Cheap money wins as economy looks like booming. At first...
TODAY, a simple proposal for making America great again, writes Bill Bonner in his Diary of a Rogue Economist.
But first an update on our recent trip to Ireland.
When we left you, we were visiting our headquarters in the town of Portlaw in County Waterford, Ireland, where we have become the biggest employer.
Portlaw is not a fancy town. It is plain, modest, and tidy, with rows of small factory-worker houses – most of them stuccoed and painted much like the old industrial bedrooms of Baltimore.
In the tea shop on Friday, the only place to get a hot sandwich, we noticed all the seats were taken. Children out to lunch (school is still in session) took up many of the tables. The few others were crowded with newcomers – our employees.
Though three or four houses are for sale – from about $80,000 to $350,000 – one of our American exports said he could find nothing for rent.
"I bet these prices are going to go up," said our Baltimore transplant. "It's not very fashionable. But it's so cheap and easy to live in Portlaw [rather than commute to and from Waterford City, 30 minutes away], demand is bound to increase.
"And there's a bar for sale. If I had the energy, I'd buy it. Nobody ever lost money owning a bar in Ireland."
Over the weekend, we toured the oldest house in the area, Curraghmore. It was built by the Anglo-Norman de la Poer family beginning in the 12th century.
After conquering England in 1066, some of the Normans kept going west. Led by Richard de Clare, they landed near here and soon were masters of the ground.
But rather than keep close connections with their cousins in England and Normandy, they picked up the Gaelic tongue and customs and were soon more eager to keep out the outsiders than the natives themselves.
The estate passed from generation to generation, only once through the female line; it is still in the family 800 years later.
Many great houses in Ireland have been abandoned by their owners, fallen to ruin, or have been turned into golf estates and tourist attractions. This one is still in use...by the same family.
They live here year-round – in much the same grand style they always did. Hunting parties and large, formal dinners are weekly affairs. The rest of the time, the family rumbles around in the huge house amid the accumulated glories and trivia of eight centuries of history.
Portraits cover the walls. Memorabilia fill the shelves. Furniture, much of it hundreds of years old, fills the open spaces.
One ancestor shot lions in Africa...and brought them back to prove it! One fell off his horse hunting foxes nearby and broke his neck.
Another attempted to rescue Gordon at Khartoum. There's a painting to illustrate his illustrious relief effort; he is dressed in a white uniform on the deck of a British warship headed up the Nile.
"General Gordon practically begged his commanders for reinforcements," explained the butler who gave us the tour.
"But headquarters dilly-dallied until the situation was dire. Then they sent three ships up the Nile. Two of them couldn't make it past the short artillery.
Only one got through. But it was too late. When he arrived in Khartoum, he found the entire British force slaughtered, with General Gordon's head on a post in front of the fortress."
Ireland supplied the British Empire with many of its finest fighting men.
The "British" general who surrendered to Washington at Yorktown was an Irishman, General Charles O'Hara.
The "Iron Duke" of Wellington was Irish, too...something he was not eager to advertise. When asked about it at a dinner party, he replied: "Just because you are born in a stable, it doesn't make you a horse."
None of the Irish officers in the British Army, as far we know, came back from his foreign adventures as ignobly as the Anglo-Irish general who commanded the British forces at the Battle of New Orleans, the final major battle of the War of 1812.
Major General Sir Edward Pakenham was filled with grapeshot by one of Andrew Jackson's backwoodsmen. The ill-tempered aristocrat was shipped home to Ireland in a cask of rum.
Arriving at his estate at Tullynally, County Westmeath, a relative remarked: "Well, the general returns to us in better spirits than he left."
But let's get down to business.
Last week, we gave our opinion about what would have to be done to bring "transformational" change to the US.
Dear readers needn't worry: None of those reforms we proposed will be enacted.
That's just the point. When the insiders get control of a government, the last thing they want is real change. Instead, they fight among themselves over who will get what – some of it merely symbolic, most of it material.
Our proposals can be reduced to a single sentence: Make America Safe for Win-Win Deals Again.
Why are win-win deals so important?
In a nutshell, without win-win deals, there is no progress...no freedom...and no civilization. Take away the win-win deals and the whole shebang goes into a slump – the economy, the government, and society.
That's what we're seeing in America...with lower growth rates, more debt, and more meddling by the authorities.
It will get worse, we predict.
That is not a world that your editor looks forward to.
That is a win-lose world...and it wears many different wigs and moustaches, pretending to be an angel of mercy one day...and a national hero the next.
That is the world Russia entered in 1917...and stuck with for the next 70 years. It is the world, too, that Germany entered in the 1930s...and emerged from dazed, shell-shocked, and broke in 1945.
China sank into it completely (after a ghastly civil war and brutal invasion) in 1949; it largely escaped in 1979 with the economic reforms of Deng Xiaoping.
Nations and economies are always in danger of falling for the win-lose world. It promises quick solutions...easy money...and the hollow pride of bullying others.
But in public life – as in private life – win-lose is a loser.