White Man's Burden

White Man's Burden: Rainbow Warriors: The Chosin People
by Bill Bonner
The Daily Reckoning
London, England
Friday, October 7, 2005

Bill Bonner reviews a Thomas Friedman essay about time Friedman spent on a US Warship and finds its urging of the US to shoulder the White Man's Burden patronizing.

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Most days are like the days that preceded them: There is nothing surprising about them.

Often, the late summer days drift onward - like the changing of the seasons - with such slight variations one day to the next that you hardly notice. But then, a couple of months later, you suddenly need to put on your winter coat.

We don’t know yet if that is the drift of the seasons in the stock market - from warm to cold. It is too soon to tell. “Economic worries weigh on Wall Street,” says the International Herald Tribune. The article tells us that there was no recovery for the Dow yesterday.

Meanwhile, the Financial Times puts the world economic situation into dreary perspective:

“The world economy is growing quickly but is rapidly becoming more imbalanced,” says the FT. We would have used the word “unbalanced” in the way that, say, the Mad Gasser of Mattoon was unbalanced...or a man who thinks he is Napoleon Bonaparte is unbalanced.

“Foreigners are building up stocks of U.S. assets, keeping U.S. interest rates low and supporting the U.S. dollar,” the narrative continues, “but their willingness to continue financing U.S. consumers’ taste for imported goods at low interest rates cannot last forever.”

So far, so good...this has been The Daily Reckoning view of things for several years. But the FT fails to quit while it is ahead:

“Economists and policymakers know the greatest challenge for the world economy is to reduce these financial imbalances, without killing the prospects for continued healthy world economic growth.”

Here, we have to pause to draw breath.

We have made a new friend, Lila, who is helping us to understand things like this. It is all based on a huge and unnatural pretension; we think she is trying to tell us that policymakers understand and control the global economy; that carefully considered action produces anticipated reaction; and that the entire world can be modeled, manipulated, and browbeaten.

Of course, the FT’s statement makes no sense. How could current “growth” be “healthy” if it produces a more unbalanced world? It is as if a crazy man were taking medicine that, according to his doctors, worked very well, except for the fact that it made him crazier. But neither policymakers, nor FT economists, can imagine a world in which there is no lever they can pull, no knob they can turn, no reason they can exercise...to produce the desired outcome.

The imbalance to which the FT refers is the increasing division between one group of people who spend money they don’t have, and another group that sells things to them. As “growth” continues, the first group goes further and further into debt (becoming poorer) and the second group builds more and more capacity, so that it can make more things the first group cannot afford to pay for. Both groups are making old-fashioned mistakes (one spending too much...the other producing too much) that can only be corrected in an old-fashioned way: With regrets, recriminations and restructuring.

There are no magic levers...no miracle knobs. Instead, there is only a footnote in the Policymakers’ Manual: “Warning, despite your conceits and delusions, you usually get what you’ve got coming.”

More news, from our team at The Rude Awakening...

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Dan Denning, reporting from Colorado:

"You'd never guess this particular corner of the Great American Desert may play an integral role in America's strategic future."

For the rest of this story, and for more market insights, see today’s issue of

The Rude Awakening

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Bill Bonner, back in London with more opinions on various subjects...

*** Our resident micro-cap analyst, Carl “The GRIPPER” Waynberg sent us some great news this morning.

“Manhattan Pharmaceuticals (formerly MHTT.OB) begins trading on the Amex today under the ticker symbol MHA, becoming the third GRIP idea in three months to graduate to a major exchange.”

We’re not surprised by this news, dear reader.

Carl makes a living recommending tiny OTC BB and pink sheets stocks - like Manhattan Pharmaceuticals - that have the potential to “jump” or graduate to the major exchanges - like the AMEX, NYSE or NASDAQ. The idea is simple...

You invest in solid businesses while no one on Wall Street is paying attention (while a company trades on the hidden OTC BB and pick sheets exchanges). And you cash out when it graduates to a major, cash-rich exchange that everyone follows.

[Ed. Note: It’s a classic contrarian investment strategy. To learn more about Carl and his investment strategy, check out his latest report. He’s found five stocks that could graduate to a major exchange - soon. Plus, you can but at near “insider” prices.

Get On the Investing A-List

*** America’s democracy has been gently remodeled to suit the needs of empire. So, has American capitalism grown old, collectivized and degenerate? Who makes money in America today? The people who actually make things? No, dear reader, it is the money manipulators: The lenders, the investment managers, and financial paper pushers.

Herewith is a list of some of the biggest earners and what they do, from the New Yorker, courtesy of Richard Russell:

Edward Lampert: $1.02 billion, Manager ESL Investments, hedge fund.

James Simons: $670 million, Manager, Renaissance Technology Corp, hedge fund

Bruce Kovner: $550 million, Manager, Caxton Asssociate, hedge fund.

Richard Fuld: $35 million, Chairman and CEO, Lehman Bros.

Henry Paulson, JR.: $32 million, Chairman and CEO, Goldman Sachs.

*** One other little note: George W. Bush told the nation yesterday that he was fighting an enemy determined to build a “totalitarian empire.” We marvel at the man. He is the leader of the world’s only true empire, with huge, sophisticate armies all over the world, dozens of deferential vassal states, and a war chest bigger than the entire rest of the world’s military spending.

