- By The Notorious CFP®
An Inconvenient Truth
I get a lot of questions these days about my faith in the government's ability to successfully "break the back of inflation," given their inability to accomplish much of anything for the last several
generations decades. I usually first acknowledge that this is a reasonable question, and that their fear and apprehension (i.e. about whether our government leaders can indeed be a force of good in the world) is not unwarranted.
As it seems the federal health care, defense, justice and intelligence communities in particular seek to destroy themselves and their reputation over the past several years, some intelligent and non-ideological observes (not me, of course) might be hard-pressed to justify their continued existence. Some might conclude that the world would certainly be better off without most of them, or that the individual members of these bodies might certainly be more fulfilled in actual productive occupations. Indeed, as our federal and statehouses have ballooned in size, corruption and ineptitude over the past century, it's becoming harder and harder to point to anything coming from the federal civil service sector that has improved American lives materially.
That's quite an indictment and a hell of a way to start off a post. I've already alienated half my audience, leaving only the critical thinkers. (The other half are taking screen shots and searching for my phone number in their Chinese surveillance device to call and tell me what they think of my opinions!) It does seem from my vantage point that Washington DC could be growing increasingly castrated with each passing year, with the affliction traversing virtually every organ of the federal government.
It would be quite a challenge to debate that the last effective program administered by the federal government was the 1994 Crime Bill (also known as the Clinton Crime Bill or the Biden Crime Law.) Plenty of folks- especially the disingenuous and stupid- like to forget how just a few decades prior, it was actually the Democrat party using their control of all three branches of government to pass the "largest crime bill in the history of the United States..."
Like prior generations, most young people - especially those of a certain advantaged sex, racial, political and socioeconomic demographic - who today are trading the future of their country in exchange for a few shekels of student loan debt, and a couple years back were protesting for LESS law enforcement in minority communities - think the world started when they were born. They would be shocked - shocked, I tell you - to
pick up a book discover that the same people bribing them for their vote today (and goading their naivety in 2020) once forced 100,000 MORE police officers onto the streets, increased funding for prisons by $10 Billion (the equivalent of about $1 Zillion in 2022 dollars), increased the financial and penal penalties for drug use and incarcerating a generation of blacks, whom Biden referred to as "predators" and Hillary termed "super predators."
The Clinton/Biden Crime Bill was the most - and perhaps last - successful federal program of our generation. Of course, it's now become politically 'uncomfortable' to acknowledge history - i.e. KKK, Jim Crow, Defense of Marriage Act, etc. - and much more fashionable to rewrite it, so these inconvenient truths have been worm-holed into oblivion (older than 17 minutes ago) by the media and scrubbed from the federal education curriculum. True classic irony that the people who have benefitted most from this program are unaware of its existence and the first and most vocal to denounce it (if they knew what the word denounce meant.)
But I'm old and I have a really good memory. And as my father says, "you can't BS a BS'er..." My point isn't to embarrass anyone, especially the Democrats for political action that they were (and should have been) very proud of. It's my classic circuitous "Bart" way of pointing out a.) hypocracy and b.) that it's been thirty years since the government was useful. If you disagree, that's great. I'm smug but don't know everything; I would genuinely appreciate knowing of another federal programs of similar size and scope that I should be as proud of since then. Please submit your entry to firstname.lastname@example.org...
It's okay, I'll wait.
Otherwise, I'll assume we can move on in agreement on this premise. So what does this have to do with your IRA?
Since the 1994 Crime Bill where Hillary Clinton and Joe Biden made comments that would prevent them from ever being allowed out in public today, it's been a slow and steady downhill slide for both parties and at all levels of government. A good portion of the Washington DC leviathan is little more than a municipal landfill of otherwise-unemployable but comfortably-unionized Americans who a.) cannot get fired and b.) need to earn an income that exceeds their commiserate value to society. So I get it. However, the decline has been so consistent and so subtle that before your prefrontal cortex kicked in just now, you might have been initially offended by the truth above. The problem with modern life is it's very hard to accept facts and much easier to live in a delusional fantasy world. (See Los Angeles, New York, Baltimore, Atlanta, Detroit and Chicago...)
Take for instance, the police force at the U.S. Capitol on January 6, 2021. They had one job to do, and only had to do it correctly one day in their entire career. They were armed to the teeth, and their adversaries had face paint and Viking helmets. Yet, I think we can all agree that they were unqualified for their hired role. As a result, the day did not go well for them, the mob nor the country. Unless opening doors, standing aside and ushering in a mob of buffoons and hooligans is standard accepted protocol for protecting a government building housing our highest-ranking Americans.
If these officers were protecting the offices of Stevens Wealth Management, I would still be paying their unemployment insurance today. But when you protect and serve the most powerful politicians in the world, I guess everyone keeps their job, gets a pension and perhaps even a lifetime of "trauma." Nice Work If You Can Get It.
