American Consequences - April 2019

A Debt Jubilee

The Debt Trap

Green New Deal



E D I T E D B Y P . J . O ’ R O U R K E



APR I L 2 0 1 9


T he good times can’t last forever. A major bear market is coming. And probably sooner than you think. The warning signs are everywhere. And it frankly doesn’t matter which one straw finally breaks the camel’s back. The possible triggers are endless… Trade Wars… Interest Rate Hikes… Brexit… the Russia investigation… Unsustainable Government Debt… the Corporate Debt Bubble… the Student Debt Bubble… Subprime Auto Loans… the End of QE… the China Collapse… a Corporate Fraud Like Enron… Overvalued Big Tech… Rising Socialism in America… Slowing Global Growth… War with North Korea, Venezuela, China, or Iran… Algorithmic Trading… Health Care Debt… Mean Reversion… Job Automation… Zero GDP Growth… Economist John Hussman predicts the S&P 500 will fall as much as 60%, beginning in under two years. But you don’t need to predict the exact day it will arrive. What matters is – when it does, it will already be too late to protect your wealth. Your investments – and retirement savings are on the line. Legendary investor Jim Rogers (co-founder of the Quantum Fund) believes the next bear market will be worse than anything in our lifetimes.  Worse than 2008.  Worse than the 2000 NASDAQ crash.

 Worse than 1987.  Maybe even worse than 1929… Legendary investor Jim Rogers (co-founder of the Quantum Fund) Rogers is prepared. Andyoucanbe too. On May 15th at 8:00 PM Eastern… Join Jim Rogers and Stansberry Research for a special one-hour, live online event on exactly why the next crash will be worse than anything we’ve seen before… And – more importantly – exactly what to do right now to prepare. The Bear Market Survival Event (featuring Jim Rogers) is 100% free of charge. But you must reserve your spot to attend. Simply go to:

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APRIL 2019 : ISSUE 23








4 Inside This Issue

52 Green New Deal




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

56 Cutting to the Bone BY BILL BONNER

Editor in Chief: P.J. O’Rourke Editorial Director: Carli Flippen Publisher: Steven Longenecker Assistant Managing Editors: Chris Gaarde, Laura Greaver Creative Director: Erica Wood Contributing Editors:

11 A Ray of Hope from a Sad Place BY P.J. O'ROURKE AND AIDAN SILITCH

62 Trick Quiz: For 2020 Democratic Presidential Candidates BY P.J. O'ROURKE

14 What Could Possibly Go Wrong?

64 The Debt Trap


16 From Our Inbox

70  Bipartisan Attacks on the Second Amendment BY RON PAUL 74 Modern Monetary Nonsense BY KENNETH ROGOFF 78 This Time Really Is Different BY CHRISTOPHER SMART

20 A Debt Jubilee Is Coming to America BY PORTER STANSBERRY

Bill Bonner, Mike DiBiase, Andrew Ferguson, Alice Lloyd, Bill McGilton, Geoff Norman, Ron Paul, Kenneth Rogoff, Buck Sexton, Christopher Smart, Porter Stansberry Newswire Editors: C. Scott Garliss, John Gillin, Greg Diamond Cartoon Director: Frank Stansberry General Manager: Jamison Miller Advertising: Jared Kelly, Jill Peterson Editorial feedback: feedback@

28 Dumb Money


30 Committee Brain BY P.J. O'ROURKE

34 One Default From Disaster BY MIKE DIBIASE

82 Book Grump

84 Read This

40 Degrees of Difficulty BY GEOFF NORMAN


46 Red Scare

86 The Final Word



American Consequences



T his month, we’re revisiting a topic you can’t mention in polite company, but also can’t seem to escape... politics. Whether you’re all-in for Trump or batty for Beto, the politics of the 2020 presidential election have the potential to become something more explosive and divisive than we’ve ever seen before... A clash between socialists, populists, and those of us who know a bad deal when we see it... regardless of party or politics. Editor in Chief P.J. O’Rourke explains why playing politics is a zero-sum game... offers two simple but important lessons on why government doesn’t work, no matter who runs it... and has a quiz for aspiring 2020 Democratic candidates... Featured contributor Andrew Ferguson shows us the absurdity and flaws of AOC’s Green New Deal... Best-selling author Bill Bonner takes a knife to our crony capitalist system... Journalist Alice Lloyd reports on the recent surge of support for Democratic Socialist candidates among millennials today...

Analyst and editor Bill McGilton warns that today’s record-high consumer debt could be the catalyst for the next bear market... while author Geoffrey Norman turns a critical eye toward the debt pipeline that is higher education... Congressman Ron Paul takes Congress to task for a recent gun control vote... Former CIA analyst Buck Sexton tells us what’s in store if the Democrats take 2020... And our resident anonymous Book Grump reviews and rips some books by a few 2020 candidates who really, really want your vote... and probably shouldn’t get it... We’ve uploaded a PDF suitable for printing to our archive page. And tell us what you think at feedback@ Regards, Steven Longenecker

In politics, only one side can win. Which is bad. But what’s worse is this means there have to be sides...

