, the more they feed, The more you pay, the more they need, The more you earn, the less you keep,

successful dad rewards the fishing boat crew for saving his son. And the son is rewarded with an education in the kind of hard work that made his dad a success. I’m not saying my son is a spoiled brat. But after he reads Captains Courageous , if he does act like a spoiled brat, I can tell him, “Go fish.”

And now I lay me down to sleep. I pray the Lord my soul to take If the tax-collector hasn’t got it before I wake.

10 July 2018

FUNNY HOW NOTHING CHANGES

Library of Congress

The blessings of "protection" Tariffs “railroad” the general public – and they always did. Here’s editorial cartoonist Louis Dalrymple illustrating the point more than 117 years ago in America’s first humor magazine, Puck . High 19th century U.S. steel tariffs let American steel mills overcharge domestic customers for products such as railroad rails. Meanwhile those steel mills were selling the same products much more cheaply overseas. American consumers and British producers were both hurt. Only the pigs and the politicians (to the extent that there’s a difference) were on the gravy train.

American Consequences 11

THE BIGGEST STORIES THAT MATTERED FOR THE MARKET LAST MONTH

WHAT MOVED THE MARKET

The Fed is bullish on the economy and wants to maintain a healthy investment environment. COMMODITIES AND GLOBAL MARKETS LAG, BITCOIN RALLIES... Global markets have trailed behind the U.S. market. As trade-war noise fades, buyers have waded back into Europe and Japan, and Chinese markets have stabilized. But there has been a lot of technical damage done to the indexes, and absent a trade resolution, these markets will remain in limbo. A strong U.S. dollar, increased oil inventories, and news that OPEC and Russia were relaxing supply agreements has weighed on commodities like gold and oil. Copper has been hovering at yearly lows, and this is a direct proxy for Chinese demand (or lack thereof). Bitcoin twice held its $6,000 level before rallying 15% due to BlackRock’s consideration of bitcoin as a viable product for clients. THE MARKETS HAVE IGNORED GEOPOLITICS, BUT CONCERNS REMAIN... Earnings projections for the S&P 500 Index are rising, and the focus is shifting from this year’s multiple to next year’s. From a

THE BACKDROP FOR U.S. MARKETS REMAINS A FORTRESS... Second-quarter GDP projections expect growth of 4% to 5%, and second-quarter earnings forecasts are for 20% year-over-year growth. That comes on the heels of 24.8% growth in the first quarter. Over the past five years, analysts’ earnings estimates have been 4.4% too low at the outset of the quarter. So, by the end of this quarter, it’s reasonable to expect earnings growth closer to 24.4%. Unemployment remains at record lows, and more people are looking for jobs. Discretionary spending has picked up, along with stock buybacks and dividend increases. Trade skirmishes have continued to dominate the headlines, but the amount of goods targeted is minor considering the $19 trillion U.S. economy only imports about $2.4 trillion of goods per year. Investors believe that trade deals will be worked out, and the focus has remained on an economic climate that is still conducive to asset price appreciation. Technology has continued to lead. The combined market cap of the “FAANGM” group of stocks (Facebook, Amazon, Apple, Netflix, Alphabet, and Microsoft) is about the size of Japan’s GDP at $4.2 trillion. Financial

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valuation standpoint, the S&P 500 is trading at 15.96 times forward estimates. In historical terms, this is reasonable. Over the past five years, the average multiple has been 16.2 times.

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stocks have bounced back on decent earnings, steady interest rates, and a recent statement by the Federal Reserve that it’d back off raising rates if need be.

12 July 2018

EDITORS John Gillin Greg Diamond Scott Garliss

Dollar strength is a vote for the U.S. but it comes at a cost. Emerging market currencies and asset classes have been battered. These countries have borrowed in dollars, and with rates moving up its more expensive to pay down debt. But the bulls remain at the helm, and any positive updates on trade deals will be the next catalyst to move stocks to new highs. This number is closely followed to better understand the thinking for the future path of rate hikes. August 1 The Institute for Supply Management releases its Manufacturing, New Orders, Prices Paid, and Employment data. These are widely followed and judged to be important near-term barometers of economic activity. The data are based on the responses of 300 purchase and supply chain executives across the country. August 3 The Bureau of Labor Statistics releases its monthly update on job gains and the unemployment rate. Money managers are watching this gauge to judge the underlying fundamentals of the U.S. economy.