As we reflect on the impact and success of programs launched by our government, there's sufficient evidence to argue that they almost always end in utter and abject failure. For example, the government's respective wars on drugs, crime, terror and poverty have not only worsened each of these predicaments but disproportionately hurt those most afflicted as a consequence.
Despite this, I admit that I'm humored that our legislators now think they can win a war against Earth's changing weather, by exporting global fossil fuel pollution to Venezuela and Iran, while also rapidly transitioning to cars with batteries MADE with lithium that STORE energy CREATED by coal and mined by children? Really?
If you're betting on U.S. politicians winning a war against climate change... may I introduce you to Iraq and Afghanistan...
- How obtuse, incompetent and arrogant would you have to be to believe that the U.S. Congress has the power and intelligence to change the Earth's weather?
- They claim they can fix the weather but cannot fix inflation because it's uncontrollable - otherwise would our economic suffering not be solved?.. when in reality these two crises are just the opposite?
- One problem is a phenomenon that has virtually no impact on your life and never has for a single day since you were born (please show me on the doll where the climate has hurt you..) while one is literally destroying your life and labor and wealth literally every single day of your life and will ultimately end America as a country. Only one of these crises is 1000 times more likely than the other to kill you in the next 10 years. (And no, I'm not agreeing that it's the climate like AOC.)
- Yet for some reason - which I'd LOVE to unpack with anyone willing- we worry more about the climate warming 1 degree per century than we do about inflation destroying our wealth (i.e. the ability to provide food, shelter and clothing) 1% per month. Is that odd to anyone else?
- Why are we humans so terrible with statistics and risk management?
- What does that say about them- and us- they they want control over the earth's environment, but refuse to acknowledge - much less abdicate- control of the currency in which we store our life's work?
- What historical evidence and/or precedent would one use to support the view that modern politicians can control the earth's climate?
- What historical precedent would one use to support the view that politicians cannot control inflation (i.e. the printing of the currency?)
- Have you heard Chuck Schumer, Nancy Pelosi or Mazie Hirono speak in public? Does "Cocaine" Mitch McConnell strike you as a particularly moral, intelligent or effective statesman?
Maybe California (PG&E) should have allocated less taxpayer money (i.e. labor) on windmills and solar panels and more on protecting the power grid. The same one that fails every summer and causes the majority of their environmental calamities. Now, our House and Senate are fighting wars on two other fronts- inflation and Russia. Through government intervention. Because that always works out so well (said no one ever.) Let's check back in a year to see how those wars turn out, but I already have a pretty good idea. And I'm setting up a line of credit for anyone who wants in on this action.
I mention all this not to embarrass the federal government (they're frankly doing a better job of that than I could ever conceive of) but because, for the first time in the history of mankind, our leaders in 2020 attempted to sever the historical connection between the labor (productivity) that they had outlawed and the value (money) that derives from the labor.
I don't have a problem with acknowledging climate change or even fighting it, my primary qualm is with expecting the government to fix it. Because in my 40-odd years of life, I've yet to see a single problem that they haven't made worse. If anything, I look at the three main crisis of the 20th century (9/11, The Great Financial Crisis and COVID) as representing colossal federal policy failures as both their cause and effect.
There is literally no amount of money too large for our government leaders to misallocate, squander or make disappear. We would be far better off giving that money to the citizenry to invest and spend, rather it than taking it from the people and then losing it, thereby making the problem worse for us. Unless you think the government's respective wars on crime, drugs, poverty, terror have been particularly effective. To me, they seem primarily designed as jobs and welfare programs, money-laundering operations and grift. We are no better off solving these complex problems than we were a generation ago.
And they literally can't out of their own way.
The sad truth is that 100% of our social solutions will come from the ground up and not from the top down. No one would argue that yet it begets the question, then "why do we need government?" It used to be solely to protect us from threats domestic and abroad, but at some point they became our greatest threat, like 100% of all previous empires.
So what's the recipe for success?
Work really hard, earn a lot of money, save as much of it as possible and invest what you can afford. Save and invest modestly every month but prepare to invest the most when the government invariably breaks the world - 9/11, Great Financial Crisis, Wuhan Virus, inflation, etc. because that's when the best deals reveal themselves. Begin to understand that the generational crises caused by government incompetence and corruption are actually gifts that only come around once in a decade. That's the time to act, to enact change on your own. When it comes to big, hairy problems in your community and country, you literally cannot do worse than a career politician that's bored, beholden to their party leadership and owned by lobbyists. You can likely change the world if your cause and argument are strong enough. When there argument is not, they censor. When their "innovations" crumble, they then insert their blood funnel into the private sector- what small business innovates, the government first regulates and then appropriates (like crypto, for instance. It was never meant to succeed.) For the rest of us, if our cause is not self-evident, it dies. That leaves the best ideas remaining to eventually rise to the top.
Like Pop Tarts, Nutella crepes and pineapple on pizza. That's the beauty of free-market capitalism. That's why the US is the cleanest shirt in the hamper, and not to be bet against.