POSTING #11

Some Thoughts on the US Presidential Election and on the Republican Convention

The weekend after the Republican Convention, our wives were at a dinner meeting of the University Women’s Club so the Guru and I decided to try Niagara-on-the-Lake’s newest restaurant, The Garrison House, just off Highway 55, south of the Old Town.

We had started with heirloom tomato soup (rich, creamy---superb!) and were looking forward to our entrees. The Guru had chosen the “Free range chicken and Cumbrae farms ham Pie with tavern chips” while I had selected “Ontario lamb shepherd’s pie with whipped Yukon gold potato, aged cheddar and local vegetable sauté”.

“What’s your theory about why Romney chose Ryan?”, I asked.

“Romney had no choice. It was a bad summer for him. If he had chosen a more moderate person, such as Portman or Palenty, the gap between him and Obama in electoral vote forecasts would have continued to widen. He knew that choosing Ryan would excite the base of the GOP and might win some support from independents.”

“But Ryan has baggage such as his budget that rewards the wealthy, his proposal to voucherize Medicare, and his extreme views on social issues. Do you think Romney saw this as a Hail Mary pass?”

“I think so, just as McCain saw the choice of Palin as a Hail Mary play. But I think there is more to it than that. I feel that Romney certainly hopes that Ryan will help him win the White House but if he loses in November---despite Paul---he has a backup plan that I call the Samson and Delilah Demolition Plan.”

“You are going to have to explain that Plan to me.”

“I think that deep down Romney is incensed at the GOP and what I call the Coalition of the Crazies that now runs it. I am sure he feels that if he could have run as a moderate Republican---as he did in Massachusetts in 2002 to win the governorship---he could have beaten Obama easily, given the severe economic problems that followed the 2007-2008 financial crisis. But to win the GOP primary he had to adopt extreme positions embraced by the Coalition of the Crazies---on taxes, deficits, debts, and a whole host of social/cultural issues--- positions that have made him unpopular with independents and other voters. He has continued to follow the dictates of the Coalition by, for example, choosing Ryan, and by endorsing and even repeating outright lies about Obama’s actions on Welfare and Medicare.”

“The lies have puzzled me” I cut in. “In the past candidates have kept their hands clean, letting surrogates spread lies like the allegations that McCain had fathered a black child in the 2000 GOP primary contest. Why would Romney and Ryan lie about things that can be fact-checked so easily?”

“Well”, the Guru responded, “Remember that the Coalition of the Crazies claimed that one of the reasons McCain lost to Obama in 2008 was because he wouldn’t lie about Obama’s birth and religion. So Romney has faithfully followed the dictates of the Crazies.”

“So, if I understand your analogy, you are saying that just as Delilah weakened Samson by cutting his hair, the Crazies have weakened Romney by forcing him into indefensible policy positions.”

“By god he’s got it! You are quick. And then what did Samson do? As soon as his hair had regrown he pulled down the temple killing his enemies, and (of course) himself. I believe that Romney’s thinks that if he is defeated even though he has done everything the Crazies demand, his failure will in effect demolish or at least weaken the Coalition of the Crazies. This will allow the adult Republicans to retake control of the Grand Old Party”

“And this sacrifice by Mitt”, I said, “will mean that future Republican candidates, perhaps even one of the Romney sons, will be able to run without having to subscribe to irrational and irresponsible policy positions.”

“Exactly! And it will mean that Washington will once again be able to work---that compromise won’t be a dirty word.”

“I think you make a good point, even though the Samson and Delilah analogy is a bit of a stretch but then as Aristotle said ‘All analogies break down at some point’.

“OK, perhaps I did stretch that analogy a bit. Let me try a bit of irony on you. Isn’t it ironic that it is the Greedoholics--- the people who like Romney belong to the 1%--- who have financed the Coalition of the Crazies? Romney is being defeated by the actions of some of the members of his own class. Now isn’t that a fine bit of irony?”

“It is indeed. By the way, is Romney a Greedoholic in your view?”

