The Corruption of America, Porter Stansberry, America is in decline, Americans Are Getting Poorer Fast, Entitlement root of many serious cultural problems
The following are exerpts from a well written article by Porter Stansberry on many of the economic and social woes of America. The full article is worthy of your time.
“The Corruption of America”
“Why I’m still bullish on America
By: Porter Stansberry
The numbers tell us America is in decline… if not outright collapse.
I say “the numbers tell us” because I’ve become very sensitive to the impact this kind of statement has on people. When I warned about the impending
bankruptcy of General Motors in 2006 and 2007, readers actually blamed me for the company’s problems – as if my warnings to the public were the real problem, rather than GM’s $400 billion in debt.
The claim was absurd. But the resentment my work engendered was real.
So please… before you read this issue, which makes several arresting claims about the future of our country… understand I am only writing about the facts
as I find them today. I am only drawing conclusions based on the situation as it stands. I am not saying that these conditions can’t improve. Or that they
won’t improve.
The truth is, I am optimistic. I believe our country is heading into a crisis. But I also believe that… sooner or later… Americans will make the right
choices and put our country back on sound footing.
Please pay careful attention to the data I cite. And please send me corrections to the facts. I will happily publish any correction that can be
substantiated. But please don’t send me threats, accusations against my character, or baseless claims about my lack of patriotism. If I didn’t love our
country, none of these facts would bother me. I wouldn’t have bothered writing this letter.
I know this is a politically charged and emotional issue. My conclusions will not be easy for most readers to accept. Likewise, many of the things I am
writing about this month will challenge my subscribers to re-examine what they believe about their country. The facts about America today tell a painful
story about a country in a steep decline, beset by problems of its own making.
One last point, before we begin… I realize that this kind of macro-economic/political analysis is not, primarily, what you pay me for. You rightly expect me to provide you with investment opportunities – whether bull market, bear market, or total societal collapse. And that’s what I’ve done every month for more than 15 years.
But that’s not what I’ve done this month. You won’t find any investment ideas at all in these pages. This issue is unlike any other I have ever written.
I’m sure it will spark a wave of cancellations – costing me hundreds of thousands of dollars. I fear it will spark a tremendous amount of controversy. Many
people will surely accuse me of deliberately writing inflammatory things in order to stir the pot and gain attention. That’s not my intention. The truth is,
I’ve gone to great lengths throughout my career to protect my privacy.
I am speaking out now because I believe someone must. And I have the resources to do it. I am sharing these ideas with my subscribers because I know we have arrived at the moment of a long-brewing crisis.
Our political leaders, our business leaders, and our cultural leaders have made a series of catastrophic choices. The result has been a long decline in
America’s standard of living.
For decades, we have papered over these problems with massive amounts of borrowing. But now, our debts total close to 400% of GDP, and America is the world’s largest borrower (after being the world’s largest creditor only 40 years ago)… And the holes in our society can no longer be hidden…
We’ve reached the point where we will have to fix what lies at the heart of America’s decline… or be satisfied with a vastly lower standard of living in
the future.
How do I know? How do I statistically define the decline of America?
The broadest measure of national wealth is per-capita gross domestic product (GDP). Economists use this figure to judge standards of living around the world.
It shows the value of the country’s annual production divided by the number of its citizens. No, the production isn’t actually divided among all the
citizens, but this measure provides us with a fair benchmark to compare different economies around the world. Likewise, this measure shows the growth (or the decline) in wealth in societies across time.
So… is America growing richer or poorer based on per-capita GDP? Seems like a simple enough question, doesn’t it? Is our economy growing faster than our
population? Are we, as individuals, becoming more affluent? Or is the pie, measured on a per-person basis, growing smaller?
This is the most fundamental measure of the success or the failure of any political system or culture. Are the legal and social rules we live under aiding
our economic development or holding us back? What do the numbers say?
Unfortunately, it’s a harder question to answer than it should be. The problem is, we don’t have a sound currency with which to measure GDP through time.
Until 1971, the U.S. dollar was defined as a certain amount of gold. And the price of gold was fixed by international agreement. It didn’t actually begin to
trade freely until 1975. Therefore, the value of the U.S. dollar (and thus the value of U.S. production, which is measured in dollars) was manipulated higher
for many years.
