That'll Be Enough
The Market Ticker - Commentary on The Capital Markets
2016-11-12 05:00 by Karl Denninger
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That'll Be Enough*
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Let me make a few observations.

First, eight years ago, and again four years ago, America elected a President.  Fully half, give or take a couple of percent, disagreed with the outcome.

There were exactly zero riots, fires, "mass protests" and similar following that outcome despite the fact that half the population vehemently disagreed with it.

This time around, not so much.

Now I want you think very carefully about the following.

Most of the land mass of this nation is owned and resided upon by people who are in "red" (that is, the winner this time) areas of the country.  With the exception of certain urban centers and right along the Mexican/Texas border there are very few "solid" blue areas.

Those urban centers consume roughly 90% of the energy and food in this country yet they comprise 5-10% of the land mass.  The "red" areas produce 95% of the food and energy this nation consumes and occupies 90-95% of the land mass.

Do you really think that doing something like eliminating the last pieces of the structure our founding fathers put in place to prevent tyranny of the majority from being able to take hold is a good idea?

A little history lesson: Prior to the 17th Amendment ratified in 1913 it was impossible for the Federal Government to shove any program down the throats of the 50 states.  That's because the state legislatures had effective control of the Senate and could recall their Senators.

The House was elected by the people, the Senate was elected by The State Legislatures (and could be recalled by same) and The President was elected by the Electors, which were voted for in the popular vote.

The latter provides a modest but real increase in the representation of "flyover" states; that is, those with lower population counts.  In other words it is a check and balance in the ultimate tyranny of democracy.

Yes, I said democracy is ultimately tyrannical -- because it is.

America is not a Democracy.  It is a Constitutional Republic.  This is very important; in a democracy 50%+1 can render the 50%-1 slaves by mere vote.  Those who are in the minority in a democracy have no rights at all.  Democracy is best represented by two wolves and a sheep voting on what's for dinner.

We are all minorities in some form or fashion.  If you're gay, black, yellow, male, female, whatever -- all it takes is some other set of groups to get together and decide to oppress you, and in a democracy you're ****ed.

America's founding fathers put in place two systems to prevent this.  The first was the bicameral legislature; a House elected by the people at large and a Senate elected by the State Legislators.  This structure guaranteed that a landmass that amassed 50%+1 of the population (not even in the same state or states!) could not band together and shove down the throat of the States any policy measure because you needed the concurrence of more than half the state legislatures, where each were delegated but two votes to their Senators who were accountable to said legislature, to pass anything at all.

This evaporated with the passage of the 17th Amendment.  Now you only needed 50%+1 of the people in a given state to pass anything you wanted and they could all live in a tiny percentage of the land mass -- such as is the case with Illinois where more than half the population lives in the immediate area of Chicago.

What came right after that?  Prohibition, shoved down the throat of the States, less than 7 years later!

What also came after it was an unbridled expansion of the Federal Government into state affairs.  Indeed, virtually everything became a "legitimate" federal matter.  Why?  Because it was impossible for the States to prevent it.

Do you think the founders were wrong to do what they did, and the 17th Amendment corrected that?

If you believe so then please consider this.

 

Ever drive through small town America?

Hell, how about "not-so-small-town" America?

Many of these towns look like something out of a WWI or WWII European war movie.  There was one factory or maybe two, but now it sits empty, weeds growing out of the parking lot as high as your head, all the windows are broken out and the roof has caved in.  Over on the outskirts there's a Walmart that pays $9/hour, but only offers 20 hours/week.  The factory paid $30/hour, full-time, plus benefits and food, power, medicine and beer cost half of what it does now. 90% of what formerly were little diners and shops in the "center" of the town, which might have one actual traffic light, are gone -- boarded up and often literally falling apart.  There might be one bank left, a branch of a big national chain, and maybe an antique store.  Maybe.  All the factory jobs left for China and Mexico and everything else died when the middle-class incomes to support them disappeared.  We did that as a nation with our "progressive" and "global" agenda driven by the 50%+1 that live in the closest big city 200 miles away.

The locals who used to work in the fields within 10 or 20 miles from that town are all unemployed too.  Why?  Because the illegal Mexicans came and we refused to throw them out.  They work for a few bucks a day in cash, no taxes, no unemployment, no nothing.  No American can live on that; the embedded cost of just trying to stay alive would leave you with zero.  But the Mexicans work hard and then sleep 10 to a single-room apartment, which incidentally is a total ****hole as you'd expect given that density of occupation.  They don't care; it's better than what they had in Mexico, you see, and they can Western Union home some of the money.  This is the face of "immigration", mostly illegal, that really exists in this country.  They brought their third-world ****hole here and while it's a little bit better than what they had in the process of doing it they dragged us into the gutter with them.