 “I think he is, even though some of his actions as Governor of Massachusetts, such as Romneycare, are laudable. But, look, he has never seen a tax exception or dodge that he didn’t like---if he were elected he would be the first Tax-Avoider-in-Chief. And some of his decisions at Bain Capital were similar to those taken by Greedoholics in the coal, oil, gas and other industries that have pushed their own financial interests without any regard for the impact on the economic and financial health of the nation, or its effect on workers or the environment.”

The server slid our entrees in front of us and we spent the next few minutes enjoying the delicious food.

When we had finished, I said--- a little hesitantly, “You have been talking about the possibility of an Obama landside but here we are at the end of August and the national polls of voter intentions are showing that the two men are virtually tied. Are you worried that there may not be a landslide, and that instead Romney may be able to defeat Obama?”

“If presidents were elected by the popular vote, I would be a little worried but since they are chosen by the Electoral College, I am not. Nate Silver’s forecasts of the Electoral College votes in the New York Times show Obama with a good lead after the GOP Convention---around 307 votes to Romney’s 230, with 270 needed to win. The numbers will bounce around a bit but I still think a landslide of 330 is possible for Obama.”

“So you don’t think the GOP Convention helped Romney?’ I asked.

“As I watched it I kept thinking of Tennessee Williams’ line spoken by Big Daddy in ‘Cat on a Hot Tin Roof’: ‘Didn't you notice a powerful and obnoxious odor of mendacity in this room?’.  That described the auditorium in Tampa perfectly. Everyone was lying. Take Paul Ryan’s speech. He looked like an altar boy but he lied like those priests that denied molesting children. And all those lies that he and Romney have been telling about Welfare, Medicare, Obama’s view of small business etc. are going to come back to haunt Romney.”

“And then there are Ryan’s lies about marathons. Unbelievable!”

“It is clear”, the Guru said, “that the Obama team will focus on those lies during the Democratic convention and in speeches and advertising leading up to the debates, suggesting that persons who will lie about these important programs cannot be trusted with the White House. And then when we get to the debates, Romney will have to deal not just with the lies but with questions about the release of his tax returns, with his actions at Bain, and with his and Ryan’s budgets. I suppose it is possible that he will be so glib that some voters will believe that these are not important but I wouldn’t bet on it. I think he is hoist on his own petard. You know, I use that expression often but I am not sure of its origin. Can the Professor help me?”

“Any time”, I said. "You know of course that Shakespeare used the expression in Hamlet. The word ‘petard’ comes from the French verb ‘peter’, which means to break wind, or in good Anglo-Saxon, to fart. A petard was a 16th century bomb, a metal casing stuffed with 4 or 5 pounds of black powder. It was used to blow up gates and walls when one was trying to get into a castle or other fortification. The person lighting the bomb could be killed if the fuse burned too quickly, or if there were a blowback from the explosion. In that case, the bomber would be ‘hoist on his own petard’. Does that help you?”

“It is always good to have a professor around! No, but getting back to the presidential race, I would still bet that Obama is going to win, and handily.”

We then ordered our desserts---we both chose the summer berry pudding, and an excellent choice it was! --- and coffee.

Over the coffee, we had a discussion on the future of employment in the US and Canada.

The Guru knew I had been writing something on employment and he asked me to give him an outline of what’s in my paper.

 “Everyone knows that the job market is changing with mind-blowing speed. Unskilled, semi-skilled and even skilled jobs are being killed by mechanical and digital technology and by competition from abroad. Young people can no longer expect to spend a career at ‘the steel company’, ‘the car company’, ‘the bank’ or ‘the telephone company’ earning a good income and retiring with a generous pension. And young people are responding. I know a fellow who is a pipefitter at a refinery but is also a registered massage therapist and the owner of a lawn sprinkler company that employs a couple of people.”

“Wise fellow”, the Guru smiled, “he has a few parachutes that should protect him against whatever changes the future will bring.”

