Marx Madness


Dear Reader,

Having just returned from a whirlwind trip of Europe, and heading out almost immediately for ten days hopping around Argentina and Paraguay, I suspect today's missive is going to be fast and furious. My apologies in advance for any improperly turned phrases or bon mots that are less than bon.

As I continue to hear from dear readers that they rather enjoy the musical accompaniments, today I thought I would share a longer piece forwarded to me by a new colleague here at Casey Research. It's the full set of Pink Floyd's reunion show at Live 8 in 2005. While the spring of youth has long ago left their steps, they do a pretty amazing job at rocking the house.

Burn the Boats, Kill the Chickens

Although I did manage to squeeze in a few hours in the Portuguese sun chasing a little white ball, the purpose of my just-concluded whirlwind trip – a Sunday-to-Sunday jaunt with stay-overs in four different countries, including two of the PIIGS, Ireland and Portugal, and pending PIIGS member France twice – was mostly business.

As you might expect at this pivotal point in European history, I wasted no opportunity in questioning the locals – from widely followed economists to taxi drivers and everyone in between – about their views on the European Union and the common currency that serves as the glue holding it together, albeit barely.

Now, I am not going to go on at great length on the policy experiments that have brought Europe to its knees, and certainly won't weigh in with a tourist's opinion on how the whole mess will resolve: there are hundreds of media darlings in the wings, clearing their pipes in the hope of being called upon to opine this way or another on just those topics.

Rather, what I would like to do is encapsulate, in as few words as I am capable, the essence of the problems facing Europe, and leave it to you to draw your own conclusions. To assist in that regard, I will use my observations on the ground in Portugal.

For those of you who are unfamiliar with the place, physically and meteorologically, Portugal is about as good as it gets.

The weather is almost identical to Southern California, and the country has a long coastline complete with stunning (and largely empty) beaches. As with Southern California, the land is rich and supports the growing of pretty much any crop.

The people are friendly and well educated, with most speaking three or even four languages (Portuguese, English, German, Spanish are fairly standard). The food is fantastic, especially the fresh seafood, prepared to perfection even when just cooked over coals in a fisherman's shack.

Supplementing the local culture is a robust expat community: in the Algarve, where I stayed, most expats are refugees from the rest of Europe, with what seems to be an extra measure of Brits. Crime is low and, thanks to the crisis, there are bargains aplenty for houses and recently constructed (but now largely empty) apartment buildings, even near the water.

The storied cities of the Old World, Paris, Dublin, Madrid, Rome, Zurich, London are only a short hop by plane, and thanks to the hard-charging Michael O'Leary and his cut-rate Ryan Air, a cheap hop at that.

Which had me wondering, what's the problem? The same thought had come to mind while wandering about the bustling streets of Dublin a couple of days earlier.

You see, and I kid you not, every Portuguese, save one, I spoke to during my three-day visit was profoundly pessimistic, resigned to a new reality of the lack of tourists, empty hotels, failed real estate developments, the crash of the construction industry and the dearth of bank financing to fund anything. Every person I met under the age of 30 was looking to get out of the country.

Over a lunch with friends, including a recent graduate with a Master's in the computer sciences, I was told that even senior government officials are urging young people to emigrate, as there is no future in the country. Thanks to the miracle of the Internet, I did a bit of poking around, and sure enough – I was correctly informed. This from a February 2012 edition of USA Today

"Recent graduates should lead a new type of emigration, different from the 1960s, when Europe was the destination," Minister for Parliamentary Affairs Miguel Relvas said recently. "In the past 20 years, Portugal has invested in a generation of people, and now we can't give them what they need: employment."

As I will expand on momentarily, the conversation was almost identical in Ireland as, I suspect, it would be in Greece, Spain and across most of Europe.

So what was the number of the truck that ran over the aspirations of an entire generation? That laid low the economies of a dozen or more countries across the continent?