Yet, he seems obsessed by the competition. It is like a fisherman who tells how he struggled all morning to pull out a huge swordfish, and all he has to show for it is a tiny minnow. The “totalitarian empire” exists only in the minds of G.W. Bush and O. B. Laden. For the moment it controls not a single nation, and has a military budget probably smaller than the cost of the Flagstaff, Arizona, police force.

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The Daily Reckoning PRESENTS: Thomas Friedman is at it again...it seems he has confused the American empire with a humble nation-state. Bill Bonner explains...

RAINBOW WARRIORS: THE CHOSIN PEOPLE
by Bill Bonner

“I never sleep well on warships,” begins the columnist’s epistle. From the very first line, we are thrown off stride. Our head tilts to the left; a look of curiosity comes over our face. What is New York Times opinion monger Thomas L. Friedman doing on a warship, we wonder?

We don’t know, but he is apparently a frequent guest of the U.S. fleet.

Friedman has become something of a celebrity. We don’t begrudge the fact. Still, we can’t think of anyone who holds himself up to ridicule the way Friedman does; unwittingly - the only way possible for Friedman - he has become a traveling minstrel, singing the praises of the great Anglo-Saxon Empire. He speaks to large groups. His books are best sellers. His column is wisely admired and widely distributed. His sugary views have become ubiquitous; they have done for American intellectual life what Krispy Kreme has done to its diet.

Writing from the USS Chosin, the imperial hallucinatory thinks he has discovered yet more evidence of the empire’s superiority:

“When the Iraqi Navy drops you off on the Chosin, a guided missile cruiser, two things just hit you in the face. One is the diversity of the U.S. Navy - blacks, whites, Hispanics, Christians, Jews, atheists, Muslims, all working together, bound by a shared idea, not by an iron fist.”

Not only is the U.S. Navy generous in offering bed and board to the N.Y. journalists, it apparently does so to a wide variety of humans, and all on the same condition: They agree to promote and protect the empire.

White Man's Burden: Sailors Designed by Benetton

Friedman finds this astonishingly virtuous; we are the Chosin people, he seems to say, because we have a fighting force designed by Lucian Benetton.

What the man is applauding, though, is not America, but the Anglo-Saxon empire. A multi-cultural fighting force is just one of the many charms of imperial rule. A humble nation-state can stay within its borders and leave its citizens alone to run their own lives. An empire is a comedy on a much larger scale; it absorbs other races, nations, and religious groups as it grows.

The Macedonians picked up allies and subject armies as they made their way from Greece to Egypt and India. By the time they fought the battle of Gaugamela, they had a rainbow army composed of many races and nationalities.

Likewise, the Romans soon found themselves with legions recruited from dozens of tribal groups in Italy itself, and then from all over the empire...Scythians, Slavs, Celts, Gauls, Germans, Persians, Armenians, and so forth.

The murderous Mongols gradually brought other groups into their armies and empire, too. By the time Kublai Khan died, there were hundreds of races, nations and peoples speaking different languages, with different customs, and very different backgrounds - people far more different from one another than those making up the U.S. Navy today. They were all unified under a single authority, with allegiance to a single idea: The Mongol Empire. As in Rome, some of them made their way to high positions in the Mongol imperial administration, even though they were not born Mongol themselves.

The British brought in soldiers from all over the empire to do their fighting for them. At first, they used recruits from the periphery of the British Isles - conquered Scots, Welsh, and Irish. British battles are full of glorious citations to the Welsh Guards, the Scottish Highlanders, and so forth. Later, troops were levied up from all over the empire - not just Englishmen from imperial outposts in Canada and Australia - but subject peoples in India and Egypt, such as the tough Gurkha troops used in Word War II.

Even Hitler allowed a rainbow army to carry his campaign into the Soviet Union, including large units from Italy and the Balkans.

White Man's Burden: Showing the Heathen How to Live

But America’s rainbow outdoes them all, says Friedman. It has brighter shades of pink!

“In trying to bring some democracy to Iraq,” the writer continues, “America is not just challenging the dictatorial-tribal political order here, but the male-dominated culture as well.”

For the Navy not only has men from all races and religions; it also has broken the taboo of thousands of years of fighting at sea. It has put women on its warships.

“The U.S. Coast Guard cutter Monomoy, alongside the Chosin, has a female executive officer, who often leads the landing parties that inspect boats in the Gulf; one of the U.S. Navy’s fast patrol boats, also alongside the Chosin, had a female captain.”

If only the Iraqis could be more like us, says the world improver. Now, we shoulder the white man’s burden - to show these heathen how to live!

We swoon at the thought of it. We are feeding so many good things to the Iraqis all at once: Democracy, diversity, feminism. It is no wonder the poor Iraqis choke.

Regards,

Bill Bonner
for The Daily Reckoning

Editor's Note: Bill Bonner is the founder and editor of The Daily Reckoning. He is also the author, with Addison Wiggin, of The Wall Street Journal best seller Financial Reckoning Day: Surviving the Soft Depression of the 21st Century (John Wiley & Sons).

To order your copy of Financial Reckoning Day at a discount, see The Daily Reckoning's bookstore:

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