P.J. O’Rourke


April 2019


Why American Families Are Moving to Safer Ground

Every major political and economic forecast Doug Casey made over the last three decades came true… From the dot-com bust... to the credit and housing bubble in October of 2006... to the 2008 meltdown. Doug even predicted the fall of the Soviet Union and correctly forecasted Brexit before it came to a vote. But nothing comes close to Doug’s new fore- cast for 2019-2020. As he puts it, a major political coup is unfolding on American soil… that will topple Donald Trump’s presidency… And give rise to a new socialist state. The stock market as we know it could lose nearly 40% of its value and a major recession could wipe out the wealth of hard-working Americans. Just like Venezuela… The general cost of living — including medication — will be out of reach for boomers, retirees, and even seniors… Medicare and Social Security payouts will be cut in

half to fund new welfare programs. Food prices will shoot sky high. In fact, major brands like Kellogg’s have warned prices will increase by 12%. It’s my sincere hope you and your family survive what’s coming. But only those who prepare will be able to live in peace in a new socialist America. How do you do that? And who is Doug Casey? Watch this video to find out, and hear Doug Casey lay out the simple steps you can take right now not only to protect your assets… But ensure you have what you need to survive when the next recession and socialism hit high gear. Fair warning: These are not steps you should take while socialism is in full swing. You have to implement these steps before —which is now. There isn’t much time left. So I suggest you move quickly so you’re one step ahead.


From Editor in Chief P.J. O’Rourke




April 2019


F or people like me who consider themselves to be libertarian, the 35- day “government shutdown” at the beginning of this year was a real be-careful- what-you wish-for moment. What I had in mind was more like cabinet members and congressmen going to the payday lender, senators sleeping under bridges, and the president of the United States selling his wife’s Manolo Blahniks on eBay to pay the Domino’s delivery boy at state dinners. Instead, what we got was very crabby unpaid TSA agents who would have done a strip search on me right in the middle of the airport if there hadn’t been a whole line of people at the security checkpoint begging not to see me naked. We got Yellowstone National Park rangers pawning the bears to make car payments. National Gallery curators chalking pictures on the sidewalk hoping somebody would drop a quarter in their hats. Grade-school field trips to Washington where the closest the kids got to a tour of the Capitol Building was looking at a picture of it on the back of the $50 bills that lobbyists charge per minute. Because lobbyists weren’t closed for business. And neither were the other high muck-a- mucks who actually move the levers and work the pulleys of government – the Earls of Entitlement Spending, the Dukes of Deficit, the Nabobs of National Debt, the Magnates of Un-funded Mandates.

Government shutdown? Our government is so bad at doing everything that it can’t even do nothing right. And how did our government get so bad? Bad politics. But how did our politics get to be so bad? Simple. Politics grew worse because politics grew. Sometimes when things grow it’s good – like when the grown kids finally move out of the house. But sometimes when things grow... It’s a growth ... It’s a tumor... Right now, we have a gigantic political tumor. And I’m not optimistic about the biopsy. The growth of politics is the opposite of the growth of liberty. The growth of politics kills the growth of liberty. When liberty grows, we get the expansion of free enterprise and free markets. We create more goods, services, and benefits to society. The pie gets bigger. But politics is not about creating more goods, services, and benefits to society. Politics is about dividing them up.


When liberty grows, the pie gets bigger. When politics grows, the slices get smaller.

American Consequences



When liberty grows, the pie gets bigger. When politics grows, the slices get smaller. Politics is all about promising things to people. “The auction of goods about to be stolen,” as H.L. Mencken famously put it. The promises are lies, of course. But it isn’t just the untruth of a lie that matters. The size of the lie matters, too. When the political system is small, it promises a few things to a few people. Naturally they’re disappointed. But it’s just a few people, just a small number of beggars at the polls looking for political handouts. And if they go away with a dime when they thought they were going to get a dollar, no big deal. (Or should I say, “New Deal”? Or “Fair Deal”? Or “Great Society”?) We survived those growths of the political system... if just barely. But when the political system expands to the truly amazing, incomprehensibly enormous size of our political system... things are different. Our political system has grown to the size where it promises everything to all of us. And everybody is disappointed. Everybody goes away empty-handed. Everybody feels cheated. Does this make us mad at our political system? Yes. But mostly it makes us mad at each other – angry at the other people who are competing for the government’s largess. Because politics is a zero-sum game the way freedom and free markets are not. Zero-sum games are not played for kicks and giggles. Zero-sum games are blood sports.

The promises are lies, of course. But it isn’t just the untruth of a lie that matters. The size of the lie matters, too.

