March 26, 2020
A Gluttonous Feast Behind the Curtain
By Steven Longenecker
The streets in Washington, D.C. are deserted…
An ambulance drives past, siren on. A bus, a car. Another bus – this one empty.
The Yoshino cherry trees at the Tidal Basin are in peak bloom. But the feds have blocked all routes to view the delicate, pale pink blossoms, citing too-large crowds. They brought in barricades, then the Capitol Police, and finally added the National Guard. The tanks have, so far, been kept at bay.
“Stay home!” our dear politicians say… as they meet behind closed doors, planning how they will divide the spoils.
The real action in D.C. over the past few days has been on Capitol Hill. It is a lobbyist bonanza – with thousands of crony-capitalist hands outstretched for their share of government trillions.
“Shut it all down!” those same politicians cry. After all, no one wants more people to die.
But we can’t help but notice that “shut it down” helps the biggest, most entrenched businesses and individuals – those same folks lining up to feed at the government trough – at the expense of everyone else.
We have warned for years now that hard times were coming.
And earlier this month, on March 2, we begged you to treat the market volatility as a chance to recognize whether you were taking too much risk. We wrote:
It’s one of the most valuable lessons you can learn. And right now, you could consider it learned for “cheap.”
After all, although the S&P 500 plunged more than 10% in the past week… that only puts it back to about the level it was last August. And it’s still up about 300% from the low it saw in during the last recession.
Remember that no matter how calm the market seems, something can always go wrong.
Since then, of course, the market is down another 20%. Something did indeed “go wrong.”
$25,000 for Journalists… $10,000 for Student-Loan Borrowers…
$1,200 for You?
Today, Americans of all stripes – from out-of-work waitresses to cab drivers – wait for the details of the government’s free-money promises.
The full $2 trillion package is the biggest stimulus jolt of money in American history. So what will the total be for the masses?
As we write, the sum seems to be settling around $300 billion… or about $1,200 each.
Look over there, citizen. Take your check and stay at home. Turn on the TV. Put up your feet.
Pay no attention to the rest of the $2 trillion – the gluttonous pig-roast feast behind the curtain where the whitest of collars are stuffing their faces…
Boeing, most recently the manufacturer of a batch of 737s that can’t fly, wants $60 billion… but only if the government doesn’t put strings on its largess. After all, it has no shame about taking practically all its earnings over the past 10 years and handing the profits to shareholders and executives via buybacks and bonuses. Socialize the losses… capitalize the profits. Crony capitalism at its finest.
Major airline companies want a $50 billion bailout “by the end of March” or else United Airlines CEO Oscar Munoz will slash payrolls by 60% or more. What happened to all those “$50 to choose your seat or we’ll put you in the bathroom” fees?
Cruise-ship companies Carnival, Royal Caribbean, and Norwegian are each jostling for billions in American greenbacks… despite incorporating in island nations to dodge U.S. taxes and labor laws and employing practically no Americans. Let their creditors take over their assets… the ships are all still floating.
The restaurant industry wants $145 billion… or roughly half the checks sent to regular Americans. That’s more than $200,000 for every one of the 700,000 restaurants in the nation. After all, how otherwise will America possibly feed itself? Other than by picking up a frying pan and exploring the forgotten wilds of the kitchen.
Add in the casinos, the travel planners, the retail franchise owners, the hotels and motels… all of whom have suffered thanks to the government shutdown of the economy. We had some sympathy until we saw that billionaires Elon Musk and Jeff Bezos have asked for $5 billion for their respective spaceship companies.
Even journalists are getting in on the game. They’re asking for $5 billion… including a $25,000 cash payment to everyone in a “newsgathering position.” (Your author wonders if that might include him… He suspects not.)
The suckling pig has arrived for the banquet.
And for the final coup de grâce, the thin, long knife shoved into the neck – severing each arterial blood vessel… we look to the additions championed by House Speaker Nancy Pelosi and Majority Whip James Clyburn… who said the relief bill was “a tremendous opportunity to restructure things to fit our vision.”
