American Consequences - April 2020

The ‘Big Lie’ Behind COVID-19

In the Viral Trenches

The Death of Capitalism?



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


APR I L 2 0 2 0



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54 Coronavirus Even Closed The Waffle House BY SALENA ZITO



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


58 The New Normal

Editor in Chief: P.J. O’Rourke Editorial Director: Carli Flippen Publisher: Steven Longenecker Executive Editor: Buck Sexton Managing Editor: Laura Greaver Creative Director: Erica Wood Contributing Editors: Todd Bucholz, Tom Carroll, Lars Dzikus, Dr. David Eifrig, Scott Garliss, Buck Sexton, Bill Shaw, Robert J. Shiller, Porter Stansberry, John Stossel, Salena Zito Cartoon Director: Frank Stansberry General Manager: Jamison Miller Advertising:


10 From Our Inbox

68 The Two Pandemics

16 The Great Cessation BY TODD BUCHHOLZ


72 The Red Tape Pandemic BY JOHN STOSSEL


76 Is Now the Time to Invest in Cannabis? BY TOM CARROLL

32 COVID-19 Debunked: The Real Danger Is Misinformation BY DR. DAVID EIFRIG 38 Don’t Count on U.S. Elections as Normal BY KIM ISKYAN

82 Killing Time


86 AWorld Without Sports BY LARS DZIKUS

42 Coronavirus is the New Innovator BY SCOTT GARLISS

90 The Final Word

Ricky D'Andrea, Jill Peterson Editorial feedback: feedback@


48 How Low Can Oil Go? BY BILL SHAW

94 Featured Contributors

American Consequences



E ditor in Chief P.J. O’Rourke has just as many questions about the pandemic as a kid in quarantine homeschool. As he puts it in his letter from the editor... We took P.J.’s challenge to heart in this American Consequences magazine... focusing on the biggest stories that really matter in this coronavirus crisis. We have Todd G. Buchholz, one of the clearest economic writers and thinkers in the world, tackling the big question: Does this mark the death knell of capitalism? Then we have what might end up being one of the most controversial pieces we’ve ever published... Financial research firm founder Porter Stansberry masterfully lays out what he calls “The ‘Big Lie’ Behind COVID-19.” Love or hate his conclusions, it is a must-read in today’s world of tyrannical lockdown orders and government overreach. Next, Dr. David Eifrig debunks dangerous COVID-19 myths, answers the top seven coronavirus question, and shows the real best way to fight this pandemic. American Consequences managing editor Laura Greaver has the real stories from the viral trenches as she talks with a travel agent, a doctor, hairstylist, liquor-store owner, and wedding caterer. Main Street journalist Salena Zito notes that coronavirus has even closed the Waffle House. Sports professor Lars Dzikus writes that sports aren’t likely coming back any time soon.

Chaos Chronicles editor Kim Iskyan details why you can’t count on U.S. elections this November to resemble anything close to normal. And libertarian journalist John Stossel shows how regulatory red tape has killed Americans. Then we turn to financial matters. If you’re an investor, you can’t miss these stories... • Longtime trader C. Scott Garliss has more than a dozen ways to profit from this new pandemic world with a COVID-19 portfolio... • Commodity expert Bill Shaw explains why oil prices can go much, much lower than you think. • Nobel laureate Robert J. Shiller explains that we don’t face one pandemic, but two. • And the best health care analyst in the nation, Thomas Carroll, details the new “essential” nature of cannabis in America... and shows why it may be time to invest in this beaten-down sector. We don’t always have to take this pandemic seriously, of course... We’re passing on 14 of our favorite “viral humor” jokes... P.J. O’Rourke suggests a few ways to “kill time” in quarantine... And as always, we’re watching Twitter... so you don’t have to. And finally, executive editor Buck Sexton sends us his Final Word... a dispatch from the pandemic peak in New York City. Regards, Steven Longenecker Publisher, American Consequences


April 2020

I NS I DE : Expert Financial Analyst Issues Rare Recession-Proof Stock Recommendation To extend a ‘thank you’ to new podcast followers, veteran investor, Dan Ferris is sharing the name and ticker symbol of a company that is undervalued and is set to soar in a recession.



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From Editor in Chief P.J. O’Rourke


April 2020




There’s only one story in the news, and I’m not going to report on it...

Like most journalists, I was the kind of liberal arts majorwho barelymanaged to get a C in Music Appreciation – or, as we called it, “Clapping for Credit.” I couldn’t have gotten into med school. I couldn’t have gotten into a veterinary school for goldfish. (“Flush twice and call me in the morning.”) Therefore, to me, the questionable thing about this pandemic is whether the journalists covering it have the type of expertise necessary to explain and analyze the effects of COVID-19.