Yes, there’s competition in the freedom of free markets. That’s what makes them work. Competition is the vermouth in the martini. But as it is with martinis, so it is with free markets. For every one part competition vermouth, there are six parts of that top-shelf gin called spontaneous cooperation among free people. (Which always seems to leave politicians “shaken, not stirred.”) Adam Smith pointed it out, 243 years ago: Among free people, in a free market exchange of goods and services, everyone comes out ahead. Each person gives something he or she values less in return for something he or she values more. Both sides win. You’ve got the olives. I’ve got the cocktail shaker. Bottoms up! But in politics, only one side can win. What’s at stake in politics isn’t goods and services – it’s power. Power is always zero-sum. When I sell you goods and services I gain something in return. When I sell you power over myself – and that’s what the political exchange is all about – I lose everything. Under the condition of liberty, if you have a swimming pool and a Bentley, I can get a


April 2019

swimming pool and Bentley too. Under the condition of politics, you can drown me in your swimming pool and run me over with your Bentley. In politics, only one side can win. Which is bad. But what’s worse is this means there have to be sides... Faction – angry partisan faction – isn’t just a byproduct of politics, it is politics. Politics cannot exist without faction. Politics cannot exist without people fighting each other. Put down the free market goods and services pie... Pick up the pie knife of politics. Freedom and free markets bring us all together in the marketplace... Politics carves us up. Politics pits us against each other. Politics turns us into warring tribes. Politics hands us the spear of outrage at the slightest perceived slight to our primitive clan, smears us with the war paint of identity politics, gives us the shield of political correctness, and tells us that we’re not naked savages squatting around a smoldering fire of resentment and envy, but that we’re Noble Social Justice Warriors. Politics pits one ethnic group against another. And it does it for free. It doesn’t even charge us the way 23andMe or do. Politics pits men against women – as if we didn’t have the institution of marriage doing a fine job of that already. Politics pits immigrants against... against whom ? We’re all immigrants in this country. Even Native Americans came across the land

bridge from Siberia saying, “See you later, freezing Siberians with your itchy wooly mammoth long underwear and mastodon meat on your breath. We’re off to the beautiful Pacific Northwest – beachfront property, split-level wigwams, and salmon frying on the backyard barbeque grill!” Finally – and most dangerously – politics pits one generation of Americans against another. The millennials are mad at the Baby Boomers for soaking up all the Social Security and Medicare gravy while, at the same time, refusing to retire, leaving the millennials to work in a “gig economy” where they make a living by driving each other around for Uber. There are now more millennial voters than there are Baby Boomers. And they’ve got Uber to take them to the polls while the rest of us are still trying to figure out how that app works. The kids love Bernie Sanders. Not because of his youthful good looks, but because Bernie and his Elizabeth Warren, Kamala Harris, Cory Booker, and Alexandria Ocasio-Cortez ilk have convinced the kids that they can’t get more unless they use an expanded political system to take more away from... everybody reading this. According to a poll conducted by BuzzFeed, almost half of millennial-age Democrats identify themselves as “democratic socialists.” And according to a recent Gallup poll, nearly 60% of all Democrats have a favorable opinion of socialism. But can’t these voters see how a vastly expanded political system has enormous unsustainable costs?

American Consequences



Politics, by its own internal logic, is driven to expand. Yet politics fails because it expands. “

No. Not when that truth is obscured behind the obscene bulk of politics. Politics, by its own internal logic, is driven to expand. Yet politics fails because it expands. Politics is like a balloon. Think of politics as an inflatable latex item like... um... like the inflatable latex item us guys all carried in our wallets (more in hope than in expectation) when we were sixteen. Politics at that scale can be a kind of “useful safeguard to liberty.” And even then, it doesn’t always prove reliable. A shotgun marriage may ensue. But, if you make like a politician instead of a Romeo and blow a lot of hot air into that inflatable latex item, it gets very fragile. Actually, with politics it’s worse than fragile... It has the potential to be tragic. When you over-inflate politics, you can start out with a Trojan, safe and secure in a little foil pack of Constitutionalism, and wind up with the Hindenburg. “Oh, the humanity!” Socialism? It’s been tried. And tried and tried... We now have a proven track record of how socialism goes. A track record that is more than a century long as of the November 7, 2017, 100th anniversary of the Russian Revolution. That went well. So how is it that so many young, fresh, new Democratic voters and so many not-so- young – but full of fresh, new ambition – Democratic politicians are suddenly in love with socialism?

There’s a joke that libertarians have been e-mailing each other, a joke that explains the way our millennial “democratic socialists” fail to understand the danger – the fatal danger – of socialism. A libertarian walks into a bar at 9:58 p.m. and happens to sit down on a barstool next to Alexandria Ocasio-Cortez. The libertarian stares up at the bar’s TV screen as the 10 o’clock news comes on. The news crew has its camera on a man on a ledge of a tall building, getting ready to jump. Alexandria looks at the libertarian and says, “Do you think he’ll jump?” the libertarian says, “I bet he will.” Alexandria says, “Well, I bet he won’t.” The libertarian puts $20 on the bar and says, “You’re on.” Just as Alexandria puts her own money on the bar, the man on the TV screen does a swan dive off the building and falls to his death. Alexandria is very upset but she hands her $20 to the libertarian, saying, “OK, here’s your money.” The libertarian says, “I can’t take your money. I saw this earlier on the 5 o’clock news, and I knew he would jump.” Alexandria says, “I saw it too. But I didn’t think he’d do it again .”


