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The Daily Reckoning | Friday, August 17, 2012 Ongoing crony capitalism and living with the “new normal”... “Jon Corzine: We affectionately request the pleasure of your presence”... Plus, Jeffrey Tucker reviews “what might be the finest book ever written by a sitting member of the US Senate”, and plenty more... ------------------------------------------------------ CUSTOMER SERVICE ANNOUNCEMENT: My records say we could owe you, dear subscriber, exactly $1,044 in subscriber benefits. You are eligible to claim this amount due to your loyalty as a subscriber. However, you have only until midnight August 21st to let me know whether you want to receive these benefits... or simply let them expire. Please let me know as soon as possible. To learn how to claim these benefits, simply click here. Sincerely, Andrea Michinski Customer Service Director, Agora Financial Quote of the Day... “The common argument that crime is caused by poverty is a kind of slander on the poor.” — H. L. Mencken A Cordial Invitation The Appalling Nature of the Politician-Bankster Relationship Eric Fry Checking in from Rancho Santana, Nicaragua... Down here in Nicaragua, it is difficult to complain. Almost impossible to gripe. And if you find yourself doing either one, you shouldn’t be here in the first place. This idyllic locale is kind of an organic, and highly concentrated, blood-pressure medication (perhaps blended with just a smidge of Lexapro). But a few thousand miles to the north, where Wall Streeters cheat and politicians protect them, legitimate complaints and gripes are easy to come by. There are plenty of obscene abuses of power and miscarriages of justice. You’d have to be comatose — or in Nicaragua — to miss them. Crony capitalism, and the injustices that flow from it, have become such a dominant force in American society that a return to “normal” feels like a low-probability bet. Epitomizing the injustices that have become all-too-normal in modern America, The New York Times reported yesterday that federal authorities are unlikely to bring any criminal charges whatsoever against any of the former executives of the bankrupt M.F. Global, despite the fact that $1.6 billion of clients’ funds remains “missing.” This latest travesty of justice would seem to confirm what we observed in this columnjust two days ago: Wow!...It’s getting harder to hang a felony charge on a past or present Goldman exec than it is to hang panties on a porn star. The darn things just keep sliding off... Remember, the Justice Department is one of the same government agencies that can’t bring itself to pose a single embarrassing question to Jon Corzine, former CEO of Goldman Sachs, former New Jersey Senator, former CEO of the fraudulently destroyed M.F. Global and perennial scumbag. In particular, the Justice Department can’t bring itself to ask Corzine what happened to the $1.6 billion of customer funds that he (allegedly) “disappeared” while overseeing M.F. Global. Lamentably, your editor was not exaggerating. Despite a 10-month long investigation into the collapse of M.F. Global, the Times reports that federal investigators have not yet spoken to Jon Corzine! Says the Times: “[F]ederal authorities are seeking to interview the former chief of the firm, Jon S. Corzine, next month, according to the people involved in the case. Authorities hope that Mr. Corzine, who is expected to accept the invitation, will shed light on the actions of other employees at MF Global.” How civilized! Federal authorities are extending an “invitation” to Mr. Corzine that they hope — breathlessly, we would imagine — he will accept. Something ain’t right here, folks. When $1.6 billion disappears, someone took it. Maybe Corzine was not the guy, but someone took it...and that someone was not “lax and porous risk controls.” In yesterday’s edition of Capital Account, Barry Ritholtz, addressee the baffling indictment-lite investigation of M.F. Global...as only Barry Ritholtz can. Check out this 3-minute clip from Barry’s half- hour segment: Barry blames injustices like the M.F. Global non-indictments on the fact that “politicians are in bed with the Banksters.” And so it would appear. This dangerous liaison has been going on for so long that there would seem to be no hope in sight. But if there were to be something resembling hope, Jeffrey Tucker, of Laizzez-Faire Books, believes it would ride into town in the simple garb of libertarian ideology. Therefore, Jeffrey finds much to like in what he calls, “[T]he finest book ever written by a sitting member of the US Senate.” That book is The Tea Party Goes to Washington, by Senator Rand Paul. Please enjoy Jeffrey’s review of Senator Paul’s work. Earn more this year than your 1% savings account interest... A colleague of mine recently put together a short video that’s designed to introduce average individuals like you to his new simple technique for profiting. Potentially even on your very first play. It costs nothing to view, but this second-generation Master Trader can help you get started as early