“But at the higher end of the job market”, I continued, “Job opportunities are better, at least for the moment. We both have friends whose children with good degrees in engineering, business, mathematics, the sciences that are doing well, some working in places like Dubai, Frankfurt and Singapore.”

“Those distances make it hard to enjoy the grandkids!”

“And through it all, despite the great increases in productivity, nations are growing more slowly. One of the reasons is that the 1% is being allowed to keep more for itself, depriving the 99% of income that they could use to spend on goods and services. And also robbing the ‘public goods’, such as health, education, police and fire security, a healthy environment with clean air and water, public transportation, affordable accommodation and so on. In many ways, the situation is worse, at least in the US, than in 1958 when Galbraith published his ‘The Affluent Society’ in which he decried the growing private wealth and public squalor.”

The Guru nodded, “As we expect the coming generations to be more flexible and more enterprising, it seems to me that it is essential that society focus more on the public goods that provide them with a launching pad into life and into the world of work. In that connection, can I just say that I hate ‘gated communities’ because they say that some people get to live in safe havens while the rest are left to try to survive in the midst of lawlessness. How can you raise and teach kids when the streets aren’t safe? We shouldn’t need ‘gated communities’, the whole community should be safe. And we shouldn’t need bottled water, and soon, if air pollution keeps up, bottled oxygen.”

“I couldn’t have said it better myself!”

“But at the same time”, the guru continued, “It is essential that these public goods are delivered with more and more efficiency. I know we can find more efficient and effective ways of teaching our children, policing our streets, of protecting our environment and so on. Governments have to work with employees and their unions to find ways that we can do more with less.”

“I agree. In connection with teaching, I’ve been hearing good things about the Kahn Academy that Bill Gates is funding in a big way.”

After we had paid our bills and asked the server to congratulate the chef for the superb food, the Guru smiled, “I think, if we know what’s good for us, we better come back here soon with our wives.”

“The sooner the better”, I said.

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If you have any comments, please leave them below or drop me a line at johnpathunter@gmail.com. The next Icewine Guru posting will appear in the fullness of time. My other blog, The Letter from Virgil, (http://letterfromvirgil.blogspot.com/)  appears on a more regular basis.

POSTING #10

More Thoughts on the US Presidential Election

The summer drought of 2012 has been hard on Niagara’s vineyards, and this has meant much more irrigation than normal.

A few evenings ago the Guru asked if I could give him a hand connecting pipes and hoses and setting up a giant sprinkler that would shoot a fire-hose-like stream of water high into the air over his rows of grapes.

After we had adjusted the flow and direction of the water, we sat in lawn chairs, drank coffee and chatted until it was time to move the sprinkler.

I asked him if he had had any second thoughts about his prediction of a possible landslide for President Obama in November.

“You said there was a 35% chance of a landslide. By the way, a reader who had read my Posting #9 wrote in to ask whether you meant a landslide in the popular vote or in the Electoral College vote. I assumed you meant the latter but I should clarify that in my next Posting.”

“No, you’re right. I was talking about the Electoral College vote. In 2008 Obama had a huge landslide in the College with 365 votes, well above the 277 required to elect a president. He did that with only 52.9% of the popular vote. Now, I don’t think he will have a landslide of that dimension this year but I still think there is a good chance for, say, 330 Electoral College votes. By the way, I did some calculations this morning and I now feel the likelihood of a landslide has gone up from 35% to 50%.

“So you’ve upped it to 50%! “, I gasped. “I’m sure you know that Nate Silver of the New York Times is currently forecasting an Obama victory, but he thinks that he will win by only about 290 Electoral College votes.”

“Nate Silver is a bright guy but it is hard for his models to weigh the likely impact of several factors that will play out in the next three months, factors that I think are really important.”

“Which are?”

“The first is the release of Romney’s tax returns for the last 10 years. Perhaps the GOP is using a Brer Rabbit strategy---remember how the rabbit begged the fox not to throw him into the briar patch. Is it possible that the campaign is trying to distract the media and the public from more damaging matters with talk of tax returns when they know there is no ‘there’ there? I suppose it is possible but I think it is highly unlikely. It looks as though the tax returns must contain some explosive information. All of that leaves Romney in a classic ‘damned if he does and damned if he doesn’t’ situation. I think it is going to hurt him badly with independent and swing voters, whether he releases the tax returns or not.”