April 2019


If you have ordinary kids the way my wife and I do – ages 15 to 21 – it’s easy to dismiss their political thinking. They seem to have a “progressive” herd mentality with all the predictable opinions on all the predictable issues, a tendency to take easy offence at anyone (parents!) perceived to be conservative, and a penchant for getting their news and views from social media. Or so we imagine. We’ve just found out that there’s more going on in kids’ heads than we’d thought. Unfortunately, we found out in the saddest possible way. Aidan Silitich, 17, was right in the middle of our children’s age cohort and best friends with all of them. Our families are close. The kids had known Aidan all their lives and spent every summer, holiday break, and hundreds of weekends in the company of him and his siblings Kyra and Owen. Then on March 21, Aidan died in a skiing accident. The grief is impossible to express. Aidan was not, in fact, an ordinary kid. He was an exceptional athlete – a brilliant rock- climber who successfully competed around the country, traveling to the Nationals in Bend, Oregon, and to other professional competitions. He’d recently made his first final in Albany, New York.

Aidan was brave, resilient, generous, and compassionate. He was also whip-smart, fierce, and funny. He had an infectious smile, loved to laugh, and – in a way that teenagers seldom do – he looked out for the underdog, made the unsure feel sure, and inspired confidence and a sense of well-being in others. But in one respect Aidan was ordinary – that is, we all assumed he was. He seemed to have the usual “kid progressive” political outlook, argued that side of things with the grown-ups, and went to a private school in New York where not being this type of usual would be considered very unusual indeed. However, his heart-broken parents re-read the articles that Aidan had written for his school newspaper. And they found the following essay. He was only 15 when he wrote it. Knowing how much we loved Aidan and how much we’d appreciate what he’d had to say, Aidan’s parents, Nick and Regina, sent the article to our family. I print it here, partly as a memorial to the kind of young man that we could have used 70 or 80 more years of, but also to show that there is a ray of hope in how young people think – even though this gleam comes from a sad place. – P. J. O’R.

American Consequences


THE SHEER LACK OF DIALOGUE AIDAN SILITCH Opinion and Humor Editor October 2, 2017

I f you’ve had the summer I had, then I’m sure you’re mentally exhausted. The amount of political tension in the air was (and still is, mind you) palpable almost to the point of discomfort. I found myself getting headaches when I heard about conservatives and liberals clashing over events ranging from monument removal to repealing the Affordable Care Act. What stood out to me about these protests was the sheer lack of dialogue happening during them. The two political parties never ONCE sought to start up a dialogue. Instead, they resorted to violence and loud screaming. Not once did either side seek to understand the other. One example comes from the UC Berkeley protests against Milo Yiannopoulos. Protests grew violent after enraged students started breaking windows and lighting fires around the UC Berkeley campus. Instead of letting him speak to the very small niche of far right extremists at the UCB campus, they prevented him from speaking as a whole. The fact is, you may not like what people are saying, but you have to let them say it. The biggest problem that our country faces today is Republicans’ lack of understanding for Democrats, and vice versa.

This type of political insensitivity is the issue I see with many people at [name of Aidan’s school]. We are willing to talk to anyone regardless of the color of their skin, their sexual orientation or religion, but we shut down the moment they express a different political opinion than we do. Neither party has ever sought to extend an olive branch to the other side to understand their point of view. This is where [our school] fails in preparing us for the outside world. Because we live in the [school] bubble, we have no idea of how to deal with people who have varying beliefs. Any time someone stands against our ideals, they are either too scared to speak up, or are bashed on social media. Personally, I blame the advent of social media for these immature and childish Facebook updates and Instagram posts. For starters, it is never okay to make someone feel to be less because of their political beliefs. Someone’s political opinions are a product of the household they grew up in and the values that their parents instilled in them at an early age. The fact is, shunning someone because of them won’t help with understanding and dialogue. It has become too easy to bash people online, instead of to their face. Talking in person has


April 2019

been replaced by snarky Instagram posts and down right aggressive Facebook comments. This prevents a dialogue, and more importantly understanding and education, from happening. Sadly, this small-mindedness is what causes assumptions to be made. For example, someone who voted for Donald Trump is not automatically a racist. While, yes, the far right has used him as an excuse for their xenophobic and disgusting rhetoric, others voted for him because they might have thought that he would be able to revive the rustbelt region of the United States and better secure their jobs and livelihood. The lack of understanding is also why the art of compromise is dead. In Congress, our congressmen and women never seek to talk to the other side about pressing issues. This just creates political gridlock, and prevents things from ever getting done. While there are some things that should never be compromised on, such as the advancement of civil rights, we have to see that some policies could be amended to serve more people, and more importantly keep the policies inclusive and fiscally responsible. Now, I am under no circumstances saying that you need to go out and hug everyone who does not share your same political opinions. I am just saying that we need to start a dialogue with those who are on different political planes than we are. If not for ourselves, then for the future generations of Americans.

American Consequences



Financial follies and disaster in the making

Despite his earlier grievances with the Fed’s tightening policy, it seems the president is no longer satisfied with the Fed halting rate hikes and ceasing its quantitative tightening program. He now wants the Fed to begin actively easing again and start lowering rates. At an April press conference, Trump said the Fed “really slowed us down” in regard to economic growth, and that “there’s no inflation.” “I think they should drop rates and get rid of quantitative tightening,” he continued. “In terms of quantitative tightening, it should absolutely now be quantitative easing... You would see a rocket ship. Despite that, we’re doing very well.” In short, Trump wants the Fed to return to its most aggressive crisis-level measures simply to boost an already strong economy... an economy that he himself has called “the greatest in U.S. history.” But many regard a return to quantitative easing today as somewhat shortsighted and foolish...