as this Monday morning. Click here to watch now. The Daily Reckoning Presents Rand Paul’s Tea Party Manifesto Jeffrey Tucker Politics is a lagging indicator of social-cultural trends. Politics doesn’t lead change; it chases it, incompetently and long after the underlying reality is impossible to deny. This is why it makes no sense to put faith in politics. By the time politics catches up, the rest of the world has moved on. That said, I’ve just finished what might be the finest book ever written by a sitting member of the US Senate. It is daring. It is intellectually serious. It displays mastery of the subject matter. It makes courageous and counterintuitive claims, such as the need for across-the-board cuts in all spending, including military spending and middle-class welfare, by raising the retirement age. It takes on taboo subjects like the war on terror to call for normalcy and peace. It is not a perfect book, and all political books have to be graded on a curve. But in all, it represents a fundamental and thoroughly coherent alternative to politics as we know it and have known it for half a century. Despite my best effort to view this as another political tract, I found the book invigorating and even thrilling in ways I had not expected. The book is The Tea Party Goes to Washington by Sen. Rand Paul. It is his first book since he won the Kentucky race for US Senate, running as a Republican and delivering a crushing blow to his opponent despite amazing smears by the media and very little in the way of support from the GOP itself. Is this book a harbinger of things to come, a sign that the prevailing political paradigm is collapsing or that the political world is beginning to adapt to the dramatic ideological changes present in popular and intellectual culture? There is no way to know. But I do know that it is highly unusual that a book this bold and heterodox would come from a US senator. During Rand Paul’s run for the Senate, the media kept describing him as the Tea Party candidate. I’ve never understood this designation. “The Tea Party” seemed like a moniker attached to anyone mad at the system, but it didn’t describe a consistent philosophy. Tea Party rallies could feature speakers both decrying big government and also railing against Medicare and military cuts. Anger is not the same as an agenda. So what’s up with these people? This accounts for part of my skepticism on picking up this book. The book begins by explaining the term from his point of view. If he is right, count me in! But even if he is not right, I can now see why he embraced the Tea Party designation. It allowed him to distance himself from politics as usual, whether Republican or Democrat. It allows some degree of independent branding without the caricature that comes with words like libertarian. He actually spends a substantial part of the book explaining that he actually is a libertarian; that he is the right kind of conservative; that he is a constitutionalist; that he counts the so- called religious right among his allies, but finds no role for the government in pushing religion; that while he embraces the radical traditions of thought of the libertarian idea, he still regards himself as a backer of limited government. If you want to start putting acid tests on his thinking in the book, you will note that he is mixed on the subject of immigration, he is silent on the drug war (but silent is better than endorsement), and he seems to hold out the possibility of some war-making role for the state. If you are looking for a philosopher king, I would suggest other writers, most of them already dead. If you are looking for teachers, there are others who have a more-consistent outlook. But as statesmen go, Rand Paul is the obvious and natural successor to his father’s vision and political career. He spends a good part of the book’s first third detailing the human side of campaigning and the sheer wickedness of the smearing press and what Joe Sobran used to call the opinion cartel of the American system of political coverage. Most famously, Rachel Maddow interviewed Rand as if he were a member of the Klan. Rand didn’t catch on that he was being sandbagged until it was too late. All the details of this encounter are in here, all told in a very human way that provides an inside look into the consequences of daring to depart with convention in American politics. Once you move past the inside-baseball beginning and the history of the campaign, you get into the substance of this book, and it is here that you find something that is actually extraordinary. This is a political biography that is also a serious and high-level manifesto against big government in all its forms. He begins by taking on domestic spending, blasting favored programs of the left and right, hitting federal regulation of American life in sector after sector, slamming the war on civil liberties in all of its manifestations. So far, the book appears to be an outstanding presentation of the free-market side of the Republican Party. I’m not sure other Republicans have been this gutsy in