Gary North's REALITY CHECK No. 55 November 13, 2000

Before I get to this month's topic, I want to cast my information net. Maybe I'll catch some fish. The REALITY CHECK mailing list has readers who may have answers. For me not to use this resource for everyone's benefit would be foolish.

I plan to start a new Web site in January which will feature economic commentaries from a number of top analysts. It will also provide links to hard-to-find economic columnists in local newspapers and specialized, Web-based magazines. You may know of a perceptive writer in your local newspaper, or better yet, on your local newspaper's Web site. My favorite example is Scott Burns, who writes for the DALLAS MORNING NEWS. If I can locate five more analysts of the same quality -- highly unlikely -- visitors to my site will be the beneficiaries. Send me your recommendation and, if possible, a link to the writer's columns. Mail this to:

gnorth@bigfoot.com

I also have three slots remaining for my on-site commentators. These are reserved for newcomers. It's always wise to have a few new faces on a Web site like mine. Economic conditions are about to change dramatically. New analysts with new investment approaches are important for investors' long-term success. If you have been following a really good in-house analyst or newsletter commentator who might like an instant national audience, forward a copy of this issue of REALITY CHECK to that person. Suggest that the person contact me. I'll send him or her the address of an auto-responder letter in which I outline exactly what topics are available.

THE POLITICS OF PARALYSIS

Well, I've got to get in my two cents' worth on the Presidential election of 2000. Everyone else is.

1. THE ELECTORAL COLLEGE

Let me affirm my conditional support for the Electoral College. I'm with the Constitution's Framers. Sort of.

One major goal of the Framers in creating the electoral college was to keep the states from competing against each other for influence in Presidential elections by lowering the standards for voting. If the President were elected directly by the total votes cast nationally, large-population states would gain a significant advantage over small states. They get an Electoral College advantage by population through Congressional districts, but low-standards eligibility would accentuate this advantage even more. Direct election would pay large states to allow every possible person to vote -- illiterates, the unemployed, etc. In other words, it would look like today's electorate, only worse. The Framers knew better. The Electoral College was created to allow the states, as states, to have their say in terms of the number of Congressmen. But at the margin, the system is geared to protecting small states' interests in close Presidential races. Look at a voting map of the states in the 2000 election. The small ones, except in the Northeast, mostly went for Bush.

The main weakness of the Electoral College is almost never discussed: it's too centralized. Had each Congressional district had its own elector, the states would not have become all-important in Presidential elections. There would not be a "winner take all" battle in each state.

This country fought a civil war over state's rights vs. federal rights. It was the wrong fight. It should have been Congressional district's rights vs. state's rights and federal rights.

County government was where primary civil sovereignty lay prior to 1787. That was where the property taxing authority was, which was the primary source of government income. It remained so through the nineteenth century. Taxation was analogous to the tithe, which is collected by local congregations, not by distant bishops.

(Side note: the biggest forgotten issue of the Revolutionary War, which is not discussed in the textbooks, was the issue of bishops. Colonists feared that the Anglican Church was going to send a bishop to America. That would mean he could ordain lots of Anglican priests, which most colonists opposed because King George III was legally the head of the church. Would-be Anglican priests had to sail to London to get ordained, which reduced their supply. The main book on this is Carl Bridenbaugh's MITRE AND SCEPTER, 1962).

The Electoral College was invented by state politicians who really did not expect the nation to adopt unofficially a two-party system. But from the day the Constitution was ratified, a two-party system appeared. It has survived except for transitional Presidential elections.

In 1860, four men were serious contenders for electoral votes: Lincoln, Douglas, Breckenridge, and Bell. A map of the Electoral College's results in 1860 is astoundingly similar to the results this year. (The states in gray did not exist in 1860.)

http://www.lewrockwell.com/orig/ostrowski7.html

It is quite possible that the Civil War would never have been fought if electors in the North and South had voted "Congressional district rights" instead of "state's rights." Douglas would have won far more votes, North and South. He was in favor of each state's authority in legalizing or prohibiting slavery. He was not feared in the South as an abolitionist. But Southerners knew that the North would go for Lincoln because of the state-based, winner-take-all nature of the Electoral College. They ran their own regional candidates, Breckenridge and Bell. Douglas lost the votes of their supporters. Because of this, despite the fact that he ran as the candidate of the largest and oldest national political party, he came in fourth instead of first. And the war came.