American Consequences



We have people who do have that type of expertise writing in this issue of American Consequences . I’m not one of them. The last thing the world needs is more pundits who don’t know what they’re talking about. To be completely frank – speaking strictly between you readers and myself – I sometimes even wonder if the world needs more pundits who do know what they’re talking about. No offense meant to the knowledgeable, but everything they know scares the dickens out of me. I guess this fear serves a useful purpose in making me cautious about contagion. (Although, when my “fight or flight” emotion is triggered, I have to be sure to pick the “flight” option. Punching someone in the snoot violates social-distancing guidelines.) Who am I going to punch, anyway? I’m certainly not going to fly to Wuhan, China and Uber to the wet market and take a swing at the bat meat vendor. Journalists are supposed to provide answers. But all I’ve got are questions, such as the one above... and... Isn’t somebody supposed to be in charge? Our elected leaders are acting like the pandemic is a bad children’s game where they’re all blindfolded and swinging sticks – except they’re clobbering one another instead of the virus piñata. (And, viewed under the microscope, the coronavirus does look like it would be a swell papier-mâché target full of... lethal pathogens. Let’s skip this fiesta.)

America has an extraordinary history of leadership. Every time we’ve faced a great crisis, our nation has produced the great leader that we needed – the right person at the right time. Often, that leader came from relative or complete obscurity. A moderately successful tobacco planter and former colonel in the colonial militia, George Washington became – almost by immaculate conception – the father of our country. Backwoods lawyer and lanky hick Abraham Lincoln won the Civil War. And FDR, a crippled political dabbler, a rich kid who got elected governor of New York State by 1%, gave America hope in the Great Depression and victory in WWII. The coronavirus crisis is doubtlessly no different. The great leader that we need is... Who?... Where?... We haven’t got a clue . This is because the great leader that we need is under curfew and stay-at-home orders, stuck in his house wearing a surgical mask, watching Netflix, and squirting the remote with Purell. “Working from home” is not a viable option for great leaders. If Washington had never left the White House, Emanuel Leutze’s To be completely frank – speaking strictly between you readers and myself – I sometimes evenwonder if theworld needs more pundits who do knowwhat they’re talking about.


April 2020

famous painting, “Washington Crossing the Delaware,” would be a picture of an empty boat, and George would have been sitting in an empty lot in the middle of nowhere because the White House hadn’t been built yet and neither had Washington, D.C. Speaking of working from home... Have you put a Post-It note over your laptop camera? If you haven’t, your boss is going to discover that working from home is about as efficient as bringing your children, your dog, your refrigerator, your dirty laundry, and your liquor cabinet with you into the office every day. And by the way... Howmany employees will bosses lay off before bosses realize that it’s employees who do all the work? Maybe soon we’ll go to our local branch of Chase Bank and find JPMorgan Chase Chairman and CEO Jamie Dimon operating the drive-thru window – because he’s the only person left. Your boss is going to discover that working from home is about as efficient as bringing your children, your dog, your refrigerator, your dirty laundry, and your liquor cabinet with you into the office every day.

Meanwhile, I’m all in favor of providing economic relief to those who are unemployed and broke because of the pandemic. In fact, I think it’s a moral imperative, but... Can we really print trillions of dollars based on nothing but the “full faith and credit” of the U.S. government and not cause all hell to break loose? Maybe the government is operating on the theory that although prices will be sky-high, we won’t mind because we’ll be paying those prices with worthless money. Meanwhile... Is going to school online an effective educational process? I’ve got three kids who are now going to school online. It’s still too soon to make an informed judgment about how much they’re learning... But at least my kids are able to sleep through class in the comfort of their own beds. And, last question... Has anyone noticed that socializing via social media is a little... how to put this... sterile? Not that anyone wants to (or will ever again dare to) go back to the days of Playboy Mansion orgies, crash pad Wesson oil parties, or frat house passion pits, but... with all due respect to the #MeToo movement, cocktails on Zoom are all Me, no Too.

American Consequences



We don’t care about feeling good about ourselves. Anybody can pat themselves on their own back. (Well... to tell the truth, after a half-century hunched over a typewriter and keyboard keys, I do have trouble reaching that far over my shoulder.) What we care about is you feeling good about what you read. P.J. has the clear view of what’s going on. I love it. This virus scare is robbing folks of their freedoms. NewWorld Order – those folks will take this incident and try to make their goals stronger to “bring us together.” Our politicians need desperately to restore our freedoms to work, travel, open schools, open the restaurants and bars, entertainment venues. Give our freedoms back. We may or may not get sick. It’s a personal thing. The nanny state won’t allow folks to do as they wish. Put decisions back in individuals’ laps. – Patricia M. P.J. O’Rourke comment: Well, Patricia, despite what I just said to Mitch, above, I’m not sure you’re going to feel good about reading what I’m about to say. I disagree with you. Every medical, scientific, and epidemiological expert to whom I’ve spoken (and I’ve spoken to a bunch of them), thinks it’s necessary to go into stay-at-home mode. Otherwise our health care system will be so overloaded that the gravely ill won’t be able to receive even decent palliative care. I wish I didn’t disagree with you because I share your worries about our freedoms. Government, by its nature, will use every