attacking the Patriot Act, No Child Left Behind, bailouts of all sorts, and the like. In particular, he has great understanding of the boom and bust cycle and the role of the Fed in creating it. He cites all the right ideas in his interpretation of the 2008 crisis. But what I found most impressive is his opposition to big government in the area of military and defense. This has been a sticking point among conservative Republicans since at least the mid-1950s, when it first became convention for the political right to back cuts at home and expansions abroad. Ever since the end of the Cold War, there was a chance for a corrective here, but it has been stubborn in coming. To this day, it remains conventional for those who want domestic cuts to favor expansions of spending on the military — and it appears that the top of the ticket in this election will go this way yet again. Rand Paul will have nothing to do with this. He makes the link between welfare and warfare. “Like every aspect of federal expansion, the rise of our national security state represents government growth without end” “The great irony is that conservatives preach individual responsibility and reliance domestically but practice policies abroad that create dependence on foreign aid and dependence on foreign soldiers... Though an integral part of the conservative creed is to question government, it makes many Republicans nervous to even hint at questioning our foreign policy...” “There was a not-so-coincidental correlation between an ambitious foreign policy and astronomical spending that too many conservatives were willing to ignore because they had adopted the same utopian vision as the philosophically liberal neoconservatives.” He goes on to discuss the foreign policy views of Washington and Jefferson, endorses the ideological vision of Robert Taft from the 1950s, and says that Pentagon spending ought to be treated the same as any other spending program. He even goes further to say that it is impossible to have reduced government at home without taking on the warfare state. As for wars themselves, he says that he completely opposes the Iraq war. In principle, he backs the Afghanistan war, but then spends pages and pages exposing the graft and ghastliness of the whole enterprise, calling for an immediate end. Even aside from whatever positions Rand holds on this or that issue, this volume actually contains important research from other sources I had not seen. He offers a startling quotation from Gen. Hugh Shelton, former head of the Joint Chiefs of Staff. He reports that a White House official asked him, long before Sept. 11, if he could float a U-2 plane over Saddam Hussein’s military installations so that it could be shot down and precipitate a war. Shelton declined on grounds that he would not murder an American soldier. All credit to Rand for reporting the incident at all! More recently, he has taken up the cause of Internet freedom, opposing intrusive legislation that endangers digital rights. And while he has not come all the way over to opposing “intellectual property” as such, he has been a great opponent of laws that permit website takedowns and SWAT-team tactics against alleged infringers. If these views end up making advances and triumphing over the leadership in the party, the apple cart of American politics will be completely turned over. No, I don’t hold out much hope that this will happen, and I don’t regard Rand Paul as the savior of liberty in our time. Nor does he believe that he is. Even so, this book is an excellent manual about the truth of government in our time. It doesn’t give the whole truth, and his naiveté that government can be cut and contained, rather than completely dismembered, is frustrating for anyone steeped in the current radicalism of the liberty-minded world. Still, that a book this brassy and bold could come from a sitting member of the US Senate would have been unthinkable a few years ago. Buy your own copy of The Tea Party Goes to Washington by Sen. Rand Paul now from Laissez Faire Books. This is the book to own and read in order to understand the present and future of American politics. Regards, Jeffrey Tucker for The Daily Reckoning Editor’s Note: Jeffrey Tucker’s own book, A Beautiful Anarchy, is being released today from Laissez-Faire Books, and from what we can tell, this is surely another one for your “must-read” list. As Jeffrey himself puts it, “The book is a rhapsodic hymn to the digital age. I want the book to reduce and end our intellectual dependency on the state. It shows that every truly valuable aspect of our lives extends not from politics and the regime, but from our own voluntary choices.” Click here to pick up your copy today. And if you decide to join the ever-growing LFB Club, you can actually secure a copy for free. Click here to find out how. --------------------------------------------------------- Here at The Daily Reckoning, we value your questions and comments. If you would like to send us a few thoughts of your own, please address them to your managing editor at joel@dailyreckoning.com