Thursday, June 21, 2018:
The longest day of the year in the Northern Hemisphere.
POITOU, FRANCE – “Render unto Caesar that which is Caesar’s” is a line from Jesus of Nazareth.
Typically clever, and almost evasive, it left open the mischievous question – “What is Caesar’s?” – for roughly 2,000 years.
Moral philosophers had been bedeviled for even longer: If you want to do the right thing, can you just obey the authorities… or do you have to figure it out for yourself?
Finally, last week, like Moses coming down from Mount Sinai, legal and biblical scholar, U.S. Attorney General Jeff Sessions – who previously distinguished himself by sponsoring a bill to name September 2016 as “National Prostate Cancer Awareness Month” – handed down the answer.
More on that shortly. But first…
Dry Spell
The Dow was down again on Wednesday… but only slightly. That makes it the seventh straight day of losses for the index, the worst losing streak in over a year.
Where it will go from here, no one knows. But there are good reasons to think that the “top is in.” If so, we’re in for a long dry spell.
If we’re right, U.S. stocks will “underperform” for many years. Readers are advised not to expect to get rich in the stock market, unless they are very lucky or well-advised. Las Vegas is likely to be more rewarding than Wall Street.
We’ll leave it to the technicians and cycle-watchers to make their own case. Here at the Diary, we focus on fundamentals.
Obviously, U.S. finances are worsening. Government deficits are increasing, just as the Fed is putting up interest rates. This is bound to lead to trouble.
But the bigger, or more insidious, problem is Caesar himself; he seems to want more and more things rendered unto him. And our observation is that the more Caesar gets, the less is left for everyone else.
Net Satisfaction
At the deepest level, prosperity increases when people are allowed to figure it out for themselves… that is, when consenting adults can do business with one another without Caesar butting in.
Remember our formula for human satisfaction: S = W/W – W/L. Take all the win-win deals and subtract the win-lose deals (robberies, wars, swindles, boondoggles, redistributions of wealth, regulations, restrictions…). What you have left is Net Satisfaction.
S is not necessarily material prosperity; wealth may or may not be what people really want. Sometimes they prefer leisure… Facebook… and team sports.
But the only way for you to know what they want is to let them decide for themselves – letting them do win-win deals with each other.
Yesterday, we said – with no supporting evidence – that trade was one of those things that people should figure out for themselves; Caesar ought to keep his nose out of it.
So today, we double back and wonder: What should Caesar be rendered?
Chapter and Verse
A greasier and more modern way to phrase the question would be this: How much of our lives should the public sector control?
Alert readers will guess our answer quickly. There is nothing clever or evasive about it. It is implied by all that they have read so far and by our formula for human satisfaction above.
We have seen that the private sector vernacular is a vast and intricately complex web of win-win deals: I’ll scratch your back if you scratch mine. I’ll say “thank you” to you if you say “thank you” to me. I’ll give you $3 if you give me a gallon of gas.
The whole giant edifice of modern capitalism – its giant corporations, its swaps and debentures, its markets and supertankers – rests upon those very simple deals, in which individuals make individual choices.
A man buys a pack of cigarettes and sends a signal to a vast corporation – it, too, composed of thousands of individuals.
In response, it may change the color, add more nicotine, or raise the price. Hundreds, thousands, millions, billions of little private deals create a huge global economy.
Of course, the public sector has its back-scratchers, too. It has decent people doing decent things. It has real workers – teachers, firemen, doctors, builders – who do real work that people might otherwise pay for voluntarily.
But there is one thing and one thing only that distinguishes, fundamentally, the public sector from the private sector: Every deal in the public sector, no matter how trivial, is backed by the threat of violence.
And last week, Mr. Sessions – explaining to the nation how it came to be that America separated young children from their parents and put them in cages – cited chapter and verse.
“The Bible says we can do it,” was his reply. Specifically, he cited Romans 13 for his moral authority, in which the apostle Paul urges his correspondents to be “subject to the government authorities.”
Of course, St. Paul might have misspoken. Or he might have been stating an obvious fact, as in, “The feds can do what they want with us.”
What he was clearly not doing was helping Sessions with his argument that whatever the feds say to do is the right thing to do.
Because, if you could go to Heaven simply by doing what you are told to do, Jesus could have kept his mouth shut.
Ordered to Shoot
The question was posed, perhaps most vividly, to the men of Germany’s Reserve Police Battalion 101 – also known as the “Hamburg Policemen” – in 1942.
They were men in their thirties, a little old for front-line duties. But as the war in the East developed, they were called in to deal with the “Jewish Problem,” which led to the children issue.
That is, they were meant to take Jews to work camps or death camps… or camps where they could be worked to death. But children, the sick, and the old just got in the way. What to do with them?
A member of the 101, Bruno Probst, later testified that while no specific orders to shoot them were given, the officers “made it clear that nothing could be done with these people.”
By then, things were heating up on the Eastern Front. More and more captives – Jews and Poles – were coming into the Nazi grip.
They needed to be “processed,” removed, and resettled. It wasn’t until July 13, 1942 that the real killing began.
As many as 1,500 Jews were lined up. The Hamburg Policemen were given the task of killing them. As far as any of them knew, it was a lawful order. It came from officers, who got it from other officers, all the way up to Germany’s lawful head of state, the Führer himself.
The Hamburg Policemen were overwhelmingly Christian. They had probably heard of St. Paul’s instructions to the Romans. They probably didn’t know that the letter was not written by Paul at all, but by Tertius of Iconium, as modern scholars believe.
But it hardly mattered. They were given the order to shoot… and they had been taught to follow orders.
Besides, what higher authority is there than Caesar?
A few hesitated. Fewer still refused. At least one wrote home that he feared God would get even with them.
But as the orders kept coming down, the killing became routine. Before they returned to Hamburg, they had killed some 83,000 people – mostly Jews.
Idle Threat
And yet, they were policemen. They were Christian. They had been trained to uphold the law and to protect people and their property.
What was this strange new duty that they had been asked to perform? And was it not contrary to their religious beliefs? They were supposed to love their neighbors; what kind of love was this?
Five hundred Hamburg Policemen had reported for duty in Poland. How many do you think refused… or were unable… to do as they had been ordered to do?
Twelve.
We are shocked. But we’re not sure why. Did we expect more of them to have a stronger sense of what was wrong and what was right? Or are we surprised that any of them did?
The whole episode is so shocking that every detail shocks. Who would give such an order? Who would obey it? And who, surrounded by 488 law-abiding, jack-booted, rifle-toting patriots would dare to say no?
We don’t know. We weren’t there. We don’t know what we would have done.
But the easiest thing to do is to always follow orders. As long as they don’t lose a war or an election, you’ll have the authorities at your back.
You are safe – at least, during daylight hours.
But at night… with no rifle in your hands and no uniform on your back… who knows what terrors will haunt you?
Will you be tormented by ghosts and demons? Will you toss and turn, and awaken suddenly in a sweat… cursing life, but fearing what lies beyond it?
And later, when the fever of life itself breaks… perhaps then, you will discover that Hell was not just an idle threat after all…
And you will wish you had done some thinking of your own.
Regards,
Bill
Category: Market updates