Even today, our government’s nominal GDP figures are greatly influenced by inflation. The influence of inflation is particularly pernicious in GDP studies.
You see, inflation, which actually reduces our standard of living, drives up the amount of nominal GDP. So it creates the appearance of a wealthier
country… while the nation is actually getting poorer.”
“You see, I believe the decline of our country is primarily a decline of our culture.
We have lost our sense of honor, humility, and the dedication to personal responsibility that, for more than 200 years, made our country the greatest hope for mankind. I want to detail some of the factors that gave rise to the current entitlement society. We have become a country of people who believe their well-being is someone else’s responsibility.
I’ve labeled these problems: The Corruption of America.
These problems manifest themselves in different ways across institutions in all parts of our society. But at their root, they are simply facets of the same
stone. They are all part of the same essential problem.
The corruption of America isn’t happening in one part of our country… or in one type of institution. It is happening across the landscape of our society,
in almost every institution. It’s a kind of moral decay… a kind of greed… a kind of desperate grasp for power… And it’s destroying our nation.
The Ethos of ‘Getting Yours’
Americans know, in their bones, that something terrible is happening. Maybe you can’t articulate it. Maybe you don’t have the statistics to understand
exactly what’s going on. But my bet is, you think about it a lot.”
“Bloomberg news published an article based on confidential sources about how Henry Paulson, the former CEO of Goldman Sachs and the Republican U.S. Treasury secretary during the financial crisis, held a secret meeting with the top 20 hedge-fund managers in New York City in late July 2008. This was about two weeks after he testified to Congress that Fannie Mae and Freddie Mac were “well-capitalized.””
“This was the most outrageous example of graft and corruption I have ever seen. Certainly it involves more billions of dollars in misappropriated value than
any other similar story I can recall. These managers had the risk-free ability to make tens of billions of dollars, if not hundreds of billions, by using
derivatives to capitalize on what they knew was the imminent collapse of the world’s largest mortgage bank. Who picked up the tab? You know perfectly well.
It was you and me, the taxpayers.”
“What does that say about our country when even the most egregious kind of corruption – involving hundreds of billions of dollars – is simply ignored?
It seems like everyone in our country has lost his moral bearing, from the highest government officials and senior corporate leaders all the way down to
schoolteachers and local community leaders. The ethos of my fellow Americans seems to have changed from one of personal integrity and responsibility to
“getting yours” – the all-out attempt, by any means possible, to get the most amount of benefits with the least amount of work.”
“It is routinely alleged in national political debates that something is fundamentally unfair and un-American about the huge “wealth gap” between the poorest Americans and the wealthiest. Some politicians like to argue that the poor never have a real shot at the American dream, and as a nation, we owe them more and more of our resources to correct this injustice. Most important, it is alleged that only the government has the resources to correct this inequality.
This is a dangerous notion…
First, it promotes the idea of entitlement. Entitlement is a fairly new idea in the American political lexicon – perhaps because most of our nation’s wealth
is still fairly new. The American idea of entitlement argues that because you were born into a rich society, other people owe you something. The idea has
become pervasive in our culture. It underlies the basic assumptions behind the idea of a “wealth gap.” Implicit is the assumption that successful Americans
haven’t rightfully earned their wealth… that in one way or another, they’ve taken advantage of the society and have an obligation to give back most of what
they’ve “taken.”
As you’ll see, I believe the idea of entitlement lies at the root of many of our most serious cultural problems.
The more obvious problem is the idea that the government is responsible for fixing the “wealth gap.” But the government has proved wholly ineffective at
dealing with poverty in America. The data is nearly conclusive that government efforts are far more likely to be the cause of the wealth gap than the
solution.”
“It has now been almost 50 years since the start of the War on Poverty, President Lyndon Johnson’s program to radically increase domestic welfare spending.
These programs and their various spinoffs have been at the center of Democratic politics ever since. In fact, if you compare speeches about these programs from the mid-1960s until today, you will find the verbiage never changes. Obama is merely echoing the same calls for “social justice” that Robert Kennedy used in his ill-fated 1968 campaign for president.”
“And what do the Democrats do with this power? They push a form of American socialism. This political system features transfer payments, government jobs, and lucrative government contracts to voters in exchange for political support – and in many cases, outright bribes. They do all of these things under the cover
of “progressive” politics and “social justice.”