Furthermore, there were Congressional districts in Southern states and all border states whose voters did not want to secede. Northeast Tennessee is one example. The famous "Kingdom of Jones" in Alabama is another. But local opinions within each state, North and South, were blotted out by the winner-take-all Electoral system. (The only modern scholar who seems to have recognized this is R. J. Rushdoony, who wrote about it back in 1965 in his classic little book, THE NATURE OF THE AMERICAN SYSTEM.)

All this is beside the point in 2000. But before we tamper with a system that only failed twice -- 1860 and 1877 -- we should count the cost. Hillary R. Clinton, an Arkansas lawyer presently residing in New York, has recently called for the abolition of the Electoral College. A word to the wise is sufficient.

The basic premise of the Electoral College is still sound: give small states some protection in close races. Also, don't make the Presidential election a factor in dumbing down the electorate, which results when large cities in large states can supply enough raw votes to make the difference in a tight Presidential campaign.

2. HEARTLAND AMERICA

Take a look at the election map. With the glaring exception of New Mexico -- still counting votes -- Bush won the heartland. He won it state-wide, and he won it in the counties. The county map is by far the most revealing.

http://www.geocities.com/statechurch/e2000map.jpg

With the exception of Oregon (maybe) and Florida (maybe), and New Hampshire, Gore won the West Coast, the Northeast, and North Central states. Had it not been for Nader, he would have carried Oregon, if he didn't win.

The South and Midwestern small states went Republican, the Big Sky states went Republican, and the middle states went Republican.

The counties in which the percentage of government welfare recipients is low went for Bush. Part of Gore's vote is the border state welfare vote. Look at the map of Texas. Look where the blue appears. Look where it appears in New Mexico. Part of it is the inner city welfare vote. Part of it is the reservation vote.

Look at the geographical size of the Navaho reservation counties in Arizona and New Mexico. Gore won them. This is in sharp contrast to the words of Chief Dan George's character in Clint Eastwood's great movie, "The Outlaw Josie Wales." The old Indian told the Confederate outlaw: "The Secretary of the Interior told us to endeavor to persevere. So, we went back to our lands. We endeavored to persevere. Then we declared war on the Union." The Indian reservation system was the first experiment in the United States with a full-scale welfare state. We can see how well it has worked: 135 years of poverty, subservience, and despair.

Then there is the hug-a-tree vote: more government regulations, less economic development. Look at the map of California. The coastal counties went for Gore. The heartland of California was solidly for Bush. The same is true of Washington and Oregon. (I'll get to this factor later in this issue. Environmentalism is way more important politically than most analysts realize, and has been since Republican John D. Rockefeller, Jr. invented the government parks' lock-out system in 1916 to keep middle-class people away from his and his neighbors' summer paradises.)

What we saw in 2000 was a sorting out of the country's regions. The heartland remains more conservative. The less dense the population, the more the voters voted for Bush. That's because the less dense the population, the lower the percentage of welfare recipients.

The taypayers' problem is this: all over the world, for three centuries, people have moved into cities. A loss of rural and small town local mutual assistance has been the price of greater personal economic opportunity, which cities do offer because of their greater division of labor. Voters in democratic countries have tried to use the civil government to guarantee them a tax-funded safety net, never thinking that their economic freedom is their greatest source of economic security.

Big cities are where the votes are for big government. We can curse this fact, but, at least so far, we have been unable to change it. That's why we need to do our best politically to shift the focus of political sovereignty back to the counties. But hardly anyone understands this. The 3000+ counties in the United States are where freedom-loving voters should focus their political efforts, not the Presidency, which the amusing cynic Ambrose Bierce in 1911 defined as the greased pig of American politics. This year, there was an extra thick layer of grease.