The people who lived in that town did and most who are still there do go to church every weekend, and some go again during the week, usually on Wednesday.  There's usually one, sometimes two churches.  Every one of them has the word "God" or "Christ" in the name on the front.  They mean it when it comes to their faith and in addition that's where all the local people shake hands, exchange chit-chat on the last week and, for younger people, it's where they meet one another.  You know, girls and boys.  Yeah.  Faith is real there, you see, and it's Christian. But from your point of view that's deplorable and that "those people" don't like the idea of making a wedding cake for a gay marriage is deserving of a federal lawsuit and loss of the bakery (which is, as a result, now closed -- putting yet more people out of work.)  The people who live in these towns don't see your point of view as a civil rights matter but rather as attacking God.

What was left after the factory was displaced isn't enough to run a "service economy", which is why it never showed up there and the old business buildings are all boarded up.  Nobody can afford $8 lattes on a $9/hour wage for 20 hours a week and nobody would want them if they could.  There's probably a McDonalds on the outskirts, and a couple of self-serve gas stations with a convenience store.  It sells cheap beer and lots of it to the locals who have nothing to do but drink and then go to church and pray for forgiveness for last night's 12 pack.  None of the jobs at any of these places, except maybe the store manager, makes more than $9/hour and Obamacare has forced all the regular workers down to 20 hours a week on top of it.  Try living on $180/week gross sometime -- before FICA and Medicare is taken out, never mind gas for the car and the rapidly-escalating car insurance bill -- and you might understand.  Yes, I know the car is 15 years old and runs like crap.  What do you expect on under $1,000/month of income?

This is what 40 years of sending jobs overseas with "trade deals" did.  It's what Amazon did.  It's what Walmart and its Chinese supply line did.  It's what "progressive America" did, and then to add insult to injury the teachers in the public schools tell all the kids that Mommy and Daddy are bad people and hate both the planet and their own kids because they don't drive a $30,000 Prius or a $60,000 Tesla.

This is everywhere in rural America.  Get in your car and out of your comfort zone some time and you'll see it. It's not far from wherever you are.  I've driven through dozens of these formerly-alive places in the last six months -- every one of them dead today, but full of real people.  I never met one such person that was a racist, xenophobic *******, but they're not very happy, and the people they're unhappy with are those very same folks you wanted to keep in office in Washington DC.

If you think the destruction of small town America is confined to farms you forget the other half -- energy.  Would you like your lights to work?  Many of those small towns are dead because of the insanity of our energy policy -- or lack thereof, tied to left-wing whackjob nonsense.

Now you want to add insult to injury when they show up to vote, exactly as civics tells them we have a right to do, and a large number of you in the cities did not show up.

They bought into the message of bringing American jobs back to America and ejecting those who have no right to be here.  You call them xenophobic, racist and small-minded -- they call it a shot at decent employment for the first time in 30 years.

They believe in the Henry Ford model of American business, and they're not wrong to do so.  Make the product here, pay the people well enough to be able to afford it, and you'll do just fine.

They win the election, in short, and you lose.

Then you decide to be a sore loser and loot, burn, beat people, issue threats, cry, whine on social media and try to obstruct everything by any means possible -- legal or not.  You bus people in to "protest" and riot, you "petition", you raise hell in short -- oh, and all this after you implored the other side to "respect the outcome of the election" and lambasted them for suggesting they might want to merely count the ballots twice!

Note again, as I pointed out above, that eight years ago, and four years ago, these very same people were on the losing end of your stick exactly as they had been for the previous three decades yet they did none of the above.  They understand duplicity and your double-standard quite well, seeing as they did the honorable thing and respected the outcome twice in a row despite getting screwed sequentially both times.  The only thing your brand of government offered them in the end was Medicaid or worthless "health insurance" through the exchange; the former has no doctors that accept it within 20 miles and the latter has a $5,000 deductible before it pays anything, which is utterly laughable when you consider these folks have a gross wage of under $1,000 a month.

Now the question:  Are you prepared for the possibility they might decide en-masse that they're done with this crap -- and with you?  That they're not going to take it any more?

What if the people who live in the "red" areas, that is, those who produce the food and energy that are consumed to the 90th percentile in the "blue" areas, decide they're not going to do that for the blue areas any more?  What if their middle finger goes up, in short?

Remember, we allegedly do not permit slavery in this country any more -- which means that which someone owns they have the right to sell - or not sell.  They have the right to produce - or, more to the point, not produce.