I'll give you a hint by relating that as a condition for inclusion in the Eurozone, functionaries in the European Commission based in Brussels required the Portuguese to retire and destroy a large percentage of their fishing fleet. As I understand it, the commissioners felt that the size of the Portuguese fleet coupled with the sea-faring nation's long history in commercial fishing gave it an unfair advantage over other nations in the Eurozone. They also helped rationalize the demand to burn the boats by saying that the Portuguese fishermen were putting the ecosystem of the Atlantic Ocean at risk.

The result of forcing the Portuguese to burn these tools for capital creation is that since joining the Eurozone in 1986, Portugal's fish harvest has effectively been cut in half. I was told that the country is reduced to buying many of the sardines that find favor in the local cuisine from the Spanish fleet.

The Euro-meddling doesn't stop with fish. The Portuguese are mandated to trash a large amount of their annual orange production lest they exceed the quotas set in Brussels. Apparently the Spanish, ever attuned to capitalize on Portugal's mandated misfortunes, buy the unsellable excess oranges and use them to make marmalade… which they then sell back to the Portuguese.

Of course, actions have consequences. One of them has been that Portugal has run a trade deficit for about twenty years now – in other words, starting soon after joining the EU in 1986.

And even though the country (and the continent) is tight in the grips of the most dire crisis in living memory, the EU commissars are still at it. In fact, as I write, Portugal is being forced by the European Commission to kill a large percentage of its chicken population, with the slaughter to be completed over the next month. This by virtue of the ironically named EU Welfare of Laying Hens Directive, forbidding the continued use of conventional egg-laying cages.

Once the chickens are destroyed, and provided the Portuguese egg farmers can ever find the capital needed to rebuild, they will have to build to the specifications of the EC Directive that requires that all laying hens must be kept in "enriched cages" providing each hen with at least 0.8 square feet of cage area, a nest-box, litter, perches and claw-shortening devices, allowing the hens to satisfy their biological and behavioral needs.

Now, I like chickens as much as the next guy, especially lightly grilled with a pinch of paprika and a dash of sea salt, and am firmly against the human tendency to mistreat animals (except when it comes to eating them, of course), but for the EC to foist this sort of perfect-world mandate on the Portuguese at this delicate point in time seems sheer madness.

One Portuguese taxi driver said sourly that the economically stifling EU policies would not stop until they finished killing off the Portuguese people through starvation.

He could be right. If the latest iteration of the EU Common Agricultural Policy is pushed forward, it will tie payments to farmers to environmental targets. Those targets include requiring the farmers to reserve at least 7 percent of their land for ecological purposes. In other words, if the farmers don't decrease their output of food by 7%, they won't be able to sell the food they produce on the other 93% of their land.

Given that they are already having trouble selling what they grow, due to the quotas and the fact that the euro makes their output uncompetitive, there is real concern about the viability of the Portuguese farm sector. Remember, we're talking about a growing environment as temperate and fertile as Southern California.

It was around this point in my wanderings that the proverbial scales dropped from my eyes and I came to something of a revelation.

Europe has been quietly taken over by communists.

And I'm not saying that for dramatic effect, but because the facts are evident. Succinctly put, operating from headquarters in Belgium, upwards of 30,000 bureaucratic functionaries working for the European Commission, and sub-commissions such as the Education Commission and the Competition Commission, are concocting an endless stream of perfect-world regulations whose net intent is to manage the economies of all EU members.

And, for good measure, all functions of civil society.

No matter how they spin their actions as the spawn of lofty goals and high principles, even a cursory glance reveals that the EU is now operating as a command economy – one where the productive capacity of commercial enterprises, fishing and farming being just one small corner, is being directed by central planners.

Communists.

And we think the United States has problems? Here we have only one bloated tick draining the lifeblood from the economy – albeit a really big bloated tick – but in Europe, they have two: the governments of the individual nations, and on top of that, the Bolsheviks in Brussels.

In Ireland, the situation is much the same. With prices driven sky high by the euro, Ireland's tourist trade has been reduced to a trickle. Just as was the case in Portugal, the Germans, who have been about the only nation to have benefited from the Eurozone, make up a large percentage of the reduced tourist traffic.