3. GEORGE W. HOOVER VS. AL CARTER

The party of whichever man wins the Presidency will suffer Congressional and Senate losses in 2002, and will probably lose the Presidency in 2004.

New Presidents pull in marginal Congressional candidates. This is the famous coattails effect. These coattails don't last very long. A political reaction always sets in at the margin after two years. The opponents start pillorying the President and his party.

Do you remember the last time that the Republicans controlled the Presidency and both houses of Congress? I can. Just barely. It was 1953-55. Ike was President. But the 1954 mid-term elections took away the House from the Republicans.

http://gop2000.philly.com/annenberg/file/0803gop.asp

Whoever wins this year's election will enrage the losers, who will work far harder in 2002 to undercut him.

Then there is the recession. The inverted yield curve has reappeared. It's a good forecasting tool of recession. The incumbent President will get blamed.

If Bush wins, he will face a recession and the death of Strom Thurmond. It's not clear which event will come first. Senator Thurmond ran for President in 1948 as a Dixiecrat. (If there is a deadlock on the Presidency beyond inauguration day, Speaker of the House Dennis Hastert is next in line. If he turns it down, Thurmond is next.) He is 98 years old. The governor of South Carolina is a Democrat. I assume that he will appoint a Democrat as Thurmond's replacement. If Slade Gordon loses the re-count in Washington state and Thurmond dies, the Senate goes Democrat.

If Bush wins and a recession hits next year, both houses of Congress will probably be in the Democrats' hands in 2003. It will then be a replay of Herbert Hoover's last two years in office: no cooperation. The Democrats will elect a President in 2004. Economic bad news plus the desire to get revenge for Gore's loss will mobilize the Democrats.

If Bush wins in Florida, and Gore drags his feet on making a concession, the Powers That Be will tell him to concede. He will then concede. The U.S. stock markets are falling fast. This degree of uncertainty is bad for stock markets. If necessary, a group of Democrat Wise Men from the Council on Foreign Relations/Trilateral Commission will visit Gore and tell him to cool it. He will cool it.

If Gore wins in Florida, Bush will concede immediately. His father was a CFR/Trilateral member until he resigned in 1980 when he was put on the Republican ticket. His paternal grandfather, Senator Prescott Bush, was a Brown Brothers Harriman investment banking house senior officer and a CFR member. His maternal great grandfather, George Herbert Walker, Sr., after whom his father is named, was an even more senior Brown Brothers officer, long before Averill Harriman bought into the firm, bailing it out financially, during the Great Depression. For the story of the Bush family's four- generation connection to the banking and energy Establishment, click here:

http://www.tarpley.net/bush1.htm

Print out the document. Get a yellow marker/highlighter, and get ready to have your illusions shattered. When you're through reading the document, click here for a follow-up:

http://www.tarpley.net/bush2.htm

[Note to those of you who actually do read both documents: you will be amazed. It's not what you've read in the conservative press all these years. If it were not for the footnotes, these two documents would be difficult to believe. This story has been available for a dozen years, when I first read it. There has been no detailed response or refutation that I have seen, and I have looked. The Web has made this information available for free, but still the public ignores it. Now, for my really hard core subscribers, read this: http://www.tarpley.net/bush4.htm It gives the story of Jupiter Island, one of three political islands in the United States where the decisions are made, and where the Bushes have a residence. For my report on these three islands, click here: http://www.lewrockwell.com/north/north20.html ]

George W. Bush, like his father and his father's uncle, George Herbert Walker, Jr., is a Skull & Bones member. Prior to reading the September, 1977 article on Bones that was published in ESQUIRE, I had never heard of this Yale University secret society. Later, I read Antony Sutton's book on Bones. During the 1988 Presidential election, the "Doonesbury" cartoon strip made light of Bush's connection to Bones. What the public did not know was that Garry Trudeau, the cartoonist, is a member of Bones ('70).

http://www.yaleherald.com/archive/frosh/1998/blue/secret.html

For a detailed article on Skull & Bones, click here:

http://www.newnetizen.com/archives/gbsandbnwo.htm

So, I predict that Bush will not drag his feet if he loses Florida. He will be well placed for a successful run in 2004. All he has to do is close his "I'm ending the national division for the good of the nation" concession speech with these words: "I'll be back." These three words will cut off in advance any significant fund-raising efforts by rival Republican candidates in 2004. These three words will make him the undisputed head of the Republican Party until 2004. He has time. He can afford to be magnanimous.