Re: Our Newest Readers Weigh In

Just wanted to pass along a hearty thumbs up to American Consequences . I would go to the ends of the earth (or Piscataway, NJ, a distinction without a difference) to read P. J. O’Rourke. Very happy to get my P. J. fix each month with the electronic arrival of your magazine. – Curtice M. P.J. O’Rourke comment: A far-reaching compliment! And, Curtice, I would go to the ends of the Earth for American Consequences readers like you – although I might draw the line at Piscataway, NJ. But it’s a moot point these days since we’re all being told to stay home with our families... which I have been dutifully doing. (Don’t say anything to my wife and kids, but Piscataway is starting to look pretty good.) Keep up the good work. I read the whole magazine from cover to cover in one sitting. It was really relevant. Thank you. – Mitch M. P.J. O’Rourke comment: You’re welcome, Mitch. Relevant is our aim. As somebody who has been writing and editing for... honest to gosh... 50 years, I think the key to relevance is full identification with the readers. Too many publications focus on doing what makes the writers and editors look important and feel good about themselves. That’s how the New Yorker got so boring – and irrelevant. (Although I do admit to liking their cartoons.)


April 2020

and drugs... Let’s hope it doesn’t come to guns. (Not that I’m dropping the key to the trigger lock on my 9mm down the sewer grate.) And as for drugs, I used up my share (and a lot of everybody else’s) in the ‘60s and ‘70s. To quote the old Dave Van Ronk folk song “Cocaine Blues”... Reached in my pocket, grabbed my poke Note in my pocket says “No more coke” I read your letter daily, thank you for the information and pause in an otherwise stress-related process. – Carl M. P.J. O’Rourke comment: Glad you’re enjoying our letter Carl. And “stress-related process” is a kind way of putting it re the current situation. Plus, to make things even worse, no sports on TV. I was reduced to betting on the outcome of last year’s March Madness. Put $50 on Texas Tech to beat Virginia. Re: The Pandemic Nightmare Scenario Hits NYC

excuse to take freedoms away and make every excuse to not give them back. When all of this is over, we’ll have a big fight on our hands to regain the liberties we’ve lost. And, Patricia, I hope to be with you in the forefront of that battle. But in the meantime, I’m following the rules. Although maybe this is just selfishness on my part. I’m 72 years old, smoke cigars, drink scotch, and my idea of exercise is getting up at 3 a.m. to take a leak. It’s like this &*%$ing virus has my name on it. Hillary Clinton was wrong: Americans aren’t clinging to their guns and Bibles in times of this crisis. I’m clinging to P.J. O’Rourke’s books and alcohol... I remember Trump saying that drugs were flooding into America cheaper than candy bars. Well, not ONE illegal immigrant has offered me pure uncut

ecstasy for a price cheaper than a candy bar. I believe the solution for America is two things: Americans need better guns and better drugs. – D.J.A. P.J. O’Rourke comment: And, in my case, better reading material. I’m deeply flattered and very grateful, D.J.A., that you’re clinging to my books, but I’ve read the darn things already. I’m with you about the alcohol though. I call it “inner hand sanitizer.” As for the guns

Buck: The “experts” don’t know enough about the coronavirus and are guessing at fatality rates, projected number of infections, etc. Don’t forget that the mayor and top health officer for NYC told its citizens to party on, while other places went to shelter in place. So, it is likely that most other places will not be like NYC. That’s two cents from this “guesspert”. – Jeff T.


American Consequences



Re: The Gluttonous Feast Behind the Curtain The alleged $25K to “journalists” is particularly nauseating! And the Fed gets a $4 trillion slush fund and they are talking about buying securities directly. Look at the last 25 years in Japan and tell me how that is working out!? – Bob M. Steven Longenecker comment: I have some good news Bob – that figure was just what one journalist organization asked for . They ended up getting zip, as far as we can tell. The bad news, of course, is that Fed has in no way ruled out buying equities directly. What could possibly go wrong? No bailouts to companies that did share buybacks. Will CEOs and directors become the new targets for a French revolution-type action by the people? – Evan C. Steven Longenecker comment: We certainly hope not, Evan. There were well over 1 million people killed during the French Revolution and the Revolutionary Wars over the next decade. In the Terror, hundreds of thousands were arrested and tens of thousands were executed. We have little interest in bailing out companies with significant share repurchases... But that’s because we have little interest in giving bailouts to companies at all. If a business can’t raise needed capital in the market, why should the government give it to them? Let them fail. But please, keep the guillotines in the shed.