The ‘worst mistake’ of the Trump presidency...

In November 2017, President Donald Trump handpicked Jerome Powell to lead the Federal Reserve, eventually replacing Janet Yellen early last year. It was a strong start to their relationship, but the Trump-Powell honeymoon was brief... Last October, the president said the Fed was “out of control” for continuing to raise interest rates. A month later, Trump followed that up by saying he was “not even a little bit happy” about nominating Powell as chairman and suggested it was among the worst mistakes of his presidency. At the time, it looked like Powell got the message... After 11 months of raising the federal funds rate in an attempt to curb inflation (a policy known as quantitative tightening), Powell announced a sudden reversal. The planned rate hikes for 2019 were no longer certain... and the White House has been relatively quiet about the Fed ever since. Until this month...


April 2019

Sure, easing today could give the current bull market a bit more room to run... But it would only worsen the fallout when the inevitable bust arrives, leaving the Fed with even less “ammunition” in an economic crisis. But we’re not the only ones who think easing would be a mistake. In 2011, Trump tweeted, “The Fed’s reckless policies of low interest and flooding the market with dollars needs to be stopped or we will face record inflation... “ In February 1968, the first Boeing 737 entered airline service. Designed to be a shorter, lower-cost twin-engine alternative to airplanes at the time, the 737 series grew to become the highest-selling commercial jetliner in history. In the last 50 years, the overall structural design of the 737 has changed very little. Sure, it’s been updated as technology has advanced, but it’s more or less a “living fossil” of the industry... A design that’s stood the test of time and even outlived newer jetliners long since retired... and a design that’s at the root of Boeing’s current troubles. By now you probably know the story... In 2011, facing pressure from rival Airbus, Boeing decided to upgrade the engines on its 737 rather than design a new aircraft... a change that ultimately led to the installation of the problematic anti-stall MCAS software at the heart of the recent crashes. Boeing has promised to upgrade its MCAS A bad month for Boeing...

software and install a previously optional “warning system” in all of its affected 737s, but even that’s not going as planned. After failing to meet the FAA’s April 1 software deadline, Boeing said it needs more time... Using a practice known as “non-advocate review,” Boeing employees not involved in the project were tapped to test and vet the new software. According to unnamed sources at the company, a problem came about during this process but the specifics are unclear. What we do know is that the 737 Max is Boeing’s best-selling jet. Grounding the planes has left the company with halted deliveries and a stockpile of finished 737s... all of which are still running on bad software. At the same time, business and regulatory pressures are mounting. Some airlines are demanding that Boeing compensate them as they cancel flights and their planes sit idle. At least one airline is seeking to cancel its deal to buy more Max jets... And there were zero orders for the 737 this past March, and only 10 for January and February combined. Despite the bleak outlook for Boeing today, it’s hard to speculate how much the company will hurt in the end. Boeing currently has 5,000 orders for the 737 Max already booked, and Airbus has managed to have a worse first quarter for orders of its A320 jetliner... the catalyst for Boeing’s 737 redesign in 2011. For better or worse, the 737 jetliner has become the lifeblood of Boeing... It’s the one aircraft that Boeing can’t afford to give up or redesign... And it probably won’t. What could possibly go wrong?

American Consequences



dead-on and funny, while being as subtle as a shovel upside the head. Keep up the good work! - Bill T. P.J. O’Rourke comment: Thanks for the kind words, Bill. But it’s going to take more than a shovel to deal with Kamala’s cement head. (Speaking of heads, P.S. to those who don’t share Bill’s and my gear-head enthusiasms – The Buick Grand National was 1980s muscle car physical therapy for that staid old “doctor’s car” brand, named in honor of Darrell Waltrip’s back-to-back 1981 & ’82 NASCAR championships in Buick Regals.) Glad to be a new subscriber, I’ve always enjoyed your work Mr. O’Rourke. The concern to me of legalizing marijuana is that it will follow the tobacco model. Tobacco is cultivated to be more addictive and therefore more lethal, marketed to young folks, and has proven to be a great source of revenue for tobacco industries, “quitting tobacco” industries, governments, and health care – all at the expense of the people it kills and those who pay for health care. - Jon G. P.J. O’Rourke comment: I’m afraid you’re all too right, Jon. But I’m also afraid we’re stuck with decriminalized pot. No country has ever had much luck with “making stupid illegal.” Re: Our ’Cannabis Means Business’ Issue My wife is terrified of my driving, and has compared it to being in a getaway