This meme, that the Eurozone was an inside job by the Germans aided by the unwitting French, is growing among Europe's population and is being discussed openly by a number of analysts. This from George Friedman of the well-respected Stratfor.

There are two narratives to the story. One is the German version, which has become the common explanation. It holds that Greece wound up in a sovereign debt crisis because of the irresponsibility of the Greek government in maintaining social welfare programs in excess of what it could fund, and now the Greeks were expecting others, particularly the Germans, to bail them out.

The Greek narrative, which is less noted, was that the Germans rigged the European Union in their favor. Germany is the world's third-largest exporter, after China and the United States (and closing rapidly on the No. 2 spot). By forming a free trade zone, the Germans created captive markets for their goods. During the prosperity of the first 20 years or so, this was hidden beneath general growth.

But once a crisis hit, the inability of Greece to devalue its money — which, as the euro, was controlled by the European Central Bank — and the ability of Germany to continue exporting without any ability of Greece to control those exports exacerbated Greece's recession, leading to a sovereign debt crisis. Moreover, the regulations generated by Brussels so enhanced the German position that Greece was helpless.

(Read the full article here. )

Of course, the Germans weren't the only ones that benefited from the Eurozone. Widely followed Irish economist David McWilliams explained over a pint in Dublin that the older folks did very well, thanks to the giveaways spread around by the central planners in Belgium in the early days of the EU.

As proof, he told us to look around the fairly pricey restaurant we were eating in. Sure enough, there was no one under the age of 60 in evidence. As for the young, they missed the parade.

In the view of McWilliams, one of the consequences of the cascading failures of the European economy will be a wave of bank runs on the continent, beginning in the not-too-distant future.

"Are you worried about a bank run?" I asked the young taxi driver on the way back to the hotel following dinner.

 "Oy, that's a good one, that is," he answered with a laugh. "I guess you'd have to have some money in the bank to worry about that, now wouldn't you?"

He went on to explain that he and all of his mates were clinging on to their existence by their fingernails... that is, those mates of his who hadn't already pulled up stakes and headed for distant shores.

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Yellow Card!

Over the course of the aforementioned lunch, a Portuguese friend, brimming with the optimism of a self-made man (encouraged by a glass or two of an excellent rosé) enthusiastically exclaimed that the solution to his country's seemingly insurmountable problems could be achieved by improving the local education system.

To which I responded, "You may be correct, but that takes a generation, and at this point you only have months." He conceded the point.

Nowhere are the shortcomings of the educational system, worldwide, more apparent than in the matter of economics.

"The foreign investors are ruining our countries by forcing interest rates higher," said a Portuguese car service driver with remarkable fervor considering his words were spoken at 3:30 am – the ungodly hour I had to head to the airport in order to catch my flight from Faro to Lisbon. "The government should limit how much interest rate the investors can get!"

Having to choose between trying to nap on the one-hour ride, looking out the window at the street lamps whisking by at breakneck speed, or engaging in a conversation with the rather passionate driver (evidenced by a waving about of his right hand, and sometimes his left as well), I chose the latter.

"Well, actually, that is largely out of the control of the government. Of course, they could try to limit the interest rate to whatever they want, but if investors don't feel the yield is worth the risk – and these days, there's a lot of risk, they'll just sit on their wallets," I said, hoping against hope his hands would stay on the wheel around the fast-approaching bend.

"And, besides, haven't you had enough of the government meddling in your life? Shouldn't a market for, say, oranges be only between the buyer and the seller? Shouldn't a fisherman be free to fish and a farmer free to sell their produce for the best price they can get?"

Rising one hand in preparation to respond, he let it drift back to the steering wheel and shook his head. "Yes, that's the way it should be."

Which made me wonder, maybe the entire educational system doesn't have to be retooled, just the module about how economies work best.

After all, if the populations of all these many countries were as well versed on the immutable laws of economics as they are on the rules of soccer, then when a Hollande or Duarte or Obama took to the podium to propose the latest harebrained scheme to meddle in the free functioning of markets, they would be chased off the stage by the incredulous and rightfully indignant listeners.