But we are nine years into the bull market, and recessions are inevitable. The yield curve is confusing as short rates move up and long rates – a measure of future growth prospects for the economy – have stayed subdued. The threat of an inversion is real, and the bears will tell you that every time this has happened in the past, it has been the precursor for an economic hiccup.

July 24 Markit releases its preliminary

manufacturing, services, and composite Purchasing Managers’ Index (PMI) data in the U.S. and the eurozone. This is a vital gauge for judging the state of global growth. July 27 The U.S. releases second-quarter GDP data. This is a key gauge for the health of the economy. It measures the value of domestic goods and services produced. Recent expectations have climbed as high as 5% versus 2% first-quarter growth. July 30 Core Personal Consumption Expenditures (PCE) data are released. This is the Fed’s key gauge for measuring inflation outlook.

American Consequences 13

WHAT COULD POSSIBLY GO WRONG?

Financial follies and disaster in the making

So what could China do next? The options range from the relatively benign to the potentially severe. China could block licenses for U.S. companies in the country, delay approval of mergers and acquisitions deals involving U.S. firms, or increase inspections of U.S. imports at borders. But if push comes to shove, China has more powerful options at its disposal... Namely, it could devalue its currency, the yuan, against the U.S. dollar. Weakening the yuan would make Chinese imports even cheaper, essentially negating the effects of the president’s tariffs. But this move could have significant consequences for China as well. If the yuan were to fall too far or too quickly, it could cause capital to flee the country. This is exactly what happened in the summer of 2015... And it ultimately helped trigger a sharp correction in both U.S. and Chinese stocks months later.

The trade war with China heats up...

Early this month, the White House imposed new 25% tariffs on up to $50 billion of Chinese imports. And President Donald Trump promised to respond to any retaliation with further tariffs on hundreds of billions of dollars’ worth of additional Chinese imports. While the initial round of tariffs focused on goods like steel and aluminum, the new tariffs were more targeted, affecting consumer goods like tuna, furniture, clothing, and electronic components. Although the administration wanted to limit the tariff’s impact on consumers, the variety of imports subject to tariffs has made that difficult, and China has once again promised to retaliate. But it’s unlikely that they’ll respond with further tariffs on U.S. imports... China doesn’t import enough from the U.S. to maintain a dollar-for-dollar fight.

14 July 2018

When asked whether he trusted the findings of U.S. intelligence, the president cited Putin’s “extremely strong and powerful” denial of political interference, with Putin adding that, “the Russian state has never interfered and is not going to interfere into internal American affairs, including election process.” Of course, the entire Trump-Russia news cycle is heavily politicized. But no matter who you believe, there is one point on which we should all be able to agree... The integrity of our elections and democracy is important, and any attempts to criminally undermine or create chaos in these institutions by a foreign nation should be investigated and addressed. And if the allegations against Russia are true, it wouldn’t be the first time... In 1984, the Kremlin was very interested in stopping the reelection of President Ronald Reagan... It even created the slogan “Reagan means war!” to help discredit him. The Soviets spread false stories about Reagan alleging militaristic tendencies, racism, and corruption. Despite their best efforts, Reagan was reelected in a landslide. Today, the available public evidence shows that Russian agents played a role in creating chaos prior to and during the 2016 Presidential election. Through the use of Twitter bots, fake Facebook groups, and hacked e-mail accounts, the hackers sought to create more discord in an already tense political landscape... What could possibly go wrong?

In fact, despite the risks, China may already be doing this. The yuan has been quietly falling versus the dollar since April, a move that’s gained momentum over the past six weeks. And of course, China still holds more than $1 trillion of U.S. Treasury debt. Under a worst- case scenario, it could choose the “nuclear option”... dumping the debt and potentially crashing the U.S. bond market. But we think this scenario is unlikely... It would hurt China as much as the U.S. But we also wouldn’t underestimate how far China might go to “save face” if it believes it has no other options. “Keep your friends close, but your enemies closer...” This week, President Trump met with Russian president Vladimir Putin at a historical summit in Helsinki... a meeting which has since become controversial for a few reasons. Initially, there was concern from both sides of the congressional aisle regarding the one-on- one nature of the meeting... Could Putin be held accountable for off-the- record promises? And was Trump adequately prepared to meet with Putin, a former KGB agent, without the assistance of aides or advisors? But that concern became dismay during a 45-minute joint press conference between the two leaders, with Trump repeatedly defending the Russian president and questioning the credibility of U.S. intelligence agencies.