But if you brush away the veneer, what you find is a history of abuse of power, corruption, and outright bribery. Conyers himself was found guilty of several
minor ethical violations in 2006 – mainly of using his staff as personal servants, forcing them to babysit and chauffer his children. In 1992, he was one of
the most egregious abusers of the House Banking scandal. He wrote 273 bad checks and left his account overdrawn for nine months. But that’s all small-time
graft compared to how things really work in his office and in his district.
How do I know? Well… just ask yourself where Conyers’ wife sleeps today.
Monica Conyers, the wife of the second-longest tenured congressman in the United States, sleeps in a federal prison in West Virginia. She pled guilty to
bribery in June 2009. She is serving a 37-month sentence for accepting $60,000 in bribes as the president pro tempore of the Detroit City Council. And yet…
and yet… Conyers won re-election handily in 2010.”
“Government Employee Unions:
Organized Corruption
A big part of the answer lies in understanding the key mechanism in the Democratic Party’s funding system. (Don’t worry… so far, we’ve been talking about Democratic Party failures, but I’ll get to the Republicans next. The corruption of America is a bipartisan problem.)”
“A government union turns the public servant into the public’s master. It is a means of using the government’s own spending to organize control of that
government. And that is exactly what’s happened. The government, unlike private companies, isn’t limited by normal economics because the government controls the monopoly on force and has the power to levy taxes.”
“Our country’s core problems are not found in only one political party.
There is just as much corruption, if not more, on the Republican side of the aisle. It was, for example, as I pointed out earlier, a white, Republican-
appointed Treasury secretary (Henry Paulson) who tipped off 20 top hedge-fund managers about Fannie Mae and Freddie Mac’s imminent collapse after assuring the public that it wouldn’t happen.
For big business, the powerful role of government in our society is simply too valuable to ignore. And the amount of corruption it inspires is stunning. Few
politicians even bother trying to hide the fact that they’re bought and sold like furniture.
Take Newt Gingrich. The white, Republican former House speaker was paid $1.6 million for “consulting” by Fannie Mae and Freddie Mac during a period of time the two firms were under constant attack by Newt’s fellow Republicans. Were the attacks efforts to truly reform a major threat to our financial system… or were they merely shakedowns? All we know for certain is Fannie and Freddie collapsed, just as many Republicans warned they would. The Republican effort to reform the firms failed. Newt collected $1.6 million.
Fannie and Freddie could end up costing taxpayers as much as $500 billion. No, I’m not ignoring the colossal role the Democrats played in staffing Fannie and
Freddie, lobbying Congress for the companies, etc. I’m simply pointing out that, in Washington, everything and everyone seems to be for sale, on both sides
of the aisle.”
“Here’s a simple solution. Hold the senators and congressmen personally liable for any deficit, each year. We elected these people to be our leaders. We did
not elect them to spend us into bankruptcy. We did not elect them to feather their own nests with unlimited public spending. We did not elect them to buy
votes. The only way to stop what’s happening is to make them personally responsible for their actions. Either they will balance the budget or face personal
financial ruin.
Demanding personal accountability for fiduciary responsibilities would have an immediate and profound impact on our society. It would wipe out the
entitlement mentality that’s destroying our society – almost overnight.”
“I do agree that the nation will soon face a choice between heading down the path towards fascism… or turning back the power of government and restoring the limited Republic that was our birthright. I continue to believe Americans will choose personal liberty.
I believe they will choose more freedom rather than more totalitarian rule. I don’t believe Americans will tolerate martial law for long – even in the advent
of a real emergency, which I do believe will occur.”
“What gives me confidence for the future? Gun sales, for one thing. U.S. citizens legally own around 270 million firearms – about 88 guns per 100 citizens
(including children) today.
That’s a hard population to police without its consent. America is the No. 1 country in the world as ranked by the number of guns per-capita. That plays a
major factor in the kind of government you will see take root in America. Things might go too far in this country for a while… And I’d argue they’ve been
going the wrong way for too long. But the government can only take things so far before they’ll be faced with a very angry, well-armed opposition.
