Ship of fools
On a cruel sea
Ship of fools
Sail away from me
It was later than I thought
When I first believed you
Now I cannot share your laughter
Ship of fools

– Jerry Garcia

November 15, 2024— We start today with a quote from Racket News’ Matt Taibbi on the morning after the election last week:

Eight years ago, Donald Trump became president amid a flurry of miscalculations and arrogant misreads by political and media professionals from both parties. The commentariat first insisted he couldn’t win the Republican nomination (we were told to await the “real candidate” as he rose in polls), then told us he couldn’t win the general without endorsements and corporate backing. Then Trump did win and it became instant conventional wisdom that this impermissible political choice proved the rural malcontents who voted for him were moral troglodytes and white supremacists deserving of their fates.

A strategy of relentless vilification on the one hand and self-congratulation on the other became standard. “I won the places that represent two-thirds of America’s gross domestic product,” chirped Hillary Clinton. “The places that are optimistic, diverse, dynamic, moving forward.” A list of pundits (Paul Krugman was a favorite) concurred: the Trump voter was a knuckle-dragging parasite living off the coastal wealth creators, whose votes mattered more. When Joe Biden won in 2020, media were quick to note Trump was only supported by 29% of GDP, practically the same thing as only being supported by 29% of people. White Rural Rage became the most predictable New York Times bestseller ever.

The cult of mass political psychosis was mind-blowing.

We remember in 2015 thinking and writing in these pages that the worst thing that could happen to American politics is when “the Donald,” as he was once known, entered the race for President. “Politics is supposed to boring,” after all, observed Bernie Sanders (the day after someone tried to kill Trump in Butler, Pennsylvania.)

The sentiment – that the Donald was better off yelling “you’re fired” at starry-eyed sycophants on prime time TV than trying to reorganize the free world – has lingered… until this morning.

Then this realization: The flurry of cabinet nominations this week has produced some of the best reality TV since Survivor hit the airwaves in Sweden on September 13, 1997 and shocked the television establishment. Among other things, it paved the way for Trump’s The Apprentice which ran on NBC from 2004 to 2017.

Without those novel approaches to keeping the corn-syrup La- Z-Boy surfers comfortably numb, we wouldn’t have had this entertaining run of mass media hysteria.

Taibbi’s summary goes something like this: The dustbin of history awaits thousands of race-baiting professional panic-mongers whose craven dishonesty gave Donald Trump a popular-vote mandate.

“Voters know exactly who they voted for,” warns a TIME magazine headline this morning.

Indeed.

After years of arrogance and condescension from media pundits pushing an inscrutable and frankly confusing woke agenda — complete with high taxes, a big centralized federal government agenda and a landslide of agency rules — they got what they had coming to them.

And they don’t even know what to say about it. That’s the entertaining part.

A single episode of Stephanie Rhule’s 11th Hour is all you need to watch to see the litany of excuses, justifications, laments and confusion among the consultants and strategists who have made their livings hating on the Donald for sport.

And, the cheerleading.

Oy, how tortured was the data used to extol the last gasp of the Biden administration; the salvation of a dynastic Democratic establishment founded to restore a strong central government in the wake of the Reagan supply-side revolution?

How embarrassing are the naked emperors of the legacy media establishment left scratching their private parts in public today?

I’d planned to write about the challenges of the new Department of Government Efficiency (DOGE) this morning. There will be ample time for doing just that.

The suggestion of such a non-governmental agency to streamline government, cut out waste, and save tax-payers money is only novel to today’s pundits because the goofy billionaire Elon Musk is associated with it. The reality TV version of Marvel’s Iron Man.

We’re aware cracking a history book is anthema to the media establishment as it stands today. As such, it will be shocking for most of them to know that the DOGE is actually the 5th such commission since former President Herbert Hoover established two of them, first from 1947-1949, and the second from 1953-1955.

Meaning, to my simple mind… government waste and efficiency have been an issue of concern since the end of World War II.

The Grace Commission from 1982 to 1984 was Reagan’s attempt to reign in spending during his tenure. Inflation slayer Kurt Volcker chaired an eponymous commission under the first Bush in 1989. Then Al Gore gave it a shot from with the National Performance Review several years later, from 1993-1998.

What makes the DOGE different this time? We’ll see. Having studied the growth of the Federal mandate for the better part of our adult lives, it’s hard to imagine the entrenched interests in Washington giving way to another toothless non-governmental agency – even with the star power Musk and Ramaswamy bring to it.

History aside, the bar set for the dynamic duo is pretty low.

Simply reversing the barrage of new “economically significant” rules from the last Presidential term would qualify as a success in anyone’s book:

We were working full-time at the Cato Institute shortly before Grover Norquvist uttered his now infamous phrase during an NPR interview:

“I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.”

Through that lense, the bar for Elon and Vivek’s excellent adventure through the “deep state” bureaucracy is… umn, much higher. Stay tuned…

We’re setting off across the country today, taking the pulse of the nation as we go.

As we write, we’re on a flight from Baltimore to Indianapolis to visit our son who’s in his senior year studying animal sciences at Purdue for a Dad’s weekend. There we expect  to find an interesting cross-section of the electorate still politically supercharged. Penn State is scheduled to whup up on an abysmal Boilermaker side tomorrow.