American Consequences 15

FROM OUR INBOX

Re: Our Newest Readers Weigh In If impact is your intent, you’re doing a helluva job. – Chris W. P.J. O’Rourke comment: Thanks, Chris (I think). We urge readers to buckle their seatbelts; we’re on a collision course with “received wisdom.” Hello gentlemen, I get a lot out of your magazine every month and I just wanted to say that the “Coast” and the elites that inhabit it goes about as far as a 30-mile radius around a lot of big cities. I live in central/western Massachusetts and the culture differences and so forth are just as stark as if I lived in the middle of Iowa. Keep up the good work. – Alex K. P.J. O’Rourke comment: Alex, you’re so right. And even inside those big cities there are some “safe spaces” for Heartlanders. Your publication shows a high level of quality and it’s not regurgitating the tart subjects presented by MSM. Bravo. – Fabian H. P.J. O’Rourke comment: Fabian, when we get queasy, we turn CNN off! I make it a point to read most of your mag. – Don P. P.J. O’Rourke comment: And we make it a point to read most of your Inbox message.

Have read all critiques of your new magazine; and will tell you that those in California that are neither rich NOR famous nor liberal think it is funny, and “mostly” of a conservative bent. It is those of us that are neither rich, nor famous... that hate the state and are trying to get out. Unfortunately, because we are neither rich nor famous... our money is all tied up here; or we CANNOT make any money here because of the welfare system supporting illegals. Every day, I wake up and feel that I am supporting two families that I do not even know! – Lauran E.F. P.J. O’Rourke comment: Plus, supporting even one family that you do know can be a real pain in the neck (as I was saying to my cousin Mooky’s bail bondsman the other day). You’ve definitely struck on a very long overdue piece of information I as a “Coaster” have been wanting... Reported by critical thinking Journalists! Thank you for this production. – Yvonne D. P.J. O’Rourke comment: Congratulations, Yvonne! Now that you’re well-informed, you’re no longer a Coastal! I love American Consequences – great collection of important topics! – Mike L. P.J. O’Rourke comment: And we love you , Mike, for saying so!

16 July 2018

Send us a message, question, or criticism at feedback@americanconsequences.com

John Fedderke comment: In 1956, vice presidential candidate Richard M. Nixon was presented with a key to Toledo, which he referred to as a plastic key. That did not go over well here. Mayor Ollie Czelusta (where but Toledo could you get elected with a name like that?) took great exception and corrected Nixon by saying in The Blade , “This is not the plastic city. It is the Glass City, often also called the Glass Capital of the World…”

Re: Letter From Toledo, Ohio June issue of American Consequences To my delight as I read June’s issues I came across the Toledo, OH article. As a lifelong (37+ years) Toledo (Perrysburg actually) resident I was elated to read the excellent write up on my hometown. Thank you for the positive article on Toledo and its continuing improvement. Just a side note, we (Waterville Gas & Oil Company) are the oldest family owned natural gas utility in the Great State of Ohio. It was founded by my great-great grandfather R.G. Stitt in 1888. – M. Todd Black John Fedderke comment: One of the things I love about Toledo and the area is what a small community this is. Six degrees of separation are about three degrees in Toledo. My father owned a company in Waterville, Ohio which is a suburb of Toledo. He was good friends with, I assume, Todd Black’s grandfather. I served on the board of Maumee Valley Country Day School with the next generation of the Black family, Jamie. So here we are, united by the Internet. I respectfully take issue with your article by John Fedderke; “A Letter From Toledo, Ohio –Will a Rust Belt City Shine Again.” I am from a small city in Illinois that advertises itself as “The Glass Capital of theWorld” as well! Please have your author read this article and provide his response. – John M. from Streator, IL, The “REAL” Glass Capital of theWorld