Buck Sexton comment: Jeff, I certainly hope you’re right about other places not being like New York City. This place is getting hit much worse than any other part of America. Given the way a crowd disease like COVID-19 spreads, it’s no surprise to anyone here how that could be the case. We are densely packed together all the time on mass transportation, in shops and restaurants, even walking down the street. New York City is my hometown – I love it – but it’s also the biggest petri dish in America, and we are suffering the consequences of that. Wyoming is going to have a much easier time dealing with this pandemic. Faith or fear... It’s a choice. It’s our turn in the bucket and we are going to find out what we are made of. The world is not ending, but there are going to be changes made. I think our priorities may return to a level of balance that existed in the ‘50s. That would be a very good thing! We each make a choice every morning when we open our eyes. We will either kill time or seize it that day. What will you choose? Keep smiling and stay well! – Richard E. Buck Sexton comment: Richard, I agree with you that the world is not ending. That’s certainly good news. But what will America look like when we finally get past this? The speed with which our leadership has been willing to nullify the Bill of Rights and put trillions of dollars more onto our national debt is stunning... and deeply concerning. Anyone who knows history should be highly skeptical of our government’s willingness to rein itself in.


April 2020

cities bombed every night, but the next day everybody went back to work or school. We have to be the same now, take precautions, wash your hands after you’ve been out, wear masks – but carry on. Letting the economy go to pot, firms closing down, people losing jobs and savings, and eventually even homes, because of a virus? This situation needs a common-sense rethink and quick. – Allie F. Steven Longenecker comment: Allie, we sympathize... But the horse has already bolted from the barn. Blame whoever you like – China for originating the virus, regulators who screwed up the early testing, or panicked politicians who don’t want to be blamed for additional deaths. But as you said, in the meantime... we carry on. Re: How the ‘SecondWave’ Turns Into a Tsunami I deeply appreciate and feel for your brother and all first responders who are unfortunately caught up in these shortages. America was certainly not prepared for the Spanish Flu and other epidemics but citizens didn’t go around blaming current or prior administrations. – Larry H. Kim Iskyan comment: Larry – thanks for your message, and you draw an interesting comparison. Indeed, the U.S. wasn’t prepared for the Spanish Flu, the most relevant comparable to the current pandemic. Then, as now, misinformation, fake news and outright lying by governments was a key factor in the spread of the disease. According to an excellent article in Smithsonian Magazine from November 2017 about the Spanish Flu... “What proved even more deadly [than

Nothing changes. Virus be dammed, the thieves are getting ready to thrive at the table of Uncle Sam. Everyone is looking at how to best get what they can while the big daddy is giving out goodies. No one will care who is hurting, who is unemployed, who is lacking food and medical care. Sad but expected. The airlines want billions in bailouts. I say let them go broke. – Stan B. Steven Longenecker comment: We agree completely, Stan. Of course, we also suspect that this bailout package is only the first of several more to come. The trough is full of slop. And the pigs are running. Re: Liberal Christmas in March “With a horrific pandemic sweeping over the nation... “ Surely, you were referring to the current influenza epidemic in the USA. CDC estimates 20,000 to 60,000 US deaths and it’s like no one notices. I’m at a total loss. – Mike R. P.J. O’Rourke comment: Mike, I take your point. But it’s an eternal fact that fear of the new and strange grips us harder than fear of the old and familiar. One upside to the COVID-19 pandemic (and I’m damn glad there is an upside) will be greatly increased research into vaccinations and treatments for the entire array of diseases caused by coronaviruses. This is crazy, we are allowing ourselves to be destroyed by a virus, markets have tumbled, whole nations are in lockdown, and we’re all hiding under the bed, what would our forefathers think? I live in England, when WW2 started thousands were killed and

American Consequences



Wilson’s in 1918 isn’t clear yet. And one of the reasons for the epidemic policy failure in was that it was illegal to say anything critical about the U.S. government – which in turn lied and obscured the truth. Fortunately, it’s not illegal to tell the truth today in the U.S. (yet, at least). And so I’ll continue to criticize as I see fit. I don’t think anyone wants 2.1 million Americans to die. The poorly provisioned health care system is a result of running it as a for-profit enterprise... No wasted capital on inventory. No excess bed capacity. Buy and close the competing hospitals. – John Y. Kim Iskyan comment: John – as I wrote on March 6, the American health care system is uniquely designed to promote the spread of COVID-19. You have to pay to get tested – and for the 14% of the population has no health insurance, and the many tens of millions more who have lousy health insurance, that’s a big reason to not get tested. (And, meanwhile, potentially infect lots of other people.) And if you test positive, treatment (and hospitalization) could be financially catastrophic – especially for those 49% of Americans who live paycheck to paycheck. However. I think free enterprise needs to be the driver of health care. Market incentives are the grease of efficiency.