Alfredo, did you hear what that fool said?

That the government should create currency units out of thin air and pretend it's good money? Where is that referee! Yellow card! Yellow card!"

Unfortunately, through intellectual sloth and government design, not one in a hundred people these days – no matter what geography confines their backsides – has the slightest idea of what makes an economy function properly. And so they are no better able to understand the nature of their current situation or the actual solutions than was a cave man witnessing his first volcano and turning to the sun for an answer.

It is thus that, as was the case with the primitive and their shamans, people look to their governments to shake the bones in the correct manner to solve what ails, versus take the only action that will be effective: let the markets alone do what they do best – punish the misallocation of capital so that new capital can flow in.

Unfortunately, the historical moment you and I share will be greatly impacted by the time lost in the futile petitioning of imaginary gods, the people prostrating themselves at the feet of Brussels and Washington or the other centers of political power in the vain hope the bureaucrats will wave their magical policy wand and make all that ails well again.

With each passing day, and each new order issuing forth from the central planners, the situation only grows worse. And while I would like to believe that the public at large will come to recognize that it is the central planners that are the problem, not the solution, the hard reality is that people have been so brainwashed at this point that they are going to demand far more government meddling, not less, in the months and years just ahead.

So, here's the thing – at least as I see it. And that thing is that the situation is actually hopeless, but in that hopelessness is where hope can be found.

You see, because everything is broken beyond repair, everything must change. And so it will.

Everything Changes

Possibly the most interesting thing about major periods of transition such as we will live through is that no one can predict what's coming next. Of course, there will be a handful of people who correctly anticipate the big shifts, simply due to basic odds – but for a number of obvious reasons, there can be no methodical process by which the future can be accurately divined.

Instead, the forecaster must work with written histories, personal experience – including exposure to the thoughts of others they respect – and the intuition that mixes all the inputs together and delivers a vision of the future that makes more sense to us than any of the alternatives.

Again, not science, so invariably it boils down to what will hopefully be informed opinion.

So how, in my opinion, do we transition from this point in history to whatever comes next? Will society act like Europe in 1914 and break free of the bonds of peaceful coexistence in order to tear at each other's throats in actual war, versus the proxy of war found in every European soccer match?

Or will the transition happen through localized explosions of discontent?

"We will have a civil war," said my Portuguese driver when I asked him why the populace wasn't more energetic in its protestations about the EU's ruining of their economy. "Or maybe it's another dictator, or a civil war and then a dictator."

Driving across the landscape of Portugal, which like pretty much everywhere else in the world is dominated by wide open spaces and sparse populations gathered together in villages, towns and cities that barely make a dent on the environment we are all urged by the central planners to worry about, the thought struck me how difficult it is to conquer a country. Specifically, to cross every hedgerow with sufficient firepower to vanquish the bold on the other side, then bully the timid into remaining that way.

Yet, we humans have shown a remarkable ability to achieve what tasks we set our minds to, and so Europe in particular has been swept from one end to the other by invading armies over the centuries.

That said, in the current chapter, I don't anticipate an actual shooting war between nations (but the thought nags that maybe no generation ever does). Even so, other than a few outposts of despotism, based on my observations people show little passion for what might be termed the military life.

While the US stands almost alone in its aggressive foreign policy, I don't think the average Joe or Jill views the military in the same positive light as previously. That is a fairly new phenomenon: Even as recently as the Vietnam War, there was still a societal memory of WWII and WWI before it. We still named our parks after generals, and as children we remembered the Alamo.

Today, those memories are ancient history and people are otherwise intellectually engaged, primarily awaiting news of the next iPad application to entertain and inform them.

Sure, the Greeks and Portuguese may be upset at the Germans (and most are), because they think the Germans pulled a fast one with the Eurozone, but marshaling an army to show the Bosch bastards a thing or two? Hardly.

Internal dissent? Absolutely.

I think as with the Arab Spring, we are highly likely to see riots and popular uprisings increase in both frequency and intensity. Even so, because of the economic ignorance of the populace and the scale of the problems, even if the old guard are replaced, the new guard will likely be even more ill-informed and more socialist than they are now.