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American Consequences 17

FROM OUR INBOX

That, plus the fact that Owens-Illinois, owner of the Streator glass plant referenced by John M., is headquartered here in Toledo causes me to stand by our fair city’s long-standing claim to be Glass Capital of the World. I’d be glad to sit down with Mr. M. to debate further over a cold bottle of Miller. Re: Who Do We Appreciate? & Only Stocks I’ll Teach My Kids To Buy June issue of American Consequences P.J., I’m enjoying the magazine, including your take on the Electoral College. Another good reason to have the EC is to make it harder to rig the election. If state X is totally corrupt, they can only at most get their max number of electors. But, with the popular vote, in a close election, the Dems, yes the donkeys, only need to pad the ballot in say, Chitown, or New York or Dallas, or Miami or any other corrupt locale that they own. Like 150% voter turnout. Of dead people. Actually, it looks like Hillary may have won the election if she would have got out and drank some beers in rural Michigan or Ohio. OBTW, the article by Porter Stansberry on investing with certain insurance co. Stocks was brilliant, have sent that one to some of my friends. Thanks for the advice and the humor! – Donald W. P.J. O’Rourke comment: Donald, you make an excellent point about the Electoral College as

a barrier against corruption. I wish I’d thought of that when I was writing my defense of the Electoral College. If I ever revise the essay, you can trust me to steal your brilliant insight! Re: The CityWas Silent June 13, 2018 issue of American Weekly Consequences You do have a short memory or just like to rewrite history like the “violent origins” of dreaded socialism. Socialism rose up because of a violent group of dictators who kept the masses poor with no voice... Reminds me of these “democratic” United States and our VIOLENT overthrow of a king for similar reasons. But our “democracy” has never been violent! Ha! Native American genocide, Mexican American War, Spanish American war, overthrowing numerous democratically elected governments around the world. The list is long. You may need to read some truthful history books. You speak as if the government is some unknown that always makes bad economic policies for the middle class. What a joke! Since the 1970s our government has been bought and paid for (and controlled) by the 1%. Their policies are specific to moving wealth from the masses to the rich 1%. And they have been very successful. – Anthony V.G. P.J. O’Rourke comment: Anthony, you and I will have to agree to disagree about the merits, if any, of socialism. But I do take your point that no position on the political spectrum has a monopoly on

18 July 2018

violence. Politics, of any stripe, does lead to oppression, which is why I favor a society that is as un-political as possible. I also don’t disagree that the 1% have done very well for themselves – maybe a little too well. Although I would place the blame for this on central bank “free money” policies that have shifted modern economics from material goods to financial goods – policies that have had support from both the Right and the Left. However, as to the 1% having “bought and paid for” our government... Gosh, what a white elephant they’ve purchased! We have let the left infiltrate our schools, colleges, workplaces, state and local government offices. This is the result. – Lee D. P.J. O’Rourke comment: Lee, I tend to concur. The only upside I can see to this is that schoolteachers, college professors, human resources executives, and state and local government officials tend to be the people nobody listens to . It’s when the Left infiltrates Mom and Dad – that’s when we’re in trouble. Close the schools. Instead, learn how to repair a lawn mower. If you crawl under the front of a John Deere riding mower, you might be pleasantly surprised to discover that the front axle is somewhat reminiscent of the one found on a Model T Ford. The Model T Ford was an important step in individual freedom. Add a mower cutting deck and you have individual responsibility. Add an enclosed heated and air conditioned Re: Apart at the Seams May issue of American Consequences

cabin, and you have a degree of individual dignity. Write a story about it, get it published, add a mortarboard, and you have the makings of an English Lit/Mech Eng. Degree of your own choosing. – John D. P.J. O’Rourke comment: I hereby award you a PhD, Dr. John! And funny you should mention lawnmowers... In April I took my 14-year-old son to an international space industry convention, the Space Symposium, in Colorado Springs. (See American Consequences , May 2018, “Adventure Nerds.”) My son would like to be an aerospace engineer. We met a highly respected aerospace engineer at the Symposium, and he gave my son exactly the same lawnmower advice! (Except he didn’t say “repair.” He just said “take it apart.” And now my grass is a foot high.)

Mick Stevens/The New Yorker Collection/The Cartoon Bank

American Consequences 19

20 July 2018

American Consequences 21

WALL STREET'S SUMMER READING

I

t’s that time of year again when Wall Street’s finest like to grab a beach chair and a good book and hit the beaches. I checked in with more than 100 finance professionals – traders, bankers, analysts, and hedge funders to see what’s on their summer reading list.