World War I in that it required the services of physicians, thus taking them away from civilian hospitals] was the government policy toward the truth... When the United States entered the war, [President] Woodrow Wilson... created the Committee on Public Information, which was inspired by an adviser who wrote, ‘Truth and falsehood are arbitrary terms... The force of an idea lies in its inspirational value. It matters very little if it is true or false.’” The Sedition Act, passed by Congress in May 1918 at Wilson’s urging, made saying anything bad about the U.S. government punishable with prison time. The main aim of that was to discourage any bad news about World War I, and it had severe implications for the spread of the flu. The article explains, “Against this background, while influenza bled into American life, public health officials, determined to keep morale up, began to lie.” Around 670,000 Americans died of the Spanish Flu. Adjusted for population size, that’s equivalent to about 2.1 million people today. And the U.S. got off easy... a total of 20 million to 50 million people worldwide died of the Spanish Flu. That would be equivalent to somewhere between 86 million to 215 million people dying... or, at the lower end, the combined populations of California, Florida, and Texas. One of the key jobs of a government is, at the most basic level, to protect its people. Whether the current government in the U.S. is failing as catastrophically as Woodrow

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April 2020


EXPOSED: The REAL Reason Why the Rich are Getting Wealthier in America -- While Everyone Else is Being Left Behind

Today, most Americans are being left behind in a way we’ve never--ever--seen before. Sure, the gap between the rich and everyone else has always existed--but never on this level. And never has it increased at this speed. Every year, thousands of people in our country are ascending into millionaire status. On the other side, surveys show nearly 60% of Americans don’t even have $1,000 in savings. That’s why, for the first time ever, Porter Stansberry (an ultra-successful, multi-millionaire businessman), has gone on camera to explain the REAL reason for America’s huge and growing wealth gap. As Porter explains, we don’t need socialism in America. We need a better understanding of how this new economy works. And if you want to truly understand the REAL reason why the rich are getting richer… and the most important step you can take, to be on the right side of this trend, all you have to do is watch the first 10 minutes of Stansberry’s remarkable new video, filmed in his corner office.

Stansberry explains what politicians either don’t understand or simply won’t tell you… and he reveals the one investment he recommends you make (it’s not a stock, bond, ETF, mutual fund, or precious metals), to help make sure you don’t fall behind. Porter is one of the most controversial figures in America today—but he’s also one of the smartest, most successful, and most generous men you’ll ever meet. I guarantee you’ve never heard these ideas discussed in quite this way before. Just watch the first 10 minutes of Stansberry’s new video. You will think about what is happening in America in a completely different way. And you could even have the chance to make money, if you follow his recommendations. You can watch Stansberry’s new video, filmed at our firms’ headquarters, for free here:

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By Todd G. Buchholz


April 2020

Socialism is looking less ugly these days.

It used to conjure up images of bushy Karl Marx with spittle in his beard, or a hairless Nikita Khrushchev locking a monkey in a satellite, promising “we will bury you,” and then yelling at a U.N. podium while banging his size 6 Soviet shoe.


on capitalism? Many millennials and their younger siblings think so. A YouGov poll showed that 70% of American millennials are “somewhat or extremely likely” to vote for a socialist. Though Sanders, at 78 years old, may soon head off to a retirement village or to one of his homes to settle down, his followers will not. Rather than apologizing for KGB spies in the Soviet Union or Stasi thugs in East Berlin, American socialists blithely cite gentle Sweden. They disregard that Sweden now embraces free enterprise. It swerved back from the welfare state to avoid national bankruptcy in the 1990s. The Cato Institute’s Human Freedom Index now gives Sweden a slightly higher score than the U.S. Though Sweden’s personal income tax rates exceed U.S. rates, how many American socialists know that in 2004 the Swedish parliament voted unanimously to drop the estate tax to zero? The billionaire founder of Ikea, who had

Today the word “socialist” recalls not a ghoul... but a codger like Bernie Sanders or his funnier incarnation, Larry David. Bernie looks like he drives around the country in a beat-up Dodge Rambler and leaves his left- turn signal blinking the whole way across Route 66. We now live in an era where an avowed socialist came close to grabbing a major party’s nomination. In contrast, it’s been a tough century for capitalism. Investors have absorbed successive hammer and sickle blows to the head, the gut, and the portfolio: First, the Tech Wreck of 2000... second, the 9/11 attacks... third, the Great Recession... and now the coronavirus crisis. That brings today’s slump, which I call the “Great Cessation.” With borders slammed shut, tariffs marring trade, and a budget deficit rivaling World War II’s, is it time to throw in the towel

American Consequences



the Great Cessation, the jobless rate was the lowest in 50 years and a record-low for Black and Hispanic workers. Average hourly wages were climbing at a 3% pace, and lower income wages were growing faster than wages near the top. In historical terms, average family homes are nearly twice as large as they were back when the Brady Bunch shared a shag-carpeted split-level in the 1970s. Since the late 1950s, when Leave it to Beaver aired, life expectancy has jumped 10 years (despite a recent opioid-induced setback). Back in the Beaver days, it took a median laborer two weeks to afford a new refrigerator. Today, a median worker can walk into Walmart or Home Depot and buy a refrigerator after about two and half days of labor. So why is capitalism backpedaling like a skinny-legged fighter scared of Mike Tyson before he got the Maori tattoo on his face and made a cameo appearance with a doped-up tiger in The Hangover ? I would argue that it’s not about debt statistics or the actual financial impact of popped bubbles in tech and real estate. If it were, the rage against capitalism would have subsided as the job market roared ahead. Instead, we don’t see much correlation between jobs and the ardor to dump hardcore capitalism in favor of something that promises to be cuddlier and less competitive. We are confronting a backlash against capitalism because of its success , not because of its failure. Though I wish I could say I am the only one to have thought of this, I will call on three disparate deponents, the first of them a surprise witness... Karl Marx himself wrote that socialism