Re: Our Newest Readers Weigh In

Been reading your words since an old English teacher from DeVilbiss High School turned me on to your writings over a Rusty Nail at my bar. Looking forward to reading more. – Pat H. (a “big fan from Toledo”) P.J. O’Rourke comment: Pat, as your fine education in literature attests, you and I went to the best damn high school in T-Town. (Now sadly closed due to Toledo’s economic and political woes.) All the other schools called us the “Cake-Eaters.” I’m proud to be a member of the Class of ’65. And proud to be a Toledoan. Been a big fan of your writing for many years, from your review of the Buick GN where you told the third-worlder’s to ’get their damn ox-carts out the way’ to Modern Manners and how to recreate the Battle of the Falklands, using beef bourguignon as capital ships and asparagus spears as Exocet missiles, all the way to that declarative explanation of our government: Parliament ofWhores. Nowmore appropriate than ever. See also: Kamala Harris. Looking forward to reading American Consequences . Your insight has always been We’re strong for Toledo T – O – L – E – D – O Where the girls are the fairest The boys are the squarest Of any old town that I know


April 2019

“Practical. Insightful. Helpful. Educational. Can’t ask for much more.” HHHHH –GAMECOCKS44

car following a major heist. As a result, whenever we go anywhere, no matter how far, she is the exclusive driver, thus preempting a lot of car fights that had been going on way too long when I was in the driver’s seat. (She had this annoying obsession, constantly repeating, “Keep your eyes on the road,” “Slow down,” and “Please start slowing down before you find it necessary to slam on the brakes and causing my head to all but go through the windshield every time we come to a red light.” All reasonable requests that I was utterly unable to fulfill. That said, in the early days of our relationship, when I was a more regular pot smoker, she figured out that if I smoked a little first, my driving improved dramatically. I was more present, less distracted, drove slower, paid better attention, and all in all, she felt much safer. We reached a point where she would ONLY agree to let me drive if I got high first. All this to say that there are no universal one-size-fits-all responses to cannabis, For some, driving high is a huge danger to themselves and others on the road. For others, like me, NOT smoking is a huge danger. So it annoys me whenever I read the debates about how to regulate and determine if someone behind the wheel is high, and if so, exactly how impaired they are. Because unlike blood alcohol levels, there will never be, and cannot be, a simple measurement to provide a reasonable gauge in order to create and enforce a law about it. – Eliezer S.



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American Consequences 17 American Consequences 17


P.J. O’Rourke comment: Well, Eliezer, it may work for you ... But it didn’t work for me in the 1960’s. I was puttering along at 3 mph with one wheel in the ditch thinking, “Oooo... Look at all the pretty flashing blue police car lights...” I don’t really have an opinion on cannabis – other than I think it should be legalized. Otherwise, I don’t really knowwhether these medical studies are worth much. Some of them, of course, are probably well done. But, I’ve seen the effects of bias too much to put much credibility in most studies coming out. I’ve seen how unblinding of doctors in randomized controlled trials ruins study results. I hope cannabis turns out to be super safe and a “wunder” drug – but it will likely cause lung cancer and not be too much better than existing treatments... – Evan W. P.J. O’Rourke comment: Evan, I agree with you about the medical studies. I did my best to research them for our “Cannabis Means Business” issue and found they were limited in number, scope, and types and kinds of test participants and, on careful reading, less conclusive than they’re said to be. Plus, as you point out, they include too much subjectivity – what social science calls “confirmation bias.” My advice: Don’t smoke the hash brownies. I am terribly disappointed with you advertising the selling of such a dangerous and illegal product, marijuana. Why would you want to promote such a dangerous material? Oh, never mind, I

get it it’s the money. The heck with the consequences... Just because something is lucrative doesn’t mean it’s right to promote it. Very disappointed. – Bonnie B. P.J. O’Rourke comment: Bonnie, you’re not very wrong. But I don’t think American Consequences is very wrong either. Money is our beat. We try to cover it with clear-eyed dispassion. There will always be some clashes between the market freedoms of material liberty and the ethical freedoms of moral liberty. These are the prices we pay for liberty as a whole. Re: ’You should be ashamed of yourself...’ I think for people who are horrified by the concept of legalization and investing in marijuana stocks, certainly bringing up a comparison message about cigarettes and caffeine and alcohol investments is fair, but I suggest go to the next step. Investments in any aspect of the U.S. military industrial complex or petrochemical industries have caused more deaths and harm on this earth than most else in comparison, by far. That is the outcry I await and listen for. – Michael G. P.J. O’Rourke comment: Michael, the path to being perfectly good in this world is steep and difficult. I wish you luck on your journey. But I doubt if your destination can be reached. It’s hard to live – let alone to invest – without causing fault of some kind. If what the climatologists tell me is true, every time I


April 2019

exhale carbon dioxide I poison the earth.

to disappear from the public eye as quickly a she deserves to, American Consequences will dig deeper. Re: Our digital-only subscription... Print the damn issues. I’ll pay for mine... Seriously! – Steve R. P.J. O’Rourke comment: Nothing would make this old print dog happier than running out to the curb and bringing home a physical AmCon . But the cost is damn daunting, and we’d rather spend money on a good writer than a bad business plan. But, Steve, please keep asking. If there’s enough demand for hard copies we’d be more than glad to create the supply.