The more interesting leg of the trip starts Sunday: We’re making our way out to the Left Coast to San Francisco, where we’ll meet, of all people, former mayor and California kingmaker Willie Brown. (Yes, that Willie Brown).

More as the great nation unfolds before us. In the meantime, our intrepid portfolio strategist Andrew Packer takes a more sobering stab at the dizzying array of news items we’ve been subjected to this week.

Having been faced with the question “do elections matter?” while attending the Mises Institute confab in Fort Meyers last weekend, Mr. Packer felt compelled to reply with the below.

Up front, we admit Andrew is younger and a little more pragmatic and optimistic than we are. Those are good qualities to have when thinking about the investment world. ~ Enjoy, Addison

 

Why the 2024 Election Matters – Bigly

Andrew Packer, Grey Swan Investment Fraternity

Do elections even matter? That was the big question asked last Saturday in Ft. Myers, Florida, at a symposium held by the Mises Institute.

The free-market institute follows the teachings of Ludwig von Mises and Murray Rothbard, the top members of the Austrian school of economics in the 20th century.

And a group of about 75 folks, from college students to retirees, made the trek to Ft. Myers to hear what four of the Institute’s top scholars had to say.

Tom DiLorenzo reviews how government is structurally resistant to change. (Source: Mises Institute)

As for the question asked … while it may seem like an uphill battle, yes, elections can matter.

Professor Mark Thornton noted that it took decades of grassroots activism to turn marijuana legalization from a pipe dream to a reality across many states. No incumbent politician would touch it.

All the while, the only thing the prohibition of marijuana did was make it more potent, leading users to even more potent drugs such as crack cocaine.

As for structural changes in how government operates, rather than a social issue, the path is even more treacherous.

As Tom DiLorenzo noted, members of Congress have a pretty sweet gig.

They get paid travel to and from Washington, D.C. They have a paid staff that can reach out to constituents at a level that an outside candidate would need millions of dollars in funding to match. That’s a massive barrier to entry that keeps out nearly all the qualified candidates you’d want in Congress.

Once elected, not only do they make over six figures per year, and earn a massive pension and top-of-the-line healthcare, they’re essentially set for life.

Why? Because Congress has a 94% re-election rate over the past 60 years. Once you win the primary, you have a strong chance of representing your district until you decide to retire or the Grim Reaper decides for you.

In the Senate, the level is closer to 90%. Given the six-year Senate terms, that’s not so bad.

But it’s hard to argue that elections matter when voters chose the status quo overwhelmingly when given the chance.

I noted months ago that my member of Congress certainly seemed to be benefitting from the trappings of office, selling shares of a soon-to-fail bank only to conveniently buy shares of the bank that bought the failed bank’s assets for pennies on the dollar.

This kind of pedestrian corruption is commonplace. And in a light-blue county where Donald Trump came within 2% of flipping, my incumbent Congresswoman beat her opponent by over 10 points.

Why the 2024 Election Matters

Another reason why elections don’t seem to matter is this: Even if you won an upset, how much would you really be able to change?

Donald Trump’s first term is a good example of this. Trump came in treating the federal government like a business, assuming that as the new CEO, the staffers would stay onboard and remain loyal to the new CEO’s vision.

Oops!

While Trump had a few achievements, such as removing seven regulations for every new one he proposed, far in excess of the “cut two regulations for every new regulation” campaign promise in 2016, it’s hard to move in one direction when bureaucrats dig in their heels.

It’s also hard to fire the humanlike creatures, too. That’s thanks to the 1880s Pendleton Act, which “professionalized” the civil service and ended the spoils system.

Today, a government employee is set for life, and often at a salary in excess of a comparative job in the private sector. Before the 1880s, every bureaucrat served at the pleasure of the President, whoever he was, and job security was four years maximum. We also used to have a lot fewer bureaucrats.

With Donald Trump’s reelection, however, that could change — and big. The Department of Government Efficiency (DOGE), which will be run by Elon Musk and Vivek Ramaswamy, will be looking to make deep cuts in government spending.

Even if they can’t win on every issue they find, bringing the public’s attention to wasteful spending could, in the court of public opinion, lead to some small reductions in government. Over time, those small savings can add up.

Plus, Trump is looking to change the classification of thousands of government employees to at-will. That will make it easier to reduce the federal workforce, as will a hiring freeze, allowing retiring government employees to gradually shrink the size of government employment over time.

It remains to be seen if the size of government will follow suit with a shrinking of the federal workforce. But it’s a step in the right direction.

Expect the entrenched bureaucracy to go out kicking and screaming. But as with deregulation, over time, the results will be less burden on the private sector, and more economic growth.

Yes, elections can matter. If the right people pushing for the right changes end up in the right place at the right time. Time will tell if that’s the case with Trump 2.0.

Trump will likely be able to make some changes his time around that were impossible during his first term in office. The election uncertainty is over, and Trump 2.0 will be hyper-focused on economic growth. Shrinking government could just be an added bonus.

~~ Andrew Packer, Grey Swan Investment Fraternity

Regards,

Addison Wiggin,
Grey Swan

P.S. “He who is unfit to serve his fellow citizens wants to rule them,” Ludwig von Mises once quipped.

Your chance to agree or disagree with Ludwig or Andrew comes right here: addison@greyswanfraternity.com.