decamped to Switzerland in the 1970s, moved back home. Do American socialists know that Sweden’s corporate tax rate was lower than the U.S. rate for 25 years until Donald Trump came to Washington and slashed U.S. levels all the way down to the same low 21% rate as Sweden? We are confronting a backlash against capitalism because of its success , not because of its failure. Some might argue that we should dump capitalism because all has gone wrong. It’s not difficult to wave around depressing statistics... Even before the coronavirus hit the U.S., the Federal Reserve reported that 40% of American families did not have $400 in the bank to use in case of emergency. Their “break the glass” moment has arrived, and some cupboards are bare. Every politician has memorized a talking point about $1.6 trillion in student debt, not to mention Medicare liabilities of $37 trillion, even before “Medicare for All” comes before Congress. Meanwhile, mega-rich media mogul David Geffen takes a selfie of his own gleaming yacht at sunset and posts it online, along with a note assuring us that we can stop worrying whether he has a safe place to sleep during the virus outbreak. Now we know why he named his first company Asylum Records. Such impolite and impolitic missives make it tough to defend capitalism for those of us who don’t have Barbra Streisand on speed dial. Some of the dire statistics are rebuttable, and there is plenty of good news, too. Until


April 2020

with Reddi-wip and a corn-syrup-infused maraschino cherry, why would we bother to press on with the rat race? Clearly, Keynes wrote this in an era when suburban American families felt they “made it” if they could walk on wall-to-wall carpeting and beat the scourge of “ring around the collar.” He did not seem to realize, as Adam Smith did in 1776, that humans have a natural tendency to continue improving their lives. Wall-to-wall carpeting begets Formica, which begets granite counters, and then a 57,000-BTU Viking stove perfectly suited for professional chefs and for amateurs who like brûlée-ing their own crème and the alluring look of singed eyebrows. Keynes did worry that with cupboards full and new cars shined we would get bored. And it’s true that today’s retirees often complain of tedium. Keynes did worry that with cupboards full and new cars shined we would get bored. And it’s true that today’s retirees often complain of tedium. What if the whole world retired? How many Paul McCartney and Mick Jagger “final tours” would it take to entertain an entirely pensioned population? Existential angst might pervade a sated world. Often joy comes in striving for goals... not achieving them. In a book called Rush: Why We Thrive in the Rat Race , I showed that people who retire early often get stupid and sad. To Joseph Schumpeter, the greatest threat came not from financial factors such as falling

could not legitimately arrive until after capitalism triggered unimagined wealth. That’s why Marx did not think Russia was a good candidate for socialism (at least he got something right). Instead, he saw socialism springing up in industrialized England and France. Marx was repulsed by unscientific romantics who depicted capitalism as a wicked accident contrived by evil men. Marx composed some of the most eloquent paeans to the capitalist, since he thought that capitalism liberated man from even worse conditions. Marx’s Communist Manifesto had no time for fuzzy-headed nostalgia mongers: “The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all nations, even the most barbarian, into civilization.” Marx would have hated the Green Party and dreamed of its members choking on their Tofurky. “Capitalism,” he wrote, “rescued a considerable part of the population from the idiocy of rural life.” He would have sent “back to nature” advocates to their history books to learn how terrible preindustrial life was. In the mid-20th century, arch-rival economists Joseph Schumpeter and John Maynard Keynes pondered the future of capitalism and came to a similar conclusion: It would perish down because it would first flourish. Keynes wrote a graceful essay called “Economic Possibilities for our Grandchildren,” in which he posited that capitalism might conquer the problem of scarcity, bringing endless supplies of energy and boundless bounties of food. If everyone got a Chevy, a Barcalounger, three meals a day, and an ice cream sundae topped

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to acquire, we could finally claw our way back to that noble, leafy, and peaceful place we left behind in Genesis , where we never wanted anything, let alone tried to get it. I call such believers Edenists . (Even atheists can adopt an Edenist mindset). When socialists, like progressives, get honest, they admit they do not really want to generate more prosperity. They are done with that. Instead, they prefer that the economy be given a time-out – the economic equivalent of Xanax. Shut down capitalism and perhaps replace it with an old-styled kibbutz for 330 million people. Why? To prevent envy and to drain us of our competitive juices. They believe that competition is cancerous, eating away at our souls and our chances for happiness. If we could just stomp out competition, we could achieve self-realization and bliss. Rather than allowing the New York Stock Exchange to operate, they would rather we dress up like druids and prance around the rocks of Stonehenge in hopes that it would help us pay our mortgage bills. (Yes, such tours are available.) I admit that now is not a popular time to speak up for free markets and competition. I understand the rage in western countries against the failings of modern life, especially following the financial catastrophes of 2008 to 2009 and the wild market rides spurred by the Great Cessation. Didn’t hypercompetitive bankers lead to the ruin of Lehman Brothers and Bear Stearns? Didn’t super competitive brokers baying for bucks in trading rooms nearly bankrupt the world? Didn’t reckless oil drillers lead to a devastating spill in 2010? So why not join the globalization protestors

