The Colour of Money
Good ol’ Charlie Munger. Last week, the 98-year-old gave his opinion on the biggest danger facing US democracy. Yahoo! Finance was on the case:
‘Citing examples from the Roman Republic to Adolf Hitler to Latin America, Munger said, “Inflation is a very serious subject, you could argue it is the way democracies die.”
‘He notes that it was after years of inflation when “eventually the whole damn Roman Empire collapsed, so [the current situation] is the biggest long-range danger we have, apart from nuclear war.”’
When the money goes, everything goes. Consensual democracy goes along with them. And our hunch, this morning, is that the feds will lead the way.
The other day, we saw that NFL teams seem to discriminate in a peculiar way — against black coaches…but in favour of black players. We guessed that — if you want to win the Super Bowl — you might want to hire someone who can keep crossing the goal line, rather than hiring a guy just because he is white. Or black.
This thought took us to the next one — that we are generally better off keeping our eyes on the ball…than by pursuing goals set up for us by the intellectual elite.
‘Public intellectuals should be regarded as charlatans,’ says Nassim Taleb.
We’ve already seen that the three biggest initiatives that the intellectuals came up with so far this century — the War on Terror, the Wall Street bailout, and the COVID Panic — were all driven by corruption and riven by incompetence. All were failures. The War on Terrorism achieved nothing. The Wall Street bailout made the economy weaker, not stronger…and buried the whole nation under US$44 trillion in additional debt. And the COVID virus romped across the nation regardless of the feds’ shutdowns and mandates.
So…what about the latest broad policy goals? Save the planet from CO2? Put an end to racism? Make everyone equal?
Those programs will cost money (Janet Yellen estimated the cost of eliminating carbon emissions at more than US$100 trillion…). Will they pay off?
And what about you, Dear Reader? Should you do your part by investing only in ESG (environmental, social, governance) companies? Is that how real progress is made? By conscious intention? By activists…do-gooders…and world improvers? Or are efforts to rinse out the stain of slavery…to control the world’s temperature…and to make us all the same…doomed to fail? Do they even make the situation worse for the people they claim to help?
One of the narratives favoured by the government elite is that the US is a ‘racist country’, always has been…and without concerted effort by the great and the good…always will be.
This message itself may do good…or harm. While it gives the old, rich, white investor an easy way to feel good about himself — simply invest in ESG companies — it signals to the young, poor, black person that his problems are not of his own doing. Therefore, he might conclude, there is nothing he can do to improve things for himself. No point in studying late at night, working hard, or saving his money; he can’t win.
We had a roof repaired in Baltimore recently. We were surprised when the crew arrived to do the job. They were a group of jolly, French-speaking immigrants from Togo. What were they doing here? Didn’t they know how horribly the US treats its ‘people of colour?’. They didn’t seem worried about it. It was the colour of money that interested them.
And the people of colour keep coming.
Deseret News has the report:
‘Following the relaxation of U.S. immigration policy in the 1960s away from racial preference, Black immigration to America in particular climbed sharply. According to the Population Reference Bureau, the foreign-born ‘Black population in America increased seven-fold in the next two decades. Between 1980 and 2005 it tripled again. By 2013, Pew Research Center reported that Black immigration had more than quadrupled since 1980.
‘The latest studies now place the Black immigrant population around 4.6 million by 2019, nearly double the community’s size in 2000. The figures are even larger for Latin American immigration. In 2018, an estimated 44.8 million immigrants were living in the United States with more than half coming from Mexico or Latin America, according to a Pew Research Center report.’
Many of the black immigrants come from Caribbean countries such as Haiti or from Africa itself. The average wage in Haiti is about $800 per year. In Sub-Saharan Africa the average wage is only $315, according to Forbes.
Native-born black Americans might know how the deck is stacked against them. There’s a white intellectual on every street corner to tell them so. But the poor foreigners don’t know what they’re getting into.
Steeped in white supremacy, hatred, and racism…it is amazing that the US lets them enter in the first place. Or that they should wish to go there at all. And then, the new arrival, with almost no money…and barely speaking English…goes to a city like Baltimore, where — because of systemic racism — four out of 10 young black men are unemployed…
…he draws his cards…and the next thing you know, he’s repairing a roof!
‘The researchers write that Black immigrants tend to earn more than US-born Black households, the former’s median income being $57,200 while the latter’s is $42,000. Black immigrants, however, still lag behind other immigrant racial groups, the pooled median being $63,000 for all households.’
Huh? What gives? How come American whites discriminate so effectively against native born blacks, but not so much against foreign born blacks? How come they block the black coaches but not the black players?
And what about Asians? They’re ‘people of colour’, too. Yet, while white household income is reported at US$72,000 per year, Asian household income is US$98,000. Where’s the ‘white privilege?’ Where’s the ‘equality?’.
Almost every pulpit, newspaper, and microphone has sent forth the warning: the US is a racist country. If so, the racists do a sloppy job of it.
For The Daily Reckoning Australia