“And the second factor?”

“That’s Romney’s tax plan. The Tax Policy Center has pointed out in a scholarly and objective analysis that the tax plan clearly favours the wealthy. Obama’s people are already moving to use the main conclusions of the report in their TV advertising.”

“And, I suppose” I said, “that Romney’s support for the budget proposed by Paul Ryan is another one of your factors?”

“For sure! I think that after Labour Day, the White House will begin pointing out the dire consequences for middle class voters if Ryan’s budget were ever adopted, adopted primarily to allow for a further tax reduction for the 1%. That discussion about the impact on Medicare, Social Security, Medicaid and other popular programs will continue into the October debates.”

“Is there another factor?”

“There is, and I think it may be the most dangerous one for Romney. I sense there is a growing feeling that he somehow lacks the maturity and personal morality to be an effective president. For my part, I feel he often acts like a young man meeting his girlfriend’s parents for the first time, trying awfully hard not to put a foot wrong but then blurting out inanities. Think of his disastrous visits to England, Israel and Poland. And then there is the bullying side of him. Romney has not denied the story that in prep school he shaved the head of an alleged gay student (he said he couldn’t remember the incident). We saw firsthand this bullying during the primary contest as he bludgeoned Rick Perry (‘I’ll bet you $10,000’), Newt Gingrich and Rick Santorum with his caustic comments during the debates and his flood of negative ads.”

I handed the Guru a fresh cup of coffee and said, “But in addition to his immaturity, you are also questioning his personal morality.”

“I am. Years ago when I was a CEO, a junior executive came to me and said he was having trouble making a choice among job candidates, all of whom surpassed the requirements for the position. I told him to ask himself this question: ‘Which one would you pick to go with you on a month-long trip into the North?’ He looked at me as though I had lost my marbles. I explained that asking that question gets at some critical, but non-quantifiable factors. For example, which one would best share the burden of portaging? Which one would be savvy enough to avoid stepping on snakes? And, most importantly, which one would still be there when you woke up in the morning---and which one might have taken off, leaving you in the wilds without a canoe or supplies? He came back later to tell me that my question had made the choice an easy one.”

“So”, I said, “you think that if American voters ask themselves that question they might prefer Obama over Romney for that trip into the North (or the mountains, the everglades the desert, or wherever the American regional equivalent might be)? That they might conclude that Obama would still be there in the morning but that Romney might not be?”

“Yes. There is a lot of hooey talked about people favouring a candidate with whom they would like to have a beer. I believe that as the election nears, more and more voters are going to be asking themselves, perhaps unconsciously, which of the two men they can really trust, which man has their best interests at heart.”

“In the end”, I asked, “those are the factors that make you think there may be a landslide?”

“Yes. And keeping to the same metaphor, I think that if a landslide appears to be taking shape we can expect an avalanche of money from the greedoholics. They will do everything they can to prevent Obama’s re-election because they know that the next four years will be much better economically for the US, the deficit and debt problems will be on their way to resolution, the health care plan will be in effect and people will see---as they did in Massachusetts---that it is a good program.  All of that sets the stage for an 8 year Hillary Clinton presidency starting in 2016. The greedoholics are going to be telling themselves that they have to stop the Democrats this year or they can expect to be out of the White House until 2024.”

“So”, I said, you think the greedoholics will be doing whatever they can to prevent the US moving into Herring’s Innovation phase that you talked about the last time we met?” [Editor's note: scroll down to Posting #9 for more information on Pendleton Herring's theory of Innovation and Conservatism.]