If the state governments are now becoming the drug dealers, shouldn’t they let everyone in jail who possessed or dealt marijuana out of jail? Like, before or at the same time they legalize marijuana for medical or recreational reasons they let these people go free? It’s like gambling. You used to hide in rooms to play poker or take a chance of jail time for running numbers. Once government sees a chance to get more tax money and public opinion changes, vices become virtues. So are they letting pot dealers out of jail? – Gordon S. P.J. O’Rourke comment: Gordon, the answer to your questions is logically yes, legally no. The reason is that logic and law have almost nothing to do with each other. God is logical. He gave us Ten Commandments. Lawmakers are otherwise. The Code of Laws of the United States of America is 54 volumes long. Re: ’What Could Possibly Go Wrong?’ Great article on what will most certainly go wrong with the likes of AOC grabbing headlines (and therefore political priorities for liberals). So how about the story of AOC’s origins? Worth looking into further? Keep up the good work! - D.H. P.J. O’Rourke comment: D.H., I think we already know exactly who Alexandria Ocasio- Cortez is – that mouthy waitress with an opinion about everything who won’t just shut up and bring us the beer. If, however, she fails

Send us a message, question, or criticism at

American Consequences


f you study American history, you’ll see that Debt Jubilees occur only in a unique type of extreme political environment. After all, a Jubilee is a radical measure. The government essentially steals money from one group and hands it to another. In order for this to occur, four elements must be in place... 1. The wealth gap must be getting dramatically bigger. 2. There must be cultural threats from

3. The government must be ineffective at providing solutions. 4. And there must be growing anger toward the “elites.” Sounds familiar, doesn’t it? We have the largest gap ever between the rich and poor... We have huge increases in violent protests about immigration and race... We have a completely ineffective government... And we have extreme animosity toward the “elites” from both the left and right.

those with different values or from outsiders (in other words, minority populations and immigrants).


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By Porter Stansberry

Why Does Porter Call It a “Jubilee”?

The term “Debt Jubilee” has its basis in the book of Leviticus. The Israelites were instructed that every half century there should be a reversion of land to its original owners or their heirs, a general forgiveness of debt, and a manumission of bond-servants.

Leviticus 25:13 In the year of this jubile ye shall return every man unto his possession.

Check... check... check... and check. There’s actually a name for this type of political and social phenomenon. It’s called “populism.” And it emerges every 30 to 40 years. Populist movements are characterized by extreme anger at the government, at the wealthy, at the establishments, and at “newcomers” and minorities. As the director of an Alabama group that tracks violence and hate crimes around the

The slate is wiped clean and everybody gets to start over.

It’s a nice idea.

However, in fairness to the ancient Israelites and their common sense about economics, it’s worth mentioning that The New Oxford Annotated Bible contains the following footnote: "There is no evidence that the jubilee program was ever carried out."

- The editors


American Consequences


country told Newsweek in June 2017: “There has been a massive explosion of violence across the country.” I’m sure you’ve seen this yourself. The hatred and anger is like nothing I’ve witnessed in my lifetime. And it’s coming from all sides. A member of my staff went to a book reading in Baltimore by one of the most famous left-wing authors in the country. The author told the crowd that he wished he could go back in time and smother Donald Trump in his crib as a baby... or convince Trump’s mother to have an abortion. This epitomizes the political and social environment in America today. From the protests and marches... to the refusals to stand during the national anthem... From Black Lives Matter to the anti- immigration movements... to the rejuvenation of white supremacists... to the tripling of membership in the Democratic Socialists of America. It’s clear we are in the middle of an extreme “populist” period in America. Ray Dalio, one of the richest men in America, studied the political environments of the past 100 years and concluded in March 2017... The last time that it [populism] existed as a major force in the world was in the 1930s, when most countries became populist. Over the last year, it has again emerged as a major force.


Look at the top chart above. The big spikes show when populist politicians got the most

votes in America and abroad. So what does this all mean?

It proves that what we’re experiencing today is eerily similar to what happened in the 1930s... right before the biggest and most radical Debt Jubilee in American history. The economic comparison is stunning. Interest rates hit zero leading up to each of these periods as seen in the second chart above. In the following chart, you can see the government went into mega money-printing mode during both periods...


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In the top two right charts, printing money caused the stock market and other risky assets to boom during both periods... boosting the wealth of the rich, but doing nothing for the poor. During the 1930s, just like today, the wealthy acquired a much higher-than-normal percentage of our nation’s wealth, as seen in the chart to the right. And in both the 1930s and today, the percentage of the population that was foreign born was higher than normal... causing animosity among the “common man,” as seen in the bottom right chart. Just like today, the economic conditions of the 1930s caused extreme income inequality. Back then, the top 10% earned 45% of all income (compared with 50% today) and owned 85% of the wealth (compared with 75% today). Even the political characters are the same... The 1930s saw a popular socialist presidential candidate just like we had in 2016. Huey Long was a former governor of Louisiana and a U.S. senator. He proposed an income cap at $1 million... a 30-hour federal work week...



