‘Brutal’…‘horrible’…‘horrendous’ — these are just a few of the hyperbolic adjectives used to describe last week’s stock market.
The S&P 500 is down 6% so far in 2016…and $1 trillion in investor wealth has gone up in smoke.
In fact, it was the worst opening week for global markets in history. But c’mon…look at the glass as half full. Wall Street’s decline was less than half of Shanghai’s 14% loss.
And this morning, Chinese stocks are tumbling again. So, there will likely be more trouble ahead — on both sides of the globe.
But hey, this is only the beginning, not the end. That’s still ahead!
A modern Western
‘It’s a modern Western,’ said one of our sons, describing the standoff in Oregon between armed militia men and the feds.
‘What do you mean?’ we asked.
‘In modern movies, you’re never quite sure who the good guys are.’
As ABC News reports, the ‘Oregon Standoff’ — as it is being called — is now in its second week.
‘The occupation of a national wildlife area by a small, armed group upset over federal land policies stretched into its second week. […]
‘The leader of the occupation, Ammon Bundy, has repeatedly rejected calls to leave buildings at the refuge despite pleas from the county sheriff, from many local residents, and from Oregon’s governor, among others. He has said the group will leave when there is a plan to transfer control of federal land to locals.’
Today, we take a look at what is going on — more for entertainment than enlightenment or utility.
What do we find? A heady bunch of myths, generously mixed with fraud and fantasy, all running into each other like drunks fleeing a bar fight.
Of course, we only know what we read in the papers. Alert readers who have been following the case will know more. But we will steer clear of the facts; they hardly matter.
People will argue about facts. They will get upset about them. They will twist and distort them to suit their interests. But facts are facts — bloodless, dull, and inert.
Myths, on the other hand, run rich with blood and bile. They promise wonders at the limits of our imagination. Wealth…love…self-respect…liberty…virgins in Heaven…matters of principle…and free cigars on Earth — that is what makes the world go around.
A farcical episode
The best historic parallel for understanding the Oregon Standoff is probably the Whiskey Insurrection of 1791, a farcical episode in American history that we will now recount.
Then, as now, there were people out on the frontier (which was then the other side of the Appalachian Mountains) who claimed strong fealty to the US Constitution…and who wished to assert the rights they believed had been won in the War of Independence.
They were not cattlemen back then; they were farmers and distillers.
Corn was a primary source of calories. But preserving it — or transporting it over the mountains to markets on the East Coast — was expensive. So, they condensed the corn into whiskey. This made it easier and cheaper to stock and to ship.
Having just fought a war with the British…secured the independence of the new nation…and guaranteed the sovereignty of its constituent states and the liberty of its people…the frontiersmen were more than a little cheesed off when the federal government imposed a tax of about six cents a gallon on whisky.
They saw that the fix was in…
The national and state governments (and the elite landowners who controlled them) now had big war debts to pay; they were going to put the cost onto whiskey producers. And the large producers paid a lower tax because of the way the tax was calculated.
Poor Robert Johnson! The agent of the new federal government sent to collect the tax in Washington County, Pennsylvania, was more than a little discomfited when the local distillers tarred and feathered him on 11 September 1791.
There were, of course, appeals for ‘peace’ and ‘moderation.’ But they were drowned out by more radical voices…such as those coming from the Mingo Creek Association — what Senator Harry Reid would call a ‘domestic terrorist’ group of the late 18th century.
Pretty soon, blood was up on both sides…with the resisters vowing to fight the Federalists and the feds — led by Alexander Hamilton and George Washington.
The rebellion collapses
Hamilton was the nation’s first central banker and a proto-central planner. He wanted to squash any resistance to the new government.
Some thought that he deliberately provoked the Whiskey Rebellion to assert and define the power of the federal authorities.
Washington, meanwhile, was not only the nation’s president. He was also the largest distiller in the country and, arguably, stood to gain market share by squeezing out the marginal producers in the West.
Resistance was strong all through the Appalachians and especially intense in Western Pennsylvania, where anonymous letters to newspapers were signed ‘Tom the Tinker.’ And locals who paid the tax were attacked as ‘collaborators’ and ‘cowards.’
It wasn’t just the money, they said. It was the principle of the matter. Out in the woods and mountain hollows, people were free to think whatever they wanted.
Many came to believe that the cities themselves were evil; some referred to Pittsburgh as ‘Sodom’ and even proposed to burn it down.
The insurrection gathered gas — with as many as 7,000 people attending a rally on Braddock’s Field near Pittsburgh.
But the feds were determined. Hamilton organised an invasion force of some 12,000 soldiers, which clumsily made its way across Maryland, through the Cumberland Gap, toward Western Pennsylvania.
At the approach of the army — led by Revolutionary War hero Light-Horse Harry Lee — the insurrection collapsed.
The leaders were arrested. 10 were tried for treason. Two were convicted (one of whom was regarded as a halfwit). Both were pardoned by Washington.
More to come…
For The Daily Reckoning, Australia
From the Archives…
By Vern Gowdie | Jan 09, 2016