By Turney Duff

was seen as a Silicon Valley darling. Her startup, which promised to revolutionize the medical industry with blood testing, rose to a $9 billion valuation. It had a who’s who list of investors and one tiny secret – its technology didn’t work. So many of the people I spoke with were first in line to read up on the most prominent corporate scandal since Enron. John Carreyrou weaves an inside look at the eye-opening corruption, fraud, and deceit that fooled some of the best and brightest investors. The cautionary tale of entrepreneurship combines third-person narrative with investigative reporting. And the early feedback is that this book doesn’t disappoint.

BAD BLOOD: Secrets and Lies in a Silicon Valley Startup John Carreyrou Sometimes finance professionals like to get away from work-related topics when they dive into

a book. They get enough of that talk during the week, but some stories are too juicy to avoid. And Bad Blood is one of those stories. Most everyone on Wall Street is aware of the Theranos tale, where CEO Elizabeth Holmes

12 RULES FOR LIFE: AN ANTIDOTE TO CHAOS Jordan B. Peterson

While I didn’t ask anyone their political affiliation before polling them about what they’ve recently read, are reading, and will read in the near future, my guess is most of these selections came from people more conservative in nature. Canadian psychologist Jordan Peterson has become quite popular over the years – he’s an Internet celebrity, with some characterizing him as a controversialist. And 12 Rules fits into the self-help genre that uses advice from his clinical practice and stories from his personal life.

22 July 2018

of his life. So readers were eager to pick up his encore... For this book, he lived with monks who are world-renowned dog trainers/ breeders. In this ultrafast world that seems to be getting too hectic, Itzler moved into a monastery for a self-imposed time-out. It’s a spiritual journey like no other.

CALYPSO David Sedaris

David Sedaris is considered smart and funny – two things Wall Street loves. Although he’s too liberal for some, that didn’t stop many readers from

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TAILSPIN: The People and Forces Behind America’s Fifty- Year Fall – and Those Fighting to Reverse It Steven Brill Perhaps market, political, and cultural anxieties

buying his new book. Over the years, Sedaris has built a rabid fanbase who love his wit, emotionally rich stories, and like to partake in his sometimes-crass observational humor.

LIVINGWITH THE MONKS: What Turning Off My Phone Taught Me About Happiness, Gratitude, and Focus Jesse Itzler Full discloser, I’m friends with the

are prompting people to pick up a copy of Steven Brill’s new book. Even though everyone I spoke with is on the more desirable side of income inequality, it’s a topic that fascinates. Tailspin is a deep dive into what happened to America over the past 50 years, a question on a lot of people’s minds. “America has increasingly become a Moat Nation, producing a parade of unfair advantages for those with the resources to deploy the knowledge workers to build and fortify their moats while contributing to the overall decline of the country.” Brill goes into everything, including politics, business, and culture, and he even explores plausible solutions at the end of each chapter.

author and play a small role in the book. I’m the guy who picks him up at the airport and drives him to the monastery in my filthy, multi-dented Honda Civic. And many of the people I spoke with are friends/fans of Jesse Itzler from his many years of living in the city and reading his first book Living With a SEAL . For that one, Itzler had one of the baddest men on the planet, an ex-Navy SEAL, move into his home for 31 days to get in the best mental and physical shape

American Consequences 23

WALL STREET'S SUMMER READING

MEASUREWHAT MATTERS: How Google, Bono, and the Gates Foundation Rock the WorldWith OKRs John Doerr When a book gets a blurb from Bill Gates, it usually catches the attention of Wall Streeters far and wide: “I’d recommend John’s book for anyone interested in becoming a better manager.” It also doesn’t hurt when the author was an original investor and board member at Google and Amazon. So it wasn’t surprising to hear that many of the finance professionals are cracking open this book. There’s usually a constant drive to get better and make more money in the industry. John Doerr explains how “OKRs” (Objectives and Key Results) can help leaders achieve their goals. He also explains how he learned this concept from Andy Grove at Intel in the 1970s.

and potential treatment... There’s new hope suggesting psychedelic drugs can help with depression, PTSD, anxiety, and fear.

