Editor’s note: While Bill Bonner’s commentary spotlights the American political circus, British readers shouldn’t dismiss this as a distant spectacle. The underlying lesson—that concentrated political power inevitably seeps into every corner of life, from trade to culture—has sharp echoes on this side of the Atlantic.
As the Bank of England exerts increasing influence over fiscal policy, and as the political class meddles in everything from energy bills to education, we’d do well to ask the same question: who’s really running the country? And at what cost?
Whether it’s Washington or Westminster, the more the state claims to manage, the less wealth, choice, and freedom the rest of us have. Consider this your early warning.
‘Any contingency you want, we’ve got it.’
–Pete Hegseth, US Secretary of Defense
Hegseth was talking about how to turn a non-problem into a problem. And how to run the world.
Greenland has been a non-problem for as long as the US has existed. And a friendly non-problem at that. Associated Press is on the story:
Hegseth says the Pentagon has contingency plans to invade if necessary
Defense Secretary Pete Hegseth appeared to acknowledge that the Pentagon has developed plans to take over Greenland and Panama by force if necessary.
Donald Trump claims to ‘run the country…and the world.’ Nowhere in the Constitution is there such a job description. America was supposed to be a country of individuals who would run their own lives…enjoying life, liberty and the pursuit of happiness, unimpeded by the feds.
The president was supposed to execute the laws of the land as laid out in the Constitution and elaborated by Congress and the courts. His main role was to protect The People from their government. In other words, he wasn’t meant to run the country at all; it was supposed to run him…he is its top ‘public servant.’ As for the world, it can take care of itself.
But heck…it’s 2025. And politics are on the rise. Military force is the ultimate expression of politics. Hegseth is ready to invade any country, city, or Home Depot you want.
At any given time, a society only produces so much wealth. It can then consume it. Or, it can save and invest…so as to produce more in the future. The real ‘political’ question is: who decides?
As a general rule, the feds waste wealth. And the more of it that is under their control, the poorer the society becomes.
Compare North Korea to South Korea. Same land. Same climate. Same people. The difference is politics. When the two separated, the North was richer than the South, because it had more industry. Even as late as 1970, per capita GDP in the North was over $350. In the South it was barely $250.
But today, North Korean GDP/capita is up to $640…while in South Korea, it is more than $35,000. That’s the malign power of politics. The North has a lot of it. The South, not so much. North Korea has a military parade almost every year. The South rarely does.
It doesn’t matter what you call it. Let your politicians run your economy, as they do in North Korea, and you will get poverty and misery.
In the 1930s, for example, Germany’s Big Man seemed to light a fire under the economy. Factories boomed. Unemployment disappeared. Foreign visitors were impressed.
But the Big Man favored politics…with tanks and planes coming off the assembly lines, not tractors or autos. Then, with so much of the country’s output devoted to armaments, ordinary Germans grew poorer and poorer until the end of WWII. Young women were on such tight rations, health officials worried that they might not be able to conceive.
And now, in the USA,… the Big Man gains power. US companies used to negotiate their own trade deals. Now, the Trump Team decides with whom you will truck and on what terms.
New York Times:
President Trump has announced wave after wave of tariffs since taking office in January, part of a sweeping effort that he has argued would secure better trade terms with other countries. “It’s called negotiation,” he recently said.
POTUS thinks he should also decide how much interest you pay, too. USA Today:
President Donald Trump cited new inflation data in continuing to pressure Federal Reserve Chair Jerome Powell to lower interest rates, calling him a “numbskull” but adding that he won’t seek to remove him.
“We can’t get this guy to do it,” Trump said of Powell lowering rates. “And the fake news is saying ‘Oh if you fired him it would be so bad.’ I don’t know why it would be so bad, but I’m not going to fire him.”
Education used to be a private matter — between the student and his school. But now the politicians have invaded the study halls and the girl’s locker rooms. New York Times, again:
The dozen board members of the prestigious Fulbright program that promotes international educational exchanges resigned on Wednesday…
The members are concerned that political appointees at the State Department, which manages the program, are acting illegally by canceling the awarding of Fulbright scholarships to almost 200 American professors and researchers…
But the same phenomenon occurs in the entire economy. The feds use taxpayer money — and fake money! — to insinuate themselves into everything. Then, people come to rely on it so heavily, they have no choice but to go along with whatever the feds want. The New York Post:
The US will be flirting with a possible financial crisis if Congress fails to pass President Trump’s marquee One Big Beautiful Bill Act, Treasury Secretary Scott Bessent grimly warned Wednesday.
Bessent singled out the megabill’s extension of the 2017 Tax Cuts and Jobs Act and warned that a $4 trillion tax hike from a failure to re-up those cuts would devastate the financial system.
“Sir, I think it could set off a financial crisis, the likes of which we have not seen since ’08, ’09 [the last financial crisis caused by the feds]…”
And why leave high culture alone? MAGA has plenty of low culture — the president attends professional wraslin’ events…and Lee Greenwood performs at his rallies. (No one with any taste in music should ever be subjected to Lee Greenwood.) And now, he’s muscled into the Kennedy Center. USA Today:
The John F. Kennedy Center for the Performing Arts has been America’s premiere stage for decades. But more recently, the cultural center has been in the headlines not for art but rather, politics.President Donald Trump announced…a massive overhaul at the Kennedy Center that included the termination of multiple board of trustees members, including Chairman David Rubenstein. And Trump named Rubenstein’s replacement: himself.
Of course, it never made any sense for the taxpayers to be putting up with the Fed or the feds’ trade deals and deficits…or supporting the Kennedy Center…or NPR…or PBS…or Fulbright scholars…or Harvard or any other high-minded sinkhole of public funds. But instead of cutting them off, the Trump troupe just wants to take them over…and ‘run’ just about everything.
A macro forecast: the real economy will weaken. And the real value of America’s industries will continue to decline.
Regards,
Bill Bonner
Contributing Editor, Investor’s Daily
P.S. If this all sounds far-fetched—presidents playing economic czar, central banks punishing elected governments—don’t forget, we’ve seen the same script here in the UK. That’s why American Birthright isn’t just about the U.S. It’s about the growing global trend of political overreach and financial control. If you’re watching the Bank of England flex its muscles—or worrying about what comes next under a Reform or Labour government—you’ll find American Birthright disturbingly relevant. Learn more here.