What if the people who peacefully conceded the result of two elections over the last eight years despite vehemently opposing the outcome decide that if the "blue" folks can riot, loot, beat people who vote the "wrong way" and similar they will not accept any further election result that doesn't go their way, and instead of rioting or burning things they will simply shut off the flow of food and energy to said "blue" areas?  After all, you don't value them at all -- you consider them subhuman, racist, xenophobic, deplorable and irredeemable -- all at once.

I'll tell you what happens if they take that decision: Every major city in the country would go feral within hours.

Within days those cities would not be blue, they'd be blackened and reduced to ash as those very same "protesters" you like so much loot, burn and shoot at each other trying to get the last scraps of food and fuel remaining.  They would then probably try to come out of the cities and take by force what had been denied them, only to run into a major problem - the "red guys" have more guns, they know the land because they live there, and more importantly they actually hit what they aim at, having had plenty of practice feeding their families with deer, wild boar and similar.  Mr. Gang Banger against Mr. Deer Hunter isn't a very fair fight, when you get down to it.

Oh by the way there's a phrase for what this would mean, if you haven't figured it out by now: Civil War.

Is that what you want?

It's where your actions are headed, if you keep doing what you're doing -- and nobody knows exactly where the tipping point is.

Better think long and hard, those of you in the "blue" places who are running this crap.  You do not have a snowball's chance in Hell of being able to grow enough in the way of crops on the landmass you control to feed a tenth of your population and every squirrel in your trees would be shot dead and eaten within an hour after this began.  Silent spring indeed.  Never mind the fact that most of you "wonderful snowflakes" couldn't shoot, skin, butcher and cook a deer -- or even a squirrel -- if you had to.  Never mind that a good 80% of you couldn't manage to run one mile if you were being chased by someone interested in eating you.

The day that cellophane-wrapped chicken stops showing up in the grocery store is literally the day 90% of Blue America starves.

Nobody in their right mind wants such an outcome.  But where do you think this all goes if you keep it up, eh?

Every bit of it has been enabled by the 17th Amendment and tyranny of the majority -- a tyranny you wish to increase by doing things such as abolishing the Electoral College.

There's a very good reason our founding fathers designed a Constitutional Republic instead of a Democracy.  They understand the problem with democracy: It doesn't work.  Democracy always ends up leading to riots and civil war, because exactly what the blue folks are doing now escalates until everyone starts shooting everyone.

A Constitutional Republic avoids this outcome because even a very large majority cannot infringe the rights of everyone else -- even when the majority lives in big, concentrated places like cities.

That was the magic sauce of the original design in our legislature and Presidency.  It's why we have an Electoral College -- to provide a bit of "overweighting" to those places that are utterly crucial to the cohesiveness and survival of the nation as a functional republic -- that is, a bit more balance against tyranny of the majority of 50%+1.

We got rid of the biggest check and balance with the 17th Amendment and I have, for decades, maintained that whenever America finally is declared dead and done, and the book is closed, that will be written in as the reason our nation's political system failed.  It's the only Amendment we cannot reasonably repeal, because to do so would require the sitting Senate to vote itself out of a job.  I'm sure you can figure out how likely that is.

But we can avoid doing more violence to our Constitution -- and we had better, or the outcome, given the annals of history available to anyone who cares to look, is quite certain.  If you want to see how this turns out should you keep pressing the issue go have a look at the map of how many states Trump won .vs. Clinton, or how the county-by-county map looks.  You'll see a lot more red of various shades than you will blue.

The bottom line?  Go ahead and be a sore loser.  Go ahead and whine.  Go ahead and try to change what our representative process led to.  Go ahead and decide to loot, burn and beat.  Refuse to accept the result of the election, if you insist.  Hell, go ahead and try to threaten or even bribe the electors!  Make sure you tear down the last little bit of foundation and structure inherent in the design of the legislature and executive of the United States.  Who needs it; it's all in the name of being "progressive", right -- even if when counted by landmass, counties or states the election was a landslide for Trump.

Just don't be surprised, if you keep it up, that at some point, given that you're utterly reliant on those you're abusing for the basics of life -- the loaf of bread, the gallon of gasoline, the electricity that powers your lights -- they decide they've had enough.  That day your supply of cellophane-wrapped meat and plastic bag full of bread disappears like a fart in the wind.  There comes a time when those who you've put the boot to for so long, and then try to deny the ability to change things peacefully through the representative process our founding fathers gave us, decide that despite their religious beliefs and good manners they're not going to service you on their knees any more.

Don't be dumb enough to think you can keep doing what you've been doing forever because you can't and if you go too far there will be no warning, no second chances and no saying you're sorry.  It'll just happen starting with one final stupid act -- and then we all lose.

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