Alas, when it comes to economics, there really aren't any fresh ideas. Sorry, but no new and more effective way of central planning remains to be discovered. Yet the population will again demand that the experiment in redistribution is conducted again and again, even though the result is inevitably the same – the result that Europe and most of the modern world are now suffering from.

At its heart, this unbreakable love of the idea of socialism revolves around the entirely human fiction that the government can take from those who have and give to those who don't, thereby leveling the playing field and allowing those who are so inclined to earn more while doing less.

Of course, when pressed on how this bit of legerdemain can be accomplished, the only honest answer is, if the government allows some of the population to directly benefit from the labor of others.

To see where this sort of thing can lead when taken to the extreme, look no further than Cambodia circa 1970, a country that went all in for communism as the path to a perfect world. Unfortunately, in no time at all anyone considered "rich" and not fleet-footed enough to get across the political border was either financially ruined or killed... actually, most were financially ruined and then killed.

Margaret Thatcher put it succinctly, "The problem with socialism is that sooner or later you run out of other's people money."

As I drift – oh how I drift – I will put an oar into the current to try and steer back into the main stream of today's missive by quickly recapping to this point before throwing out my top "never-saw-it-coming" idea for how the transition to what's next will come about.

Summing up, the educational system, media and politicians have conspired to instill in the public mind an intransigent set of unworkable ideas about how economies work (e.g., that government meddling alone can foster economic growth).

These ideas are so deeply rooted at this point that the path forward is going to keep worsening until the world goes through a profoundly cathartic transition… as profound and cathartic as the atomic bombs going off in Japan at the end of World War II. While devastating in every sense of the word, if there was a positive, it would be that the explosion burned away Japan's militaristic death-cult government down to the last root, leaving the gentler and more entrepreneurial aspects of the Japanese culture to blossom. (Of course, there is a lot more to the post-war experience in Japan, but time dictates brevity.)

So, what agent or cluster of agents carry such world-changing potential?

In my view, technology.

The New War

While technology will continue to provide serious improvements in the quality of human life, a topic I have touched on in previous editions, in my view the odds are growing that the seminal event that brings a close to the era of dominating sovereigns will be brought about by a war that does not involve troop carriers rumbling across the countryside but rather the deliberate or even accidental unleashing of a powerful computer virus in the virtual world.

Unfortunately, the creation of a virus that targets critical computer infrastructure is well within the range of current capabilities. And while the Internet is remarkably resilient, what humans truly set their minds to is almost always achieved. The French manning the Maginot line and the heads of Iran's nuclear program both thought their defenses were impenetrable, before they found out they were not.

In the case of the Iranians, despite having sealed off all the computers in their primary nuclear-development lab from the outside world – no cables or wireless connections extended outside of the inner sanctum – with careful planning, killer programming and a little patience, the US and Israel were still able to inject the Stuxnet virus that destroyed them.

Today, unfortunately, a derivation of the Stuxnet virus – the Flame – is beginning to show up in the world wide web. While there has been some news and a bit of Twitter traffic about it, so far the reaction among the masses has been tepid at best. Yet, according to computer security experts Symantec, the virus is built to allow the operators to wipe out computers.

Symantec researcher Vikram Thakur said on Thursday that the company has now identified a component of Flame that allows operators to delete files from computers.

"These guys have the capability to delete everything on the computer," Thakur said. "This is not something that is theoretical. It is absolutely there."

To be clear, I am not saying the Flame will herald in what's coming next. What I am saying is that it, or whatever soon follows, certainly could.

In fact, I am completely sure that something even more powerful, even more insidious will follow, because the people who live in the dark world of cyberwar will now view the success of Stuxnet in Iran in much the same light that Oppenheimer et al. viewed the explosion of the first atomic bomb in 1945, setting the stage for a redoubling of efforts that brought us nuclear bombs strapped to intercontinental ballistic missiles.