American Consequences


Tens of millions of Americans lost massive amounts of their savings. And after booming, the stock market soon fell 50% in a single year.

and 100% income taxes at the highest level. Long even established 27,000 “Share Our Wealth” clubs around the country and had a radio show that was listened to by one in five Americans. So where did this all lead? It led to America’s most dramatic Debt Jubilee to date... HOWAMERICANS LOST 69% OF THEIR SAVINGS In 1933 – in order to deal with mounting debts and print money to pay for dozens of new social programs – President Franklin D. Roosevelt made two extraordinary changes to the financial system. First, he closed banks for four days and forced Americans to turn in each ounce of gold they owned for $20.67 in paper money. Then the government raised the price of gold, wiping out 69% of the savings of anyone who followed these rules. You’re probably familiar with that part of the story. But that was only the beginning... Roosevelt also eliminated the “gold clause” in all contracts, including loans, bonds, and other financial instruments. You see, at the time, people were worried the government might inflate away the value of their money. So they added a gold clause, which said repayments could be required to be made in gold.

These gold clauses were in federal loans, bank deposits, insurance contracts, and other private agreements. When Roosevelt outlawed the gold clause, he stole billions from investors. In fact, a Harvard paper estimates this rule took $700 million a year from private investors who bought government bonds. Billions more were stolen from folks who lost money from the elimination of the gold clause in private contracts, bank accounts, and insurance deals. Eliminating the gold clause was so controversial, investors sued the government. The case went to the Supreme Court. Roosevelt was terrified his Debt Jubilee would be overturned. He even drafted a speech saying he would ignore the court if it ruled against him. But his political pressure worked, and the court ruled 5-4 in Roosevelt’s favor. Of course, there were consequences... Tens of millions of Americans lost massive amounts of their savings. And


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At the same time, a major financial crisis was brewing... The government had borrowed extraordinary sums, and we were having a hard time repaying creditors. That’s because at the time, every dollar was required to be backed by $0.25 worth of gold. So the government couldn’t print unlimited amounts of money out of thin air. Also, foreign creditors who owned U.S. government bonds were allowed to collect repayments in gold bullion instead of dollars... so our gold reserves were quickly disappearing. Get this: Between 1958 to 1968, 52% of America’s gold reserves left the country in the form of repayments for our debts. The government was scared. It knew there was only one way out... another Debt Jubilee. First, we eliminated the 25% gold backing of every dollar. Then, in 1971, President Nixon completely defaulted on our promise to pay gold for dollars to our foreign creditors. Once again, the government simply wiped the slate clean. No one could redeem dollars for gold any longer. This allowed the Fed to print as much money as it needed to make payments on our debts. But once again, there were consequences...

after booming, the stock market soon fell 50% in a single year. Investor confidence was crushed. Supreme Court Justice Harlan Fiske Stone vowed he would never buy another federal bond. We had another Debt Jubilee in America about 40 years later... Starting in the late 1960s, we saw another populist uprising... a combination of economic and social upheaval. If you’re old enough to remember, think about the anger and resentment of the 1960s. The Black Panthers’ slogan was: “Power to the People.” The idols of the day were people like Latin-American guerrilla leader Che Guevara, Malcolm X, and Muhammad Ali. All over the country, there was one clash after another... Small farmers fought banks and railroads... Union workers battled their bosses and federal judges. On college campuses, students fought anyone with authority. Election rallies routinely ended in violence. Things were so bad, Lyndon Johnson decided not to run for re-election. Martin Luther King Jr. and Robert Kennedy were assassinated. In 1968 alone, there were violent uprisings in more than 120 U.S. cities. A few miles from where my company is headquartered today, thousands of National Guard troops and 500 state police officers were brought in to quell the violence and looting.

American Consequences


In the 1970s, the U.S. dollar lost 30% of its value over a several-year period. Inflation more than doubled. And the stock market fell 48% in less than two years. Unemployment was around 10%. And, believe it or not, the federal government got so desperate that it issued “Carter Bonds” denominated in Swiss francs because the U.S. dollar could no longer be trusted. That brings us to today. Once again, the stage is set for America’s next Debt Jubilee. We are living in a world of two different Americas. For the wealthiest 40% of the population, life is good. Asset prices are rising... and wages are finally starting to increase. For everyone else, life is getting worse... For the bottom 60% of America, consumer debt is high and wages are stagnant. Most of these folks would have difficulty raising even a few hundred dollars for an emergency. These folks have less than $20,000 on average saved for retirement. Physical and mental health

is deteriorating. And death rates are soaring. Premature deaths are up by 20% since 2000. As Bridgewater Associates wrote in a 2017 report... The biggest contributors to that change are an increase in deaths by drugs/poisoning (up two times since 2000) and an increase in suicides (up over 50% since 2000). That is the definition of hopelessness. And it’s why the inevitable Jubilee in America is already underway... The concept of a Jubilee comes from the Bible (the Old Testament), the Book of Leviticus, Chapter 25. A Jubilee in the Jewish tradition was said to occur roughly every 50 years. It was a time for total forgiveness of debt and the freeing of slaves. Pope Boniface VIII proclaimed the first Christian Jubilee in 1300. And rulers throughout history have occasionally used a Jubilee to reset the financial system – especially when the poorest citizens are threatening revolt. Today, the vast majority of America is in bad shape. And the poorest citizens are calling for a radical solution... But this Jubilee will be different from the 1933 and 1971 ones we’ve discussed. The federal government is free to print all the money it needs to pay government debts. Private households are different.

Today, the vast majority of America is in bad shape. And the poorest citizens are calling for a radical solution...


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