Among many intellectuals, capitalism’s the new original sin. Just as the Bible tells us that original sin expels human beings from Eden, capitalism becomes the new sin that prevents us from returning to Eden. Among many intellectuals, capitalism’s the new original sin. Just as the Bible tells us that original sin expels human beings from Eden, capitalism becomes the new sin that prevents us from returning to Eden. If we could just expunge the drive to compete and the desire soiree, and drug use spread, Schumpeter’s predictions seemed to be coming true. Third world nations, newly liberated from Europe, turned to socialism. But with the fall of the Berlin Wall in 1989, it seemed that socialism was a hoary, old tale for ‘60s nostalgics, who adorned themselves in Mao jackets made from hemp and regret. profits... but from young college graduates equipped with BA degrees in Human Rights (with a minor in Disappointed Peoples) who end up driving taxi cabs, even though they never learned to parallel park. Schumpeter foresaw today’s social justice warriors protesting income inequality and pollution and then turning to socialism, which promises material welfare and moral support for those yearning for justice on this earth. In his famous query, Schumpeter asked, “Can capitalism survive? No. I do not think it can.” During the late 1960s, as long hair, bongo drums, Leonard Bernstein’s Black Panther


April 2020

Let’s keep things simple?” Would 1 B.C. have been a good time to hit “pause?” Or July 3, 1776? Or on the eve of the 1964 Civil Rights vote? It’s a good thing Teddy Roosevelt did not lock us into the standard of living of 1904, or we would never fly on airplanes, get a polio vaccine, or expect to live past age 50. Nor would we have seen the grace of Fred and Ginger’s waltz, the magic of Michael Jordan’s last shot at the buzzer, or that moment when Luciano Pavarotti unsheathes a titanium- tipped high B and sings “Vincerò!” (“I will win”) in Nessun Dorma. With all due respect to medicine men, who sometimes come across herbal tonics, it was daring science in modern laboratories and not the jungle that produced Jonas Salk. Grants from the Andrew W. Mellon Foundation helped, too. The coronavirus will be licked in a similar way. Without the free markets of the 20th century, we’d still be, as Milton Berle said, “watching television by candlelight.” We cannot know what we will miss if we halt our climb toward greater affluence. Now is not the time to stop. Todd G. Buchholz has served as White House director of economic policy and managing director of the legendary Tiger hedge fund. He was awarded the annual teaching prize in economics at Harvard, was named one of the “21 Top Speakers for the 21st Century” by Successful Meetings magazine, and is the author of numerous books, most recently, The Price of Prosperity (HarperCollins). Follow him on Twitter at @econTodd.

and hurl rocks into plate glass windows at Starbucks? No doubt, amid the periodic financial wreckage, we all feel cheated by the crooked CEO, the mortgage broker moron, or the short seller who sneaks falsities into the market. And we feel a natural yearning to go back to simpler times, to some Eden that exists in our Jungian memory. Maybe throwing rocks will remind us of how happy we were during the Stone Age. But singing “Kum Ba Yah” does not work. Sitting around a metaphoric campfire, holding hands, and singing communal songs does not make human beings happy. Sweaty, yes. Sooty, perhaps... but not happy. More tourists have trampled on Thoreau’s Walden Pond snapping photos than have seriously considered giving up their cell phones to pick berries. We are delighted to try pomegranate juice – in the hope of finding the secret to clear skin and lower blood pressure – but virtually no American will plant his own bush and give up streaming video or even accept a slower download speed on WiFi. We may embrace symbols of a more homemade life, but these are tokens of wishful thinking... not titanic changes of substance. So why don’t we just call a truce, an end to consumerism, materialism, and struggling for more? The problem is you cannot chop off our drive to compete without expelling the good things in life that will come from it. At what point in time in the past should people have declared, “Stop! Enough progress.

American Consequences





April 2020

By Porter Stansberry

Recently, an old friend said, “Porter, I’m almost afraid to ask... but what do you think about all of this madness, about the government telling everyone they have to sit in their houses? How long do you think this can go on?”

What do I think? You probably won’t like it...


