Gingrich, Mexico and Drugs: Meh
The Market Ticker - Commentary on The Capital Markets
Logging in or registering will improve your experience here
Main Navigation
Full-Text Search & Archives

Legal Disclaimer

The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions.


The author may have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein.

The Market Ticker content may be sent unmodified to lawmakers via print or electronic means or excerpted online for non-commercial purposes provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media, to republish full articles, or for any commercial use (which includes any site where advertising is displayed.)

Submissions or tips on matters of economic or political interest may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must include full and correct contact information and be related to an economic or political matter of the day. All submissions become the property of The Market Ticker.

Considering sending spam? Read this first.

2019-11-09 07:00 by Karl Denninger
in Editorial , 272 references Ignore this thread
Gingrich, Mexico and Drugs: Meh
[Comments enabled]

Color me surprised...

The key to destroying the Mexican cartels is in America not Mexico.

As long as Americans send an estimated $19 billion to $29 billion in drug money a year to Mexico (as estimated by ICE) there will be cartels willing to take it. Kill one generation of cartel leaders, and a new generation will emerge.


Reforming our criminal justice system, which I strongly support, does not mean we have to accept the legalization of heroin, cocaine, fentanyl and other deadly drugs. It means we must find economic sanctions – and effective treatment – for drug users while retaining much tougher punishment for those making money while enriching the drug cartels.


People use drugs for many reasons.  A significant percentage of those who abuse drugs are mentally compromised and a decent percentage of those folks are permanently mentally compromised.  As in mentally ill.  They use drugs as a means of self-medication.  You're not going to fix this with talking and if you recall we closed all the long-term care facilities and ejected those people into the street to fend for themselves.

Then there are those who have given up.  They see no realistic future in which there is prosperity or happiness for themselves.  You, Mr. Gingrich, along with the rest of the political class, is largely responsible for this.

Tucker Carlson has started exploring this topic by asking this question: Is it worth being sober?

Well, I'll answer that: The government and media have done their level best over the last 30 years to make the answer to that question, for a huge and growing part of the population, a resounding "no."

Life is supposed to get easier and cheaper as technology advances, and not by a little either.  If productivity advances at 2% a year all else being equal in 20 years you should need 1/3 less effort -- and money -- for the same standard of living!

Over my adult life cars should have gone from somewhat-expensive to laughably cheap.  Ditto for houses, energy, food, medical care, education, communications and entertainment.

Of course exactly none of those things have become laughably cheap, say much less simply cheaper.

Houses cost multiples of what they did in 1980.

So do cars.

So does medical care.

So does education.

So does energy.

So does food.

A ticket to a matinee movie was a buck.  What is it now?

How about a beer?

And how about taxes?  Government reaps this same benefit from productivity, and not only wastes it they destroy you and your freedom at the same time.  Taxes should be 30% lower across the board but they're not; sales taxes, property taxes, vehicle registration taxes and more have all skyrocketed; in many areas property taxes have more than doubled.  In many states sales taxes are up 50%.

Who squandered all of that productivity improvement and cheered on offshoring a lot of jobs, all in search of a buck less an hour in labor overseas?


Now take all this and the "average" American can no longer spin pizzas and go to college to get a degree that returns enough money to handily afford to buy a house, settle down with someone and raise a couple of kids with one of the two of you staying home to actually raise them on their own.  The combination of radically increased costs in all of the above now make such a venture absolutely unobtainable for a huge percentage of the population.

Should I be surprised that when people come to this conclusion some percentage of them say "**** it" and decide to get stoned instead of tilting at windmills?

How about this?

If you're going to destroy people's future outlook on purpose for a buck, as both you and the left have done, then bitch when they decide they'd rather get stoned than play a rigged game they're destined to lose -- and you'll "help" them by stepping on their head when they try to keep it above water on top of it, you can go **** yourself you old coot.

If you're serious about getting the cartels off the face of the earth the place to start is by putting everyone who promoted and benefited from policies like chain migration, illegal immigration, H1bs, offshoring via "free trade" deals to places that pay two bucks an hour so you don't have to pay $20 or more and all of the rest in prison for life, rolling back all of those policies.  We can raze half the government at federal and state levels while we're at it, take the teacher's unions and other "public service" extortion outfits and feed all of them to sharks and hang every one of the "contractors" that have ripped off the American public for decades whether it be building planes for the Air Force, ships for the Navy or roads and other assorted "public works."

We can give the medical scammers a choice: Cut it out right now; publish a price and everyone pays the same price, today, or your other options are limited to prison, the gallows or we let the angry mob start by being medieval with your children and spouse -- and then they turn on you.  All without penalty.

