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Drunken Bards of the Think Tanks

What do these people actually think about...?

WE'RE back at our post – watching...reading...trying to connect the dots, writes Bill Bonner in his Diary of a Rogue Economist.

And we begin by asking: What do "think tanks" think about?

The answer in a minute...

First, there is a dustup in the Washington, DC area. "Russiagate," it is called.

As near as we can make out, some people think the Trump team had or has illegal or inappropriate contacts with the Russian government.

This knowledge, such as it is, has apparently been obtained by illegal or inappropriate leaks of information gotten by illegal or inappropriate eavesdropping by government agencies doing illegal or inappropriate things for illegal or inappropriate reasons.

Does it matter one way or another?

Probably not.

The insiders are firmly in control no matter which way it turns out. What we have here is a fight among insiders – a scrap over who gets to rip us off...and how.

Mr.Trump has proven to be flexible and compliant. He is willing to go along with practically every scam and bamboozle in the Deep State repertoire.

But much of the establishment finds him unreliable, embarrassing, and vulnerable.

In Saudi Arabia, for example, the president delivered the big bucks to Raytheon and other arms merchants.

But then he stiffed the "alternative energy" industry by rejecting the Paris climate change agreement. Both moves, he claimed, would lead to "jobs, jobs, jobs."

Trump:

"I have just returned from a trip overseas where we concluded nearly $350 billion of military and economic development for the United States, creating hundreds of thousands of jobs. It was a very, very successful trip, believe me."

White House Press Secretary Sean Spicer:

"The visit also included historic economic development deals for the United States, totaling well over half a trillion Dollars and the creation of tens of thousands of American jobs."

Here, we get out the pencil and begin drawing some lines. First, we put a little note on the margin:

"Huh?"

The Saudi feds have money. They get it by selling oil to people who need it to power their factories, fuel their cars, and heat their houses. The money comes out of the productive, win-win economy.

Every penny of this money gets applied to something. They can use it to buy tanks and fighter jets. Or they can buy tomatoes or make movies.

Big arms deals get the headlines, but do they create more jobs other than spending?

Does money spent by the feds ever create more wealth and satisfaction than money spent by the people who earned it?

The answer to both those questions is "no." We know that only win-win deals add real wealth. Government arms deals are not win-win.

"But wait," you say. "They might buy their tomatoes from anywhere...but we've got the high-tech killing machines. When they buy from Raytheon, they put Americans to work."

Hmmm...Somewhere, someone looks at the Big Scheme of Things. He must wonder: Why is it better for an American to have a good job than, say, a Canadian?

He must also wonder: Why is it better to pay people to build a tank than to build a truck?

Fighter jets are bought by the government...with money it took, by force, from its citizens.

Most often, military spending serves no purpose other than to protect or enhance the power of the government. Only rarely does it pay to build a tank.

The last time American civilians were targeted by a conventional military attack was when Sherman's Yankee army marched through Georgia – more than 150 years ago.

Like government itself, a little bit of "defense" spending may be necessary, but it fast reaches the point of declining marginal utility. Then, it is all downhill. The money is either wasted...or used to create a bloodbath.

In the Middle East, it's been going downhill for many decades; the odds that these weapons will be put to any honest service – such as preventing an attack on Saudi Arabia – are close to zero.

Weapons and warfare are favorite Deep State scams; they are ways to transfer wealth and power from the people who earn it to governments and their crony military suppliers.

And here, we draw a line – from "The Donald's" trip to the Middle East...to a think tank called the Center for Gulf Affairs at the Middle East Institute...to the Raytheon corporation.

Reports Just Security, an online forum for national security issues:

In March of this year, the Senate Foreign Relations Committee invited former ambassador Gerald Feierstein – director of the Center for Gulf Affairs at the Middle East Institute – to speak about the situation in Yemen and about his views on the sale of US arms to the Saudis.

As one might have anticipated from his interview in the Washington Post, Feierstein told the committee, "Accusations of war crimes leveled against Saudi and Coalition armed forces and threats to end arms sales to the Saudis have the potential to inflict long-lasting damage to these relationships." Limiting the supply of munitions, he said, would be "counter-productive"...

Never disclosed in the Washington Post interview or in the Senate hearing was the source of funding for Feierstein's Middle East Institute. According to its most recent public report, the Institute counts among its chief donors leading members of the Saudi-led coalition in Yemen and major arms manufacturers.

Saudi Arabia and Kuwait provide the highest level of support as "Platinum Sponsors," and the UAE [United Arab Emirates] is also a donor. Raytheon, the manufacturer of the very weapons at issue in the Senate hearing, is a Gold Sponsor of the Institute. It is worth noting, of course, that the Middle East Institute is not unique in Washington. The defense industry and foreign governments pump money into many think tanks.

What do think tanks think about?

What ever they are paid to think about, of course. Like drunken bards, they sing praises to whom ever will buy them a drink.

Bill Bonner has co-authored a number of New York Times Bestsellers including Financial Reckoning Day, Empire of Debt and Mobs, Markets and Messiahs. In his own opinion, Bill's most recent title, A Modest Theory of Civilization: Win-Win or Lose, is his best work yet. Bill also founded The Agora, a worldwide community for private researchers and publishers, in 1979. Financial analysts within the group have exposed and predicted some of the world's biggest shifts since that time, starting with the fall of the Soviet Union back in the late 1980s, to the collapse of the Dot Com (2000) and then mortgage finance (2008) bubbles, and more recently the election of President Trump.

See full archive of Bill Bonner articles

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