“Yes, they will be like King Canute, in reverse, sweeping madly to prevent the tide of Conservatism--- which has benefited the wealthy enormously---from ebbing away. The Conservatism phase has, of course, to give way. Income inequality has grown to such an extent that the middle class no longer has the money needed to buy the goods and services that will fuel economic growth. Remember that Henry Ford broke all the labour management rules of his time by paying his workers an unheard of $5 dollars a day, not because he was a philanthropist but because he wanted his workers to be able to afford to buy one of his Model T’s. Henry Ford’s son, Henry Ford II, seems to have lacked his father’s wisdom. He is supposed to have said to the union leader Walter Reuther that someday Ford’s auto workers would all be replaced by robots and then Ford wouldn’t have any problems with unions. Reuther replied, ‘And who will buy your cars, Henry’”?

All of which means”, I said, “that the attempts to limit the vote will continue, and that the smear campaigns against Obama will become more venomous than ever.”

“Yes, there is so much at stake for the greedoholics that this campaign will be the most vicious the US has ever seen.”

“But even if Obama wins---in a landslide or not---it looks as though the GOP will continue to control the House of Representatives and may well have a majority in the Senate. How will Obama cope with a hostile Congress?”

“If he wins with a solid majority, Obama will have a mandate to govern. The American people are fed up with Washington’s bickering. Obama will not have to worry about re-election and will be able to make full use of the considerable executive powers of the presidency. And, I think the GOP will go through an intense period of internal acrimony, anger and finger-pointing about how they could have lost the presidency. Think about it:

• The economy was in the worst shape since the Great Depression with high deficits, debt, and unemployment.
• The President was unpopular among a portion of voters, particularly in the South, because he was bi-racial, and because the right-wing media had convinced them that he had not been born in the US, and was probably a Muslim.
• The President had introduced a major health care reform that had been misportrayed---successfully---by the right-wing media and the GOP as dangerous.
• The GOP had control of the House, and could and did hamstring the President’s attempts to boost the economy through, for example, an infrastructure program.
• The GOP had selected a candidate who was a very successful businessman, with an attractive family.
How, given all these ‘advantages’, had the GOP lost the presidential election? There’s going to be a nasty period of angry recrimination with the Ann Coulters, the Rush Limbaughs, the evangelicals, the Tea Partiers, the Sarah Palins etc. attacking each other.”

 “I remember, Guru, when you and I talked some months ago you argued that Obama had two goals for the campaign, one stated and one unstated. The stated one was, of course, to win re-election, while the unstated one was to help the adults in the GOP take back their party so that it could once again participate fully in governing the US.”

“That’s right. It will not be easy for the GOP to reign in their billionaire greedoholics, the people who are funding the extremist fringes in the Party. But that is the key to the re-emergence of an adult GOP that can mount a credible campaign in 2016. If the GOP can’t find a way to do that, the Party will likely be out of office until at least 2024 and perhaps beyond.”

“But”, I said, “let me play devil’s advocate. What if all the greedoholics’ money for negative ads works, and Romney wins in November?”

“I obviously don’t think that is going to happen, but if it did and Romney started to implement the Ryan austerity program, you will see Canadian companies, universities, research institutes and other organizations sending raiding teams to the US to ‘steal’ the best and brightest people. The Canadian Government would move to simplify and speed up immigration procedures for Americans---this would all be done quietly, of course, so as not to alienate Romney.”

“Perhaps”, I said, “we should have a discussion of the major initiatives Obama (assuming he wins re-election) should take in his second term”.

“Yes, let’s do that the next time we get together. I have lots of ideas and I am sure you do as well. But in the meantime I think the grapes have had a good drink. Let’s turn off the sprinkler”.

After we had done that, the Guru walked me back to my car, “We have got to have some rain soon---this irrigation is getting really expensive. Do you think you could do a Google search on ‘rain dances’? I can see you and me and our wives out in the middle of the vineyard dancing and chanting, at midnight under a full moon.”

I smiled and said I would check, but only if we could keep our clothes on.

He chuckled.

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If you have any comments, please leave them below or drop me a line at johnpathunter@gmail.com. The next Icewine Guru posting will appear in the fullness of time. My other blog, The Letter from Virgil, (http://letterfromvirgil.blogspot.com/)  appears on a more regular basis.