Unlike nuclear bombs, in the case of a computer virus, the world's richest nations are not the only ones that can play. In fact, I would bet everything I have that there are a thousand highly intelligent but morally ambivalent hackers sitting at their desks at this very moment trying to come up with their own, but better, version of Stuxnet.

So, how's this for a transformative event.

You get up one cold winter morning and there's no electricity. If you could log on to the Internet, watch television or listen to the radio, which you can't – you'd learn that the primary operating systems of a major power transition hub have been infiltrated and destroyed, along with the back-up systems.

As the grid begins to overload, a second hub goes down, then another.

Note that I am not talking about "the Internet" here – but a proprietary system that connects to the Internet in too many ways to count. And, as the Stuxnet attack proved, even if the system is an entirely closed loop, it can still be attacked.

While your first thoughts on discovering you had no electricity and that nothing requiring electricity worked would likely be frustration at not being able to instantly access the information as to why the electricity was off… within a pretty short period of time, your thoughts would turn to other matters. Such as heat, or being able to get access to fuel for your car, or the lack of food or water.

If I remember correctly, the modern "just-in-time" delivery model means that New York City has only about enough food on the shelves to last the population a day… and once people realized what was going on, it wouldn't even last that long. Even worse, a human being can't go for much more than three days without water – versus several weeks without food – and without power, there's no readily available water supply.

Now, I don't want to get all dystopian on you, and I have gone on far too long anyway, so I will head toward a conclusion.

The scenario just above seems extreme, and may be. But the entire point of this exercise is to urge you to give at least a little thought to what might lead to the sort of societal transformation I believe we'll have to go through in order to expunge the crippling dependence of people on governments that has arisen over the last 100 years. Only when people once again learn in no uncertain terms that ultimately they have to rely on themselves to better their life – working with their neighbors and others they want to associate with freely – can the world transcend the current morass.

Give a little thought to your Plan B.

For those of you who live in Europe, may I suggest you start calling the EU and the EC by the correct term, Commissars.


Friday Funnies

Dining out with a small group of British expats on the Algarve reminded me how much I enjoy the British sense of humor. The following from John Cleese, of Monty Python fame, is a classic example of the genre. In addition to being funny, it is also telling, because as much as people like to pretend the countries in Europe are capable of coming together in a collaborative union, the attitudinal artifacts from being at each other's throats for lo these many millennia are still very much present, both in things like international sporting contests and in the humor…

The English are feeling the pinch in relation to recent events in the Middle East and have therefore raised their security level from "Miffed" to "Peeved."

Soon, though, security levels may be raised yet again to "Irritated" or even "A Bit Cross." The English have not been "A Bit Cross" since the blitz in 1940 when tea supplies nearly ran out. Terrorists have been re-categorized from "Tiresome" to "A Bloody Nuisance." The last time the British issued a "Bloody Nuisance" warning level was in 1588, when threatened by the Spanish Armada.

The Scots have raised their threat level from "Pissed Off" to "Let's get the Bastards." They don't have any other levels. This is the reason they have been used on the front line of the British army for the last 300 years. 

The French government announced yesterday that it has raised its terror alert level from "Run" to "Hide." The only two higher levels in France are "Collaborate" and "Surrender." The rise was precipitated by a recent fire that destroyed France's white flag factory, effectively paralyzing the country's military capability. 

Italy has increased the alert level from "Shout Loudly and Excitedly" to "Elaborate Military Posturing." Two more levels remain: "Ineffective Combat Operations" and "Change Sides." 

The Germans have increased their alert state from "Disdainful Arrogance" to "Dress in Uniform and Sing Marching Songs." They also have two higher levels: "Invade a Neighbor" and "Lose." 

Belgians, on the other hand, are all on holiday as usual; the only threat they are worried about is NATO pulling out of Brussels. 

The Spanish are all excited to see their new submarines ready to deploy. These beautifully designed subs have glass bottoms so the new Spanish navy can get a really good look at the old Spanish navy. 

Australia, meanwhile, has raised its security level from "No worries" to "She'll be alright, Mate." Two more escalation levels remain: "Crikey! I think we'll need to cancel the barbie this weekend!" and "The barbie is cancelled." So far no situation has ever warranted use of the last final escalation level.