HOWTO CHANGE YOUR MIND: What the New Science of Psychedelics Teaches Us About Consciousness, Dying, Addiction, Depression, and Transcendence Michael Pollan

WHEN LIFE GIVES YOU LULULEMONS LaurenWeisberger New York Times bestselling author Lauren Weisberger brings back her character Emily Charlton from The

Brain science isn’t usually at the top of the Wall Street nonfiction list, but How to Change Your Mind isn’t your run-of-the-mill scientific research book. The author experimented with mushrooms, LSD, and other psychedelics while researching this book. It’s a fascinating journey into psychedelic drugs and aims to determine whether psychedelic drugs can rework your worldview. And Michael Pollan delves into the field of mental health

Devil Wears Prada . And it’s inspired many to purchase her latest book. Some have labeled the novel as “chick lit,” but it checks all of the summer reading boxes like fun, easy, and relaxing – perfect for the beach.

24 July 2018

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billion in today’s dollars. On Oct. 1, 1908 the first Model-T was introduced. And the shift from coal to oil began in earnest. But decades before, John D. Rockefeller saw this shift coming and started Standard Oil in 1870. Standard grew so large it controlled 91% of all oil production in the country.

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WHICH EVERY INVESTOR SHOULD READ Serious investors care about more than the markets. They care about the freedom that makes those markets work, and the wisdom behind that freedom. Serious investors also care about the things that threaten market freedom – such as foolish politics and ideology. Having investments is like having kids. You want them to grow and prosper, with liberty and responsibility. You don’t want them ruined by bad ideas... like getting a face tattoo. But being a serious investor often means a lot of reading. Sometimes it seems like you need a 48-hour day and an eight-day week to peruse all the research and analysis that’s available. Today, I’m going to suggest that you do even more reading – reading that won’t make you a penny... (But may save your sanity.) BOOKS THAT AREN'T ABOUT INVESTING

By P.J. O'Rourke

26 July 2018

one After a decade of “stagflation” and idiotic economic policies

Free to Choose By Milton and Rose Friedman Nobel Prize-winning economist Milton Friedman (1912- 2006) possessed the wisdom behind market freedom. He was the 20th century’s leading academic theorist of free-market economics.

from Presidents Richard Nixon, Gerald Ford, and Jimmy Carter, America was suddenly exposed to clear, concise common sense about what market freedom means. It means every freedom we

But Free to Choose is a book for the general public written with his wife Rose, also an economist and with a degree in philosophy, too. The Friedmans explain why the free market is good for the rich, the poor, minorities, majorities, the disadvantaged, and those who (as politicians tell us) have so many advantages that regulatory agencies and the IRS need to take some away. The free market is not good for politicians. The free market distributes power to individuals. Politicians want that power for themselves. Free to Choose originally accompanied a 10-part PBS series of the same name, which began broadcasting in January 1980.

have. Freedoms are physical things. All the physical goods and services of the world (including freedom of speech and belief ) are traded in a marketplace. “If,” the Friedmans say, “an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it.” That’s the free market. When the market isn’t free, the exchange may not be voluntary. The exchange could take place under threat of force, even though you know you won’t benefit from it. You could be sold into slavery. The second message of Free to Choose is that

CLICK HERE TO READ THEWEB VERSION

American Consequences 27

us to do. In the free market all parties are unanimous about the deal being a good deal. In the un-free market, produced by government threat of force, somebody’s being coerced: The ballot box produces conformity without unanimity; the marketplace [produces] unanimity without conformity. That is why it is desirable to use the ballot box... only for those decisions where conformity is essential. The third message is that economic “fairness” is equal parts sham and danger: A society that puts equality of outcome ahead of freedom will end up with neither equality nor freedom. The use of force to achieve equality will destroy freedom, and the force, introduced for good purposes, will end up in the hands of people who use it to promote their own interests. The Friedmans use a number of public- policy issues, current in 1979, to make their points. Every one of those issues is still with us and causing more trouble than ever – cradle-to-grave welfare programs, pollution (as “climate change” was called back then), consumers’ rights, income inequality. There’s a chapter titled “What’s Wrong With Our Schools?” and another – about to become all too relevant again – called “The Cure for Inflation.” Free to Choose was written almost 40 years ago, but instead of seeming out-of-date it reads like something you hope somebody will write tomorrow.