Then Al Gore gets to become Al Carter. Bush in 2004 will be able to ask the voters Reagan's election-winning question: "Are you better off now economically than you were in 2000?"

4. THE PUBLIC IS APATHETICALLY DIVIDED

The public really does not care much about politics. Only 51% of all eligible voters voted in 2000, up a mere two percentage points from 1996, which was the lowest percentage since 1924. (Can you name both candidates in 1924. No? Don't feel bad. Millions of voters couldn't in 1924, either. It was almost as bad as 1904, which was the last time American voters had a real choice. The bad guy won.) All of the media hype about the public's tremendous interest in politics this year was nonsense. The public really did not care.

Voters were divided. The campaigns reflected this. There was no burning issue. There was nothing in the public's eye that sharply differentiated Gore from Bush. Both candidates preferred it this way. Their conventions reflected this. The meanest words anyone said at either convention were Colin Powell's attack on Republicans, which they cheered.

If I had been George Bush, I would have run TV ads of the scene at the Democrats' convention, when delegates booed the Boy Scouts who came to bear the colors. Bush should have stood in front of the camera and asked: "Why did the Democrats boo these young men? Why? It's a disgrace." It was a disgrace, and most of us know exactly why they booed: the Supreme Court's recent 5 to 4 decision.

Given no meaningful choice, people don't choose. The country was split down the middle because the Presidential candidates had deliberately gummed up the middle. Not knowing who forthrightly and uncompromisingly opposed whom on any of the divisive social issues, and wisely not believing that the Feds will ever provide significant tax relief, the voters responded to the barrage of TV ads by dividing. "Flip a coin!" They flipped.

Soccer moms prefer soccer to politics. Businessmen prefer business to politics. As long as things seem to be going smoothly economically, voters don't care much who rules them. They can't do anything about it anyway.

When the economy turns bad, voters wait and see until the next election. If it's still bad on election day, they throw out the incumbent President. Reagan's presidency beat the system only because his recession came early: 1981. The recovery was visible by the mid-term elections of 1982, but he still lost the Senate.

If Bush gets elected, he had better hope and pray for an early, short recession. And he should plan on dealing with a Democrat Senate and probably a Democrat House in 2003.

CONCLUSION

We now await the results of the absentee ballots in Florida. If Bush wins, Republican voters had better batten down the hatches. What Eisenhower enjoyed for just one term -- a Republican House and Senate -- Bush will lose on the day that Senator Thurmond loses his seniority.

I would appreciate it if you would forward this issue to two or three of your hardest-core friends. Obviously, soft- core types will not believe it and will not appreciate it. They may think you have gone off the deep end. But your hard-core friends will get the picture. They may even want to subscribe to REALITY CHECK, since it's free. They can do so by sending an e-mail to: ice@ballistic.com

-- (doesn't@matter.now), November 13, 2000

Answers

Scary Gary's baaaaaaaccccccck.

-- (its@here.now), November 13, 2000.

Gary North on the EC, stop-it you're killing me,,,,,,Bhahahahwhooohehehehahaha!

-- Doc Paulie (fannybubbles@usa.net), November 13, 2000.

The Electoral College was invented by state politicians who really did not expect the nation to adopt unofficially a two-party system. But from the day the Constitution was ratified, a two-party system appeared. It has survived except for transitional Presidential elections.

Perhaps the reason why the two-party system has been so strong is because the Electoral College forces parties to pick candidates that are relatively close to the political center.

-- (just@a.thought), November 13, 2000.

you may not like the messenger-but what a message!!

-- a-d (dogs@zianet.com), November 14, 2000.