A final thought – "Greece is collapsing, the Iranians are getting aggressive, and Rome is in disarray. Welcome back to 480 BC"...


The Land of the Scared?

I began my European trip by driving to Montreal, then flying out of there. The difference in airport security when you travel anywhere not including the US is unmistakable. Yes, you have to show passports and put things into plastic trays to go through X-ray machines, then stop through metal detectors – but there's none of the gruff attitudes or taking off shoes. In other words, the process is entirely rational.

And on arriving at our first stop, Paris, I was amazed how relaxed things were. The immigration agent asked no intrusive questions, in fact said nothing but hello as he glanced at my passport, found a blank spot and stamped it. There was no one in customs, so it was grab the bags and straight out the door.

The experience was much the same throughout Europe. Nothing but smiles and the same sort of reasonable security check.

Which is maybe why the experience I had almost immediately upon returning to the States was so remarkable. It started when I was exiting Paris on my return trip, and the border agent pointed out that all of the pages of my passport were now entirely covered in stamps, and so I would need to have pages added.

Thus, after landing back in the States and driving across the US border (where the traffic was backed up for half an hour), I headed to the passport office in St. Albans, Vermont.

The office is located there because St. Albans is the nearest town to the border with Canada. It is a not a big town and doesn't have very many amenities – which is what you would expect in rural Vermont.

I had managed to secure an appointment by phone on return to North America, and even though I was tired from my just-completed trip, I headed to the appointment prior to finishing the drive home.

Locating the office in a small brick building on Main Street, I walked in and to my deep surprise was met by three fully uniformed, fully armed TSA officers manning a standard-issue security screening station complete with X-ray machine and a metal detector.

Half-hidden behind a desk at the front of the screening station, all of which had had to be squeezed into a narrow hallway in the small building, was a fairly young ex-soldier type, his arms decorated with the oh-so-cliché tattoos of oriental symbols.

"Welcome to the passport office," he said in a growl without looking up at me. "Your identification, please. Do you have any guns, knives or explosives on you?"

I assured him I did not, but apparently he didn't believe me because I was told to empty my pockets and take off my belt and drop them into the plastic bin on the X-ray machine conveyor belt manned by one of his colleagues, before proceeding through the metal detector manned by the third.

Retrieving my belongings while stifling a laugh at the absurd comedy of the whole thing, I proceeded into the inner sanctum of the passport office, a small and unremarkable place on a scale with the waiting room of a one-room dental practice.

There I discovered that the waiting room was partitioned off from the workers by a floor-to-ceiling security barrier, complete with bullet-proof glass and a speaker you had to use to communicate with the clerk on the other side.

So, essentially you have a full-blown security detail and equipment installed and operated at the cost of what surely must run over $200,000 a year to protect a couple of clerks who are hidden behind a hardened security barrier.

What the hell could these people be so afraid of? And as this is just an extension of the sort of over-the-top nonsense that is repeated at every airport, every border, every government installation and, increasingly, train stations and public gatherings, I have to also ask: What are we as a people so afraid of? What has happened to our country, the purported land of the brave?

I could go on about this whole scenario at some length, but the day is growing late, and there is still much to be done before wheels up on my next trip, so I won't.

Instead, I will sign off for the day by leaving you with a nice sentiment that I think might help keep things in the proper perspective during the challenging times still ahead. They are words attributed to the Dalai Lama, sent to me by a friend in Nepal.

When asked what surprised him most about humanity, the Dalai Lama answered…

"Man. Because he sacrifices his health in order to make money. Then he sacrifices money to recuperate his health. And then he is so anxious about the future that he does not enjoy the present; the result being that he does not live in the present or the future; he lives as if he is never going to die, and then he dies having never really lived."

And with that, I will sign off for the day by thanking you for reading and for being a subscriber to a Casey Research service. Together, we'll get through whatever comes next just fine.

Until next time…

David Galland
Managing Director
Casey Research

Jun 22, 2012