Guru #1

Introduction

For some time I have been writing a blog, "Letter from Virgil", that recounts stories collected over the years from family and work experiences.

I have decided that I would like to write a second blog, one that discusses current political, social and economic issues.

The two blogs will alternate, with Letter from Virgil one Sunday, the Icewine Guru the next.

Please give The Icewine Guru a try and let me know what you think.

What Is The Biggest Problem Confronting the United States?

The Guru and I were driving along a Niagara back road, flanked by vineyards, in his new Lexus Hybrid heading for a decadent treat---ice cream cones, two-scoops in sugar cones---at the popular Avondale Dairy Bar on Stewart Road. A sign proclaims," All our ice cream is made FRESH daily right here".

"Look at the weed killer that farmer is using", the Guru muttered pointing at rows of vines with long strips of brown grass below the green foliage.

"How are your experiments coming with an organic weed killer?", I asked.

"They're promising. I am till trying to find the right proportions of vinegar, salt and soap but I'm making progress. My mix kills grass and weeds above the ground but of course it doesn't' kill the roots, so I have to re-spray every few weeks."

He turned back to the road and I could tell from the way he grasped the steering wheel and the way his jaw was moving that he was upset about something.

Perhaps I should introduce us. The Guru took 'Business' (as it used to be known) at the University of Toronto, and after graduation studied successfully to become a Charter Accountant. He was hired by an international firm of accountants and gradually moved away from accounting to business management consulting. After a few years he set up his own firm specializing in interpreting future trends for large businesses and wealthy investors. He is semi-retired but is still picked up regularly by corporate jets at our local airport and whistled off to points in the US and overseas.

I took History and English at the University of Western Ontario, an MA in History at McGill, and then a DPhl at Oxford. (Oxford doesn't use the term PhD for its doctorate degrees). I taught social history (European and North American) as a professor at the University of Toronto for 35 years. I have written several books and too many articles to count for learned journals. Since retirement, I have been working on a history of prohibition in Ontario and its impact on the culture and politics of the province.

The Guru and I met after we both settled---with our wives---in Niagara-on-the-Lake a few years ago.  We became friends, and our wives did as well.

My role in this blog could be seen as my playing Boswell to the Guru's Dr. Johnson but that would be wrong. I will try to record our conversations but I won't be a fawning admirer like that pathetic Boswell. I have my own personality and views.

At the Dairy Bar, we made our choices from flavours such as Moose Tracks and Death by Caffeine (our choices were more sedate---chocolate for him and mango for me). The clerk put the cones on a scale to weigh them (70 cents an ounce---and worth every penny). We decided to eat at a table inside the Dairy Bar because it was so hot outside that the cones would have dripped all over.

It was mid-afternoon and we had the room to ourselves except for a mother and her little boy of 3 or 4 who had a huge cone of bubblegum ice cream that he was enjoying mightily. We took a table in the corner so we could talk.

Even with a cone in his hand the Guru looked preoccupied. I asked him if he was worried about something.

He bit off some ice cream---he's a biter and I'm a licker---and said, "It's my semi-annual newsletter on the US. I can't figure out how to end it."

In addition to jetting off to advise wealthy investors, and company chairmen and CEOs, the Guru writes a monthly newsletter on the medium-term investment situation for major countries. The newsletter, which has 'a ridiculously high subscription price' (his term, not mine) gives a blunt, no-nonsense assessment of the prospects for major countries.

"I'm really bothered by what is happening in the US but I don't know how hard to come down."

"Is it the deficit, debt and downgrade problem?"

"No, the US is a wealthy country and the deficit and debt problems could be easily resolved. The greedoholics are preventing a solution---for their own purposes."

"Greedoholics?"

"That's what I call the billionaires and special interest groups who are so hooked on greed that they have lost all sight of what is good for the country---if they ever had it. And they have also lost sight of what is in their own self-interest as capitalists, but they are too hooked on greed to see that."