If the government attempts to take our guns… my opinion would change immediately. But that’s one right the Supreme Court has been strengthening recently.
It gives me hope that most people in America still understand that the right to bear arms has little to do with protecting ourselves from crime and
everything to do with protecting ourselves from government…”
Read more:
http://www.stansberryresearch.com/pub/reports/201112PSI_issue.html
Thank you, Porter Stansberry, for this well written and insightful article.
I urge you all to read the entire article and pass it along to your elected officials and those running for office.
Citizen WElls 
Austan Goolsbee Obama chief economic adviser leaving, Citizen Wells commenters on small business problems, Obama economic failures
Austan Goolsbee Obama chief economic adviser leaving, Citizen Wells commenters on small business problems, Obama economic failures
“the Times of the nineteenth of December had published the official forecasts of the output of various classes of consumption goods in the fourth quarter of 1983, which was also the sixth quarter of the Ninth Three-Year Plan. Today’s issue contained a statement of the actual output, from which it appeared that the forecasts were in every instance grossly wrong. Winston’s job was to rectify the original figures by making them agree with the later ones.”…George Orwell, “1984″
“Another liberal economic nut ‘quits’ his job to go back to teaching, because the economy isn’t better. This is nothing more than a manager firing his advisors because he made a horrible decision, based upon his beliefs and their recommendations. Sadly, it’s not like these ‘economic advisors’ get held accountable for poor decision making process and economic policies. No, they get to go back to their ‘teaching jobs’ so they can tell students how great they are and how it was all somebody else’s fault.”…commenter pete
“It’s easy to see why some businesses hire undocumented workers to avoid the tax burden. Or worse yet they just pick up stakes and move out of the country.
And now obamacare will tax us more? Our government’s over taxation and interference has caused small businesses to be reluctant to hire more employees. Under the Obama regime we’ll see businesses leaving the country droves. It is no wonder that our country’s economy is on a downward spiral”….commenter Jonah
Reported on Citizen Wells this morning.
“Most of the key economic indicators have worsened recently, the unemployment rate is back over 9 percent and there is increasing mention of the spectre of a depression.
From the Chicago Tribune June 6, 2011.
“Top Obama economic adviser, Austan Goolsbee, will quit to return to University of Chicago”
“Austan Goolsbee, President Barack Obama’s chief economic adviser, is leaving the administration and returning to the University of Chicago Booth School of Business to teach.
The announcement from the White House late Monday comes at a time when the U.S. unemployment rate is back above 9 percent, speculation is growing that the nation may be at risk of dipping back into a recession and amid intense political debate over whether to extend the nation’s debt ceiling,
Goolsbee began advising Obama before his election as president and has become the administration’s chief public spokesman on the economy. He has headed the White House Council of Economic Advisers for the past nine months. On ABC’s “This Week” program Sunday, Goolsbee emphasized that the administration had made progress on employment since the depths of the Great Recession and said “don’t make too much of any one jobs report.”
May’s unemployment rate, released last week, climbed to 9.1 percent. The stock market has been sliding recently on concerns about a slowing economy in the U.S. and globally.
Obama said in a statement, “Since I first ran for the U.S. Senate, Austan has been a close friend and one of my most trusted advisers. Over the past several years, he has helped steer our country out of the worst economic crisis since the Great Depression.”””
The following comments placed on that article are worthy of publishing:
Commenter pete:
CW,
Do you think that anyone has seen through the game. Another liberal economic nut ‘quits’ his job to go back to teaching, because the economy isn’t better. This is nothing more than a manager firing his advisors because he made a horrible decision, based upon his beliefs and their recommendations. Sadly, it’s not like these ‘economic advisors’ get held accountable for poor decision making process and economic policies. No, they get to go back to their ‘teaching jobs’ so they can tell students how great they are and how it was all somebody else’s fault.
From a small business perspective the problems are easy to see. Foremost, you have a bunch of idiots making the hiring of new employees and economic growth very risky. Obamacare, new regulations, unable to get loans and credit, inflation of goods costs, and bear marketplace all conspire to strike fear into employers. Second, customers are AFRAID. About 1/3 of americans see the Constitution (and rule of law) evaporating before their eyes for the first time in history, and they fear for the future. About 1/3 of Customers are oblivious to the politics, but have no jobs or real income and are underwater on their houses. About 1/3 are starting to believe that the government could default on SS and Medicare/Caid, as well as other entitlements which they are dependent upon. These factors lead to a loss of Consumer Confidence, and fewer and fewer exchanges, jobs, and tax revenue. By the way, even IF you succeed now, and make more than 250k in a year, create jobs, and help your local community, you will be saddled with 71% income tax next year. REALLY! 71%, you might as well make less and smell the roses, send some of your employees home.
