“We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military–industrial complex. The potential for the disastrous rise of misplaced power exists, and will persist.
“We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals so that security and liberty may prosper together.” - Dwight D Eisenhower farewell address to the nation 17 January 1961.
Whoa… another good day for the Dow, up 135 points.
Gold, meanwhile, was flat.
We don’t know, but we caution readers against jumping on this band wagon. This trundling buggy could over-turn at any moment. Margin debt is back to ’07 levels. Sentiment is overwhelmingly bullish. Prices are near record levels. Price to earnings ratios are so high it is almost certain that sellers will fare better than buyers. Moms and Pops are back in the market – time for serious investors to bug out.
We leave our ‘crash alert’ flag up as a warning.
And, we change the subject…
When Ike Eisenhower made this speech, many people were puzzled. Eisenhower was a career military man. How could he be so disloyal to his professional class, they wondered?
But Ike knew something most people don’t. He understood war-mongers. And he knew that armed zombies are the most dangerous zombies of all.
We saw Ike in the flesh many years ago, just before he died. We were visiting our own father in the Walter Reed military hospital in Washington. We were walking down the corridor with Dad, a WWII veteran, when he suddenly stood up straight and saluted. It has been at least 20 years since he had worn a uniform, but the reflex was still there. When General Eisenhower whisked by us in a wheelchair, Dad came to attention.
Now, another 40 years has passed. Eisenhower’s warning, ignored and forgotten, has turned into a curse. For reasons of its own – money, power, status – the ‘military industrial complex’ pulls us into war after war.
Bill Bonner on markets, economics & the madness of crowds
Get Bill's free daily email 'The Daily Reckoning' sent straight to your inbox
Our old friend Steve Chapman:
The United States boasts the most powerful military on Earth. We have 1.4 million active-duty personnel, thousands of tanks, ships and planes, and 5,000 nuclear warheads.
We spend more on defense than the next 13 countries combined.
Since 1991, notes University of Chicago security scholar John Mearsheimer, the U.S. has been at war in two out of every three years…
… We are more secure than any country in the history of the world. What almost all of our recent military interventions have in common is that they involved countries that had not attacked us: Libya, Iraq, Serbia, Haiti, Somalia, Panama, Grenada and North Vietnam.
With the notable exception of the Afghanistan invasion, we don’t fight wars of necessity. We fight wars of choice.
Why do we choose to stick our noses in other people’s business? What reward do we get for the trillions spent, and the young men with missing limbs and suicidal tendencies?
Why do we do it? Hawks, doves, geo-political strategy, national security – none of them have anything to do with it. They are just wind. BS. TV babble. The real reason we spend so much and get ourselves into so many wars is that we have developed a whole class of military zombies. Their careers, their wealth, their social standing, their sex lives – all depend on meddling in other people’s affairs.
A few years ago, we wrote a book with Addison Wiggin called Empire of Debt. We explained the phenomenon as something great powers inevitably do. As soon as they can push other people around, they aspire to empire, we said.
In a new book, not yet released, we explain it in another way: humans developed into what they are in the Palaeolithic period. Back then, based on bone records and guesswork, if the men of a tribe weren’t ready to defend themselves, fiercely and without question, the tribe might not survive. Their women and their territory might soon be taken from them. Those pre-civilised instincts are now hard-wired into the human race. In a modern context, America’s wars seem silly, stupid and counterproductive. But they are as popular as a football championship.
Both of those explanations have merit. But Ike understood it differently. He saw how powerful internal forces drive a military machine to become an empire, and to make war. An ‘educator’ will try to aggrandise himself by insisting on more education. A butcher will want more meat on the menu. And a man with a gun in his hands will declare – with a straight face and in solemn sincerity – that we need to kill someone in Syria in order to protect our manhood.
• Don't miss Bill's next Daily Reckoning. To receive the next article straight into your inbox as soon as he's written it, sign up to the email list here.
Information in The Daily Reckoning is for general information only and is not intended to be relied upon by individual readers in making (or not making) specific investment decisions. The Daily Reckoning is an unregulated product published by Fleet Street Publications Ltd. Fleet Street Publications Ltd is authorised and regulated by the Financial Conduct Authority. FCA No 115234. http://www.fsa.gov.uk/register/home.do
New to MoneyWeek?
Welcome, and thank you for visiting us.
Here at MoneyWeek, our aim is simple. To give you intelligent and enjoyable commentary on the most important financial stories of the week, and show you how to profit from them.
If you've enjoyed what you've read so far, we've got something you'll definitely be interested in.
Every week day, Monday to Friday, we send out a thought provoking and often controversial email called the Daily Reckoning. In it, we try to figure out the markets and how current economical events are shaping the world we live in. If you're interested in investment opportunities and the markets, we think you should be reading it…
With your permission, I'd like to send you the Daily Reckoning for FREE.
We hope you enjoy your stay on the site.
Editor, The Daily Reckoning