In the free market all parties are unanimous about the deal being a good deal. In the un-free market, produced by government threat of force, somebody’s being coerced. we should avoid, as much as we can, all kinds of government interference in free markets – including (and sometimes especially) “beneficial” government interference. We live in a democracy, and, because we freely elect the people who govern us, we may think that government actions are extensions of our own freedoms. The Friedmans warn us to be careful about thinking that way: Every accretion of government power for whatever purpose increases the danger that government, instead of serving the great majority of its citizens, will become a means whereby some of its citizens can take advantage of others. And don’t think poor people are the exception: The poor tend to lack not only the skills valued in the market, but also the skills required to be successful in the political scramble for funds. Even when we have “good government” we’re giving up our individuality. We have to conform to what the government tells

28 July 2018

The Road to Serfdom By Friedrich Hayek

Austrian-born economist Friedrich Hayek (1899-1992) was another powerful advocate of free markets. He saw central planning as the greatest threat to economic liberty and argued that the danger exists whether the central planners

Hayek points out the stupidity of these promises: There is an infinite number of good things, which we all agree are highly desirable as well as possible... That these things cannot all be done at the same time... can be appreciated only

are dictators in China, bureaucrats in Europe, or Democrats and Republicans in Congress and the White House. You can see the threat in the name of the thing. “Central” means that the decisions we make about working, spending, saving, investing, and minding our own business (and businesses) won’t be made by us. We’re scattered all over the place. Those decisions will be made in a central place, such as Washington. What will the politicians and political appointees in charge of that centralization do? They’ll plan how we work, spend, save, invest, and do business. We’ll be told what to do, how to do it, and where the benefits of our labors will go. We’ll become our government’s serfs. Politicians claim that central planning is necessary because we face a lot of problems and government is the biggest and most effective tool to fix those problems. The hazard in making politics the way to fix problems is that once politicians start promising to fix problems, they have to promise to fix every problem. (Just listen to any candidate running for Congress this year.)

by a painful intellectual effort. Our politicians can be accused of a lot of things, but making “a painful intellectual effort” is not one of them. We individuals, on the other hand, don’t have to think hard to know that Hayek is telling the truth. We can look in our bank accounts. Another case that’s made for central planning is technocratic. Government will get things done by putting experts in charge, by delegating centralized power over various aspects of life to the most eminent specialists in each field. Hayek demolishes this notion: There could hardly be a more unbearable – and more irrational – world than one in which the most eminent specialists in each field were allowed to proceed unchecked with the realization of their ideals. Hayek admits that economic freedom can cause difficulties. He says, “In a competitive society most things can be had at a price – though it is often a cruelly high price we have to pay,” but the alternative to paying a high price isn’t free goods and services...

American Consequences 29

The alternative is obtaining what we need and want from a political authority issuing “orders and prohibitions which must be obeyed.” And, says Hayek, “in the last resort” our needs and wants will depend on “the favor of the mighty.” The “mighty” will, of course, claim that they’re using their power in the interest of social justice. This means they’ll need more power. As Hayek says: Once government has embarked upon planning for the sake of justice, it cannot refuse responsibility for anybody’s fate or position... There will be no economic or social questions that would not be political questions. Even your SAT scores will be federally mandated. As Hayek notes, government overreach inexorably results in bad government: ...neither good intentions nor efficiency of organization can preserve decency in a system in which personal freedom and individual responsibility are destroyed. And bad government leads to worse government: ...equality before the law is in conflict, and in fact incompatible, with any activity of the government deliberately aiming at material or substantive equality of different people... distributive justice must lead to destruction of the Rule of Law. The laws of our country may remain the same under central planning, but the rules and regulations will proliferate – even more than

they have already. Instead of a nation obeying “the rule of law” we’ll live in a nation obeying “the law of rules”... The difference between the two... is the same as that between laying down a Rule of the Road, as in the Highway Code, and ordering people where to go. And democracy is no guarantee that we’ll avoid tyranny: ...it is not the source but the limitation of power which prevents it from being arbitrary. The sphere of politics will expand to encompass all of life. The only way anybody will be able to get ahead (or stay afloat) will be to depend on politics. As Hayek asks, “Who will deny that a world in which the wealthy are powerful is still a better world than one in which only the already powerful can acquire wealth?” Hayek wrote The Road to Serfdom in the midst of World War II, when the planet was beset by freedom-murdering ideologies – German Nazism, Italian and Spanish Fascism, Japanese Imperialism, and Soviet Communism. Hayek predicted that these would be defeated. But he worried that another threat to liberty lay ahead in Britain’s Labor Party, FDR’s New Deal, and the political coalitions that would impose welfare-state “social democracy” on post-war Europe. Hayek dedicated his book “To Socialists of All Parties.”

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