We can give the educational scammers in "higher" education a similar choice: No more debt backed by the government.  Ever.  Further, all student loans are able to be discharged in bankruptcy.  If you wish to make stupid loans you eat them when they blow up.  If you goad students into taking a major in "women's studies" at $100,000 a year and loan them the money it will have to come out of your endowment, which will soon have a zero balance.  You don't like that deal?  Then choose between prison, the gallows and the angry mob too.  As for the existing loans?  If the students you already rooked default take it out of the college endowments.  By force.  The entity with superior information on the viability of that course of study and outcome -- that is, the college -- bears the risk.  That's called justice.

Those two steps, alone, will in fact erase the Federal Deficit and the government will run a surplus.

Now let's go further.

The Fed's "stable prices" mandate shall be enforced and if not, well, the members of the FOMC get the gallows.  On the National Mall, at high noon, in public.  The setting of a negative real rate -- that is, a rate of interest below that of nominal GDP expansion plus productivity, shall be presumptive proof of their refusal to enforce said mandate.  Upon trial and conviction they hang and the carcasses are left on public display for the buzzards.

We immediately slap all non-parity nations with monetary, wage and environmental parity tariffs.  Here's looking at you China, India, Vietnam and of course Mexico.  Any nation without a fully convertible currency, such that it can play games away from the market in that regard, is embargoed 100% and all US-denominated holdings, whether in currency, securities such as stock or bonds, or property, whether real, personal or intellectual held by their nationals, firms and government are declared void.  No more H1b visas -- period.  Further, if you're here illegally you leave right here and now.  No year long process; you either are or aren't, and if you are you're arrested and gone.  100% E-Verify is applied across the board, and any business that fails to use it or cheats, no matter who they are, no matter how large or small, has every single executive immediately go to prison and is asset-stripped to their underwear.  Run a "birth tourism" scam or lease to illegals your property is forfeit immediately.  If you cross our border illegally and do not immediately surrender and leave when challenged, or show evidence of intent (e.g. digging tunnels, climbing or cutting fences, etc.) the unorganized militia is fully within their rights to drop you right here and now and leave your carcass for the coyotes (the 4-legged sort) to eat as you're deemed to be invading the United States.  If you want to enter the United States for a legitimate purpose you do so at a border crossing point and follow formal and legitimate procedures.  All the offshored and illegally-held jobs come back for Americans. Now those who want and need a job, have a job.  Further, wages rise -- a lot.

All cartels and monopolists shall disband and conform to 15 USC if they wish to sell into the US market.  Period.  Yes, this includes (but certainly is not limited to) OPEC.  Drug companies?  You too -- no more price fixing, no constraints on cross-border shipments and no games.  You cheat, you're out and your US holdings are seized with your US-based executives arrested, tried and imprisoned.  Period.

We will also prevent the government from confiscating the people's efforts in the future by mandating that the federal budget as actually spent must decrease by the amount of productivity improvement on an annual basis, each and every year, and in any year when it does not happen there is no penalty for any act a citizen takes in retribution against any elected official, any member of their staff or any of their families, with that waiver existing for the full next fiscal year.  Oh, and we measure it by actual debt outstanding, not the bull**** arm-waving nonsense published in the MTS.  One exception -- during a declared war the people can vote, by 2/3rds majority, to permit a deficit for the duration of the declared war.  That'll take care of that; there will never be a federal deficit again except if we're threatened sufficiently to actually declare war.  In 30 years or so the government will no longer have any debt at all.

Now people will have a reason to look forward to the future.  No, it won't be all wonder and light in a day.  But if I can see a tomorrow where I gain 2% purchasing power, compounded, every single year, my children will have it better than I by far in that a newborn will get 18 years of that compounded before they leave home, where said new adults will have to work less hard for fewer hours and have more, I've now got a really good reason to settle down and make that household, don't I?  So does my spouse, and even better, she (in my case of course) would have every reason to stay as we all benefit over time by that stable family structure and its improved purchasing power.  If I or my wife can stay home and raise said kids, knowing that this will happen because if it doesn't for each year it does not I get to eat long pig for Thanksgiving comprised of the public official of my choice with my only penalty for doing so being the need to buy a case of BBQ sauce and chili powder so it's palatable as a protein source, you can bet that will never happen and the government will never run a deficit again.

Now my only reason to use drugs is if I'm medically insane or just decide I'm done, despite it being obvious that I can in fact get ahead.  The former we handle by re-opening the hospitals.  The latter is a personal choice and yes, it ought to be legal if I want to do that.  But -- by going and buying addictive drugs such as heroin, fentanyl or meth I am waiving all government social program assistance of any sort.  If I want to commit suicide by drug, I have the right to do it and we won't fund any cartels with that money.  But I can't sponge off everyone else -- it's on me.

There will be damn few of those people, however, because now I have no reason to despair.  Oh sure, I might have bad luck today but tomorrow will be a better, easier day on balance, with a reasonable degree of certainty, for essentially everyone who wants it to be.  There will be no more boots on the neck and definitely no more boots on the head.

And all the ****heads who caused this, including Gingrich, will either recant and reform immediately, be out of a job, in prison, or find that they're a protein source.

Which is exactly how it should be.

View with responses (opens new window)