- Funding for a performing arts center here in D.C.
- Diversity requirements on how you might run your business
- Provisions for a federal takeover from states for elections
- A “cash for clunkers” program for old airplanes
- $1 billion to bring back the “Obamaphone”
- A $15 minimum wage
- And a minimum of $10,000 in student loans eliminated per borrower
The pig is basted with lard, salt, and wine. Watch it turn on the spit. Its crispy skin glows a dark, golden red. Time to feast.
End of the Decadent Age
As always, the vast majority of this $2 trillion in money goes to the best-connected and wealthiest among us.
And where does it come from?
Why, you, dear reader.
It ultimately comes from you.
In December, we asked when the government’s “dam of funny money” would break. We predicted:
Probably at the worst possible time… right as the economy enters a recession… as huge amounts of corporate debt become due… and as the U.S. consumer makes even bigger purchases funded by debt – whether that’s four years of college, a large mortgage, or a luxury SUV.
The government has no real means to pay for all these handouts. It will simply issue IOUs on top of IOUs. It is broke… more broke than any government has ever been before in the history of the world.
Of course, we didn’t foresee that the New Age of Decadence would end quite this soon. But we did note the next crisis would be a disaster for most Americans.
Our advice was simple…
We recommend that you do what the government won’t… pay off any debt you might have, save rather than spend, and invest in strong businesses that will survive the next crisis.
In 2015, one man predicted that within five years we’d see a “new crisis of epic proportions.” He added that the way we live, work, travel, retire, invest… everything is going to change – some of it in ways we would never expect.
And this afternoon at 3 p.m. Eastern time, he’s going to share exactly what he’s doing as this crisis continues – and where he’s putting $1 million of his own money. You’ll also learn…
- Why gold has NOT performed the way most expect it to during a crisis
- The two reasons why this crisis unfolded so quickly
- How the government’s drastic restrictions will impact the market this year
- Exactly which stocks are likely to recover the fastest
He even has a new prediction for the exact date the stock market will bottom.
Now here are some of the stories we’re reading…
Across America, state-run insurance systems are buckling under the weight of the new coronavirus’s economic fallout. National jobless claims last week saw the biggest spike since the aftermath of Hurricane Sandy eight years ago, jumping 33% to 281,000. This Thursday’s figure could be as high as 3 million – quadruple the record set in 1982.
Lobbyists Pile On to Get Wins for Clients Into Coronavirus Stimulus Package
That lobbying approach has taken hold in Washington in recent years as Congress has approved fewer major pieces of legislation. Each year, industry advocates try to add measures to unrelated bills that have momentum, such as must-pass annual bills to fund the federal government. Now lobbyists see the stimulus bill as an ideal piece of legislation to hitch a ride on.
Pentagon sees coronavirus crisis lasting several months
The Pentagon is assuming the coronavirus epidemic in the United States will last at least several months, and that some countries are at risk of “political chaos,” its top officials said Tuesday.
Day 1 of World’s Largest Lockdown: Desperation and Police Blockades
In one state, police officers have staked out roads and highways, stopping any passing motorists and demanding to know why they were outside their homes. In another, doctors have been run out of their homes, shunned as carriers of the coronavirus.
Carnival Chairman Micky Arison Makes “Generous Offer” to Supply Idle Cruise Ships as Floating Hospitals to FEMA
FEMA was roundly criticized for paying a total of $236 million for the three Carnival ships over the course of six months, an amount which the Washington Post called an “exorbitant price.” The Post commented that if the ships were at capacity for six months, the price per evacuee would total over twice what an average passenger would pay which “would include entertainment and the cost of actually making the ship move.”
And let us know what you’re reading at[email protected].
Publisher, American Consequences
With P.J. O’Rourke and the Editorial Staff
March 26, 2020