"But you go on and on about the wonderful benefits of greed."

"Sure, I love capitalism and therefore I love greed. It produces innovation that makes us all richer. But you can have too much greed. It is like salt in cheese-making. If you don't have enough salt, the milk will just sour and go bad, but if you have too much salt, it will kill the bacteria and enzymes you need to produce the cheese."

"So, you're saying that there are greedoholics in the US who are making improper use of the debt and deficit issue?'

"Sure, they are using the issue to argue for cuts in social programs but they are refusing to accept any change in their tax rates or their tax loopholes. Trying to solve a debt and deficit problem without using both spending cuts and revenue increases is as dumb as trying to cut fabric with scissors that have only one cutting blade."

"So if you aren't worried about the deficit and debt, what are you worried about?"

"Look, I agree that the deficit and debt situation are out of whack and have to be fixed. What worries me is that the US will fix them in a way that makes their biggest problem even worse than it is now."

"OK, I'll bite. What's the really big problem?"

"The Income Gap. The gap between the super rich and the rest of the population is greater than at any time since 1928. That's what politicians should be worrying about. To paraphrase Bill Clinton: 'It's the income gap, stupid!'.

"I've seen a few articles about the income gap and the statistics are really horrendous." 

"A society can't live with that kind of disparity for long without the poor---and the middle class---rebelling. Sometimes violently. "

"Surely", I said, "you can't attribute all of the income gap to tax and other legislation that gives preference to the wealthy. Changes in the way the economy works---for example, a move away from manufacturing---have worsened the income gap, haven't they?" 

"That's right, but I would argue that those changes were allowed to happen without adequate measures to cushion the blow to the poor and middle class."

We stopped talking while we watched the mother try to console her child whose ice cream had fallen on the floor. What a voice the little kid had! A kind clerk finally got him some more bubblegum ice cream, and peace was restored.

"So", I said to the Guru, "you are worrying that sometime in the next 5 years or so, there is  a real risk of social unrest or even rioting in the US, and that your subscribers should take that into account when considering what to do about investments they now have in America or about possible future investments?"

"That's it."

"What about the riots in the United Kingdom? Do you think they are being caused by the income gap in Britain, which although considerable is but not as great as in the US?"

"You have to be careful in assigning causes. Everyone's digestive tract has noxious bacteria, that are controlled by good bacteria---so long as the body is generally healthy. In the same way every society has hooligans and anarchists who are kept in control so long as the body politic is healthy. Prime Minister Cameron decided that he would be heroic and correct the UK's deficit and debt problem not by gradual measures but by a shock and awe program of huge layoffs, and deep cuts in social payments and services. Those measures by themselves were sure to put the society under great stress but he then made matters worse by deciding to reduce the police by 19,000 bodies! That was really dumb---attacking the morale and capacity of the very people you need to fight the hooligans and anarchists!"

"OK", I said, "I agree that Cameron was dumb, but can I put on my historian's hat and try to give the income gap some historical perspective?"

"Sure."

"Isn't there a good chance that the US and other governments will take steps that will reduce the income gap before there is serious social trouble. I'm thinking of Britain in the 1840's. Remember that Marx as he wrote Das Kapital in the Reading Room of the British Museum was convinced that the proletarian revolution that he was predicting was inevitable in capitalistic countries, would happen first in Britain because of the enormous income gap at that time. But Parliament brought in legislation that improved the lot of the poor. Like passing a law that banned factory and mine owners from working women and children for more than 63 hours a week. By the way, the owners fought it hard but lost."

"See, those guys were 19th century greedoholics!"

"So why can't that kind of change happen in the US?"

"It could. The pendulum has been swinging to the wealthy since even before Reagan and it could start to swing back. The democratic political process has generally been pretty good at bringing about that return swing in the pendulum without a lot of social unrest and violence. But what is really troubling me is that in the US the greedoholics have been making changes in the way key institutions operate, changes that can may prevent the pendulum from swinging back."

"For example?"