What I’m trying to say, while out in the trenches of the small business world, is that Jimmy Carter II on Steroids, Barack Obama (or whatever his/her name is) is bad for small business. Small Business is the engine that runs the American Economy, and it hurting. The government bailouts…..none was targeted to growth of small business or small industry. The new regs and obamacare attack all industry , but are especially hard for small business to cope with because of limited resources.
Ronald Reagan understood america and small business contribution. His economics weren’t trickle down as much as they were designed to help the middle class businessman, the Job creator, to succeed. Obama economics are pumping trillions to the Bankers and the GM/GE of the world, which is truly a trickle down economics. Worse yet, that money just ends up overseas in the ‘global economy’ with job creation elsewhere.
Obama’s economics have struck at the heart of America by removing MIDDLE CLASS JOBS and therefore, the middle class. The liberals, whom pride themselves supposedly helping the poor and middle class, are hypocrites, as their policies actually make it worse for these people by depriving them of needed small business jobs and manufacturing. While people will start to get used to the ‘new economy’ of 8-12% unemployement, the government is going to run out of ‘other peoples money’ soon, and the other shoe is going to drop.
What I written above I believe with my very core, and since it is critical of Obama and his Fascist/Elitist policies, I suppose that makes me a racist. I have sensed an increase in attacks from the left wing nuts as the reality falls upon them that the ‘annointed one’ and his cronies are a lot of hot air and not of true real life tested ideas. Just like socialism I might add, lots of ‘utopia promised’ followed by lots of misery and failure.
Keyensian ecomomics doesn’t work when you don’t have a base of production and small business. Keyensian economics doesn’t work when the Government is not a moderator, but becomes the unchecked new predator (competing for business resources) in a delicate system of customer and business. The ‘brilliant’ economists that have ‘quit’ the Obama economic team obviously not as smart as they thought they were….perhaps we should call Obama’s Economics the ‘Audacity of Arrogance with Ignorance implemented with Inexperience’.
Sorry, done ranting for the morning, I gotta go back to work to try to keep my employees with jobs and pay for other peoples mortages.
Pete”
Commenter Jonah:
“Pete,
Our family has owned a business for almost 40 years. I started paying the bills for the business about 7 years ago and I was alarmed to learn the cost to run a business.
OUR SMALL BUSINESSES PAYS:
FEDERAL INCOME TAX
STATE INCOME TAX
FEDERAL UNEMPLOYMENT TAX
STATE UNEMPLOYMENT TAX
7% SOCIAL SECURITY TAX FOR EMPLOYEES
(this is in addition to the 7% the employee gives the government)
PROPERTY TAX
PERSONAL PROPERTY TAX
UTILITY TAXES ON GAS, ELECTRIC, AND PHONE
GASOLINE TAX
SALES TAX TO THE STATE FOR EVERYTHING WE SELL
APROXIMATELY 7% SALES TAX ON EVERYTHING WE BUY
PLUS WE PAY
MEDICAL INSURANCE
AUTO INSURANCE
PROPERTY INSURANCE
LIABILITY INSURANCE
WORKMAN’S COMP
VARIOUS LICENSES AND PERMITS
I’m sure I’ve forgotten a few things.
THE GOVERNMENT GETS MORE OF OUR MONEY THAN WE DO!
It’s easy to see why some businesses hire undocumented workers to avoid the tax burden. Or worse yet they just pick up stakes and move out of the country.
And now obamacare will tax us more? Our government’s over taxation and interference has caused small businesses to be reluctant to hire more employees. Under the Obama regime we’ll see businesses leaving the country droves. It is no wonder that our country’s economy is on a downward spiral.”
42 Comments
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Tagged Austan Goolsbee Obama chief economic adviser leaving, Citizen Wells commenters on small business problems, Obama economic failures