We are going through the greatest mass delusion in history. Never in my life have I ever been more ashamed of our elected officials. And never in my wildest dreams did I think our entire country would fall for such complete nonsense on such an enormous scale. I’ll show you why virtually everything we’ve done so far has made the impact of this virus worse than it would have been if we had done nothing at all. And I’ll also show you how simple doing the right thing could have (and should have) been. I can also predict what will (eventually) happen next – the only steps that can actually protect those most at risk from this virus. But before I get to the facts that inform my view... I would like to review how completely inane and idiotic our political leaders have become in the midst of this health problem. My favorite example so far? The thousands of outdoor recreational activities that have been closed or forbidden – including those that involve individual pursuits, like surfing. And what did CBS News publish as a headline above the story documenting a surfer being chased down by patrol boats? It read:

“Scientist Says Beaches Are Dangerous Right Now.” How does anyone read this stuff and not laugh out loud? It’s impossible to watch the video of a surfer being chased down by patrol boats in the name of public health and not think something has gone terribly wrong in America. But what’s the root of the problem today? What’s the foundation of all of these bad ideas? At the heart of every mass delusion, there’s a “big lie.” The big lie is a falsehood so outrageous and so obviously wrong, in retrospect people can hardly believe that anyone took it seriously. The most famous example of the “big lie” is the Salem Witch Trials, where four bored teenage girls convinced their pastor they were possessed by the devil and that dozens

Never in my wildest dreams did I think our entire country would fall for such complete nonsense on such an enormous scale.

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It’s utter nonsense. “We” – the people of the world, the people of our country, of my state, of this city (Baltimore), and even the people in my neighborhood – do not share the same values, ideals, or circumstances. We do not have anything like the same immune systems or face the same risks of this virus. While it might sound friendly to say “we’re all in this together” – the reality is that we are not. And enforcing policies that treat all of us the same is the very worst approach we could take to dealing with this health crisis. Some of us are at much greater risk of serious harm by this virus. Some of us are much more susceptible to infection. Some of us own businesses or work for companies that haven’t been impacted at all. Others have seen their livelihoods, their careers, or even their life savings wiped out. We are NOT in this together. As with everything else in our lives, our abilities and our priorities and the risks we’re willing to take all differ. We are individuals – not a monolithic polity. Saying “we’re all in this together” sounds like Mao’s China, where people abandoned the cities to die from starvation on communal farms. It seems like a disaster in the making... because it is. Rather than assessing our own risks and our own priorities and then making our own decisions, we have decided to allow the government – really just a handful of governors and the president – to make one decision for all of us. And we’re told not following the rules means we’re putting other peoples’ lives in jeopardy.

of people in their community were agents of Satan. The pastor, in turn, convinced most of Massachusetts that the colony was inundated with witches. Even though it’s hard to imagine today, some 200 people were arrested over the next year. One poor man, Giles Corey, was crushed to death under a pile of giant rocks because he wouldn’t confess to being a witch. And what happened to those who did confess? They were forced to name more witches. Then they were hanged. Before anyone came to their senses, 30 people were put to death. The big lie is a falsehood so outrageous and so obviously wrong, in retrospect people can hardly believe that anyone took it seriously. We “modern” Americans look back at these events and wonder how anyone could have taken seriously a bunch of teenagers prattling on about witches and devils. But don’t be too proud... A court in Arkansas sent three teenage boys to prison in 1994 for murders they couldn’t have possibly committed, mostly because the jury firmly believed they were devil worshippers and thought they’d used black magic to pull off the crime. And with COVID-19, Americans have become just as irrational as those Salem witch hunters or that Arkansas jury. What’s the big lie today? The big lie today is that “we” are all in “this” together .


April 2020

the individual and limits the power of the State. We do not exist to serve the State. The State exists to serve us. That distinction lies at the very heart of what it means to be an American, and I think our leaders have completely forgotten this fact. Why is this idea so important, not merely for philosophical reasons, but for the best possible outcomes? Why do free societies produce so much more wealth and happiness than countries led by tyrannical governments? America has proven, again and again, that the “spontaneous order” of free people and free markets evolve far superior solutions to every human need and want. If you want to botch something up, just ask the government to take over. If you want efficient solutions that work, allow people to compete in a free market. What's putting all of us in jeopardy is the idea that Washington D.C. knows best and we could follow directions – because "we're all in this together." That’s why America has long led the world in the creation of wealth and innovation. That’s why we produce the highest-quality creative art, entertainment, design, and technology. But... what about when we fail? Look back at all of our country’s biggest blunders and you won’t find freedom or free markets. You’ll find a government that has far overstepped its constitutional limits. It happens every single time: When we allow

It’s complete and utter nonsense. What’s putting all of us in jeopardy is the idea that Washington D.C. knows best and we could follow directions – because “we’re all in this together.” Adolf Hitler in his book Mein Kampf explained why such “big lies” are at the foundation of all tyranny. If you want to understand how despots operate, you should consider how one of the worst in history manipulated large groups of people... “In the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie...” Not only are “we” not in “this” together, we shouldn’t strive to be either. The strength and resilience of a free society is NOT based on the idea that we are all the same or should share the same goals – but upon precisely the opposite. A free society recognizes a fundamental truth of nature: We are not the same . We do not have the same strengths, the same ideas, the same histories, or the same goals. There’s no such thing as “The Public Good.” There’s a myriad of competing interests, as Adam Smith explained in The Wealth of Nations more than 200 years ago. What we do share, however, is a common philosophy that champions the rights of

American Consequences


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