"There are so many. But start with legislation to limit the power of unions, the natural counter-balance to the greedoholics. And then look at the financing of election campaigns. The Supreme Court has made it much easier for the greedoholics to 'buy' politicians, and destroy ones they can't buy with negative campaigns. And then think about the growing power of right wing media that distorts the facts. And fat cat lobbyists. But what worries me even more is the way the greedoholics have been able to 'capture' people who are suffering, and turn them around so that instead of supporting policies that would improve their lot, they actually support policies that make the rich even richer ."

"I agree. John Edwards had a lot of trouble keeping his zipper up but he was right that the poor and middle class were voting against their own self interests."

"Just take the Tea Party", the Guru carried on. "The greedoholics have been able to prey on the insecurities of worried people and convince them that what is wrong is not that the rich have too large a share of the nation's wealth but that it is 'godless socialism', 'gay rights', 'a president with a different skin colour', 'Sharia Law'---or whatever. They have a long list of issues that they can use to push the buttons of frightened people,  But, you know---and here I may be arguing against my own thesis---I sometimes think the greedoholics may have gone too far and created a kind of Sorcerer's Apprentice situation."

"Sorcerer's Apprentice?"

"Yes, surely somewhere in your liberal arts education you must have learned about the Sorcerer's Apprentice!"

The Guru, as I've said, is noted for his bluntness, a quality his clients admire, but when he is worried he can be downright rude. Often I ignore the rudeness, knowing that it is a reflection of things that are bothering him. Other times, I let him have it---in kind.

"No, I was just trying to figure out what version of the Sorcerer's Apprentice you were referring to: Goethe's poem of 1797, or Paul Dukas's orchestral composition of 1897, or whether with your accounting background you were more likely referring to the Walt Disney versions: Fantasia in 1940 or its sequel Fantasia 2000, released in 1999."

Silence, while the Guru studied my face.

Finally, "You're right that was stupid, and ignorant. I'm sorry."

"That's OK, I know you are under pressure. But let's talk about how the Tea Party resembles the Sorcerer's Apprentice. The Apprentice was told by the Sorcerer to get some water from the well while he was away. The Apprentice used the spell he had overheard the Sorcerer using to get a broom to carry pails of water from the well to the house. But he couldn't turn the spell off, and when he split the broom with an axe, both parts starting carrying water, and the more he attacked the brooms with the axe, the worse things got."

"Well", the Guru said, "the greedoholics hired organizers, poured in money and convinced worried people that the answer to all the nation's problem was to starve Washington. The 'spell' was wildly successful and the Tea Party took effective control of the House of Representatives in 2010. But the greedoholics can't turn them off. The Tea Party has become an embarrassment to the adult part of the Republic Party." 

"I like the analogy. Are you going to use it in your US newsletter?

"Probably."

"I've been thinking about your greedoholics. You aren't saying, of course, that all wealthy people are greedoholics?"

"No, certainly not. Take Warren Buffett. He has a good bit of greed about him but you wouldn't see him upgrading his yacht (if he had one) because it has just one heliport and he needs 'his and her' helicopters, like the hedge fund manager he plays golf with. I think Buffett is sincere when he complains about a tax system that means his secretary pays federal tax at a higher effective rate than he does. He's a Democrat but there are wealthy Republics who aren't greedoholics---some of them are my clients---who understand that the income gap is dangerous, but they are afraid to stand up to the greedoholics. It's sad---they know that an income gap this huge is bad for the country and bad for capitalism."

"So why are you bothered by what you should recommend in your US newsletter? Are you like your Republican clients---afraid to tell the truth?'

"Ouch! That hurts. But you're right. I have to tell them about the dangers I see. Perhaps it will encourage some of them to fight back against the greedoholics."

We gave our faces a good scrub with napkins so our cholesterol-conscious wives wouldn't know that we had sinned.

And walked back to the car.

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If you have any comments, please leave them below or drop me a line at johnpathunter@gmail.com. The next Icewine Guru posting will appear on August 28th. The next Letter from Virgil posting will appear on August 21st.