‘Cynicism is an attitude characterized by a general distrust of the motives of others. A cynic may have a general lack of faith or hope in people motivated by ambition, desire, greed, gratification, materialism, goals, and opinions that a cynic perceives as vain, unobtainable, or ultimately meaningless.’
Wikipedia
Today, we add a word to the English vocabulary… and provide a step up for everyone trying to understand public policies.
Cynicism questions the motives of others. Our new word, ‘cynicalism,’ is a way to avoid being harmed by them.
In public life, people claim to improve the world. “Do this,” some say. “Do that,” say others. Cynicalism tells us what is really going on: whatever they are proposing won’t work… and the people suggesting it are frauds.
Last week, we got the latest inflation report. New York Post:
‘Inflation rose more than expected last month — dimming hopes for another big rate cut from Fed
‘The Consumer Price Index rose 2.4% versus a year ago in September — above the 2.3% increase economists had expected, the Labor Department said on Thursday.
‘Month-over-month, the CPI rose 0.2% — steeper than the 0.1% increase economists had expected but even with the 0.2% number from August.
‘“Core” inflation — a metric closely watched by economists that excludes the volatile costs of food and energy, rose 3.3% versus a year ago, also ahead of economists’ prediction for a 3.2% year-over-year increase.’
The Fed promised to boost the economy with low rates. But it kept rates far too low for far too long. GDP growth slowed. And now, the Fed can’t increase rates to fight inflation; there’s too much debt. Higher rates would cause the economy to cave in. It’s ‘inflate or die’. The Fed’s only choice is to inflate…so as to lower the real value of the debt.
What should you do about it?
“Whatever they tell you to do,” a French friend quoted his father, an early cynicalist, “do the opposite.”
In the father’s case, he was mayor of a small town in France in 1944. A German soldier had been shot nearby. The German officer told him to have all the people of the town assemble in the town square in the morning.
‘It was a death sentence’, our friend explained. ‘There were going to be reprisals. Maybe ten citizens would be killed. Maybe all of them. So, my father spread the word… and they all went and hid in the woods.’
Cynicalism can protect you in many different circumstances. For instance, a stockbroker tells you he has found the ‘next Nvidia’. Cynicism makes you wonder why he doesn’t keep it to himself. Cynicalism tells you to ‘just say no’.
But cynicalism is particularly valuable for evaluating public policies and their effects on your wealth. As Ronald Reagan used to say, the most dangerous phrase in the English language was: ‘I’m from the government and I’m here to help’. Cynicalism tells you that whatever he’s promoting will be a scam and a failure.
Most issues don’t matter very much. But two of them matter a lot — war and money. That’s why the Constitution puts them in a special category — insisting that peoples’ representatives in Congress take charge.
And in both cases, Congress has not only dropped the ball, but shredded it. We are now engaged in two major wars… supplying material and intel. Most people are opposed to both of them; they’d rather see the money spent on hurricane relief.
But where’s Congress? Where was the discussion over how we would pay for the war? What are we fighting for? And is it worth it?
Didn’t happen. Congress ducked.
And how about the budget? It is obvious to even the biggest dimhead in Washington that you can’t continue to borrow, print and spend as much as you want… not without consequences.
‘The wars will make us safer’, say the feds. ‘And the lower rates will make us richer’.
Cynicalism tells us not to believe them.
Regards,
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Bill Bonner,
For Fat Tail Daily
