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 yesterday… but only slightly. That makes it the seventh straight day of losses for the index, the worst losing streak in over a year [more in today’s Market Insight].

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?


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.




Editor’s Note: In the French countryside, some of Bill’s family has come for a visit. Today, he shares a few pictures with dear readers…


Bill’s family plays croquet at Poitou


Bill’s nephew tries to jumpstart a French car in reverse, uphill


By Joe Withrow, Head of Research, Bonner & Partners

The primary trend for stocks appears to be down…

That’s the story today, as we chart the Dow Jones Industrial Average from January to today.


As you can see, the Dow has fallen 8% from its all-time high of 26,616, set back in January of this year. And after a small summer rally, the Dow has now fallen for seven days in a row – its longest losing streak in over a year.

While nobody can say for sure why stocks go up or down, trade tensions between the U.S. and key trading partners, like China and the European Union, seem to be a major factor in the Dow’s fall from grace.

– Joe Withrow


The Endangered Affordable Home
Buying a home in America is getting harder and harder. New data suggests that the affordability of the average American home is at its lowest level in a decade.

Tech Talent Ditches Facebook
Social media giant Facebook used to be a magnet for the best and brightest. But in the wake of Facebook’s very public data breach, new tech talent is falling out of love with the Silicon Valley titan…

It may seem unbelievable. But Jeff Brown, Bill’s top technology analyst, believes that e-commerce company Amazon is preparing to launch its very own cryptocurrency. Skeptical? See the proof right here.


In the mailbag, talk of Trump… Ike… and “American Barbarians“…

I enjoy your commentaries. I have written my praises before. You have studied history well and are a gifted writer. You have opened my eyes to what I never saw. I was a hopeless romantic that saw our country as a beacon of liberty and freedoms known nowhere else in the world. I was proud to serve my country in the Navy, as did both my father and mother.

Now, I know that it was all an illusion. Maybe World War II was the last battle between good and evil for our country. But even Roosevelt had to trick the American people to go to war. I have a feeling that Vietnam thinks it fought the last battle against evil when it defeated the USA. Now, I have no hope for anything concerning our country. For the first time in my life, I did not vote in the presidential election.

– Tom K.

I am a skeptic by nature. When I am told things are going good, I tend to look for cracks in the façade. Thanks to Bill for raising the Ike story back to the prominence it deserves. For many years, people have taken me for being liberal because I believe that the government’s police powers should be used to protect our citizens from harms caused by or resulting from unfettered profiteering at the expense of all of us. I have said, “No, I’m not liberal. I’m just sane.”

My favorite president in my lifetime was Ike – for telling it like it was, and for looking ahead and articulating his forward-thinking vision. Alas, I was only 6 years old when Ike left office. At that time, we had two political parties that, more often than not, worked to achieve some semblance of balance, not polarity.

I don’t always agree with your predictions, but your reasoning over the topic of great leaders aligns with my sentiment as I ease toward my mid-sixties. Where will we find another temperate, even-minded person to assume the helm? Are we destined for years of disaster in leadership and chaos as a result of a vocal minority succumbing to rank showmanship? I wonder.

– Marshall T.

Your words seem to be right on. One thing: Trump is nowhere near as shrewd as Hitler, but he seems to be nevertheless wanting to institute something like Nazism in this country – with Latino immigrants taking the place of Jews. Concentration camps for kids seems to be the latest manifestation. Even Hitler didn’t separate mothers from their young children in his camps. If the Republicans don’t scrap that man, he could well destroy what freedoms we still have – and make the rest of the world into enemies of America.

– Chuck B.

You are not a patriot. Even if you don’t like President Trump, you should like what is going on in our nation. You are jealous, and it sounds like you want our country to fail.

– Vickie H.

Your Diary today about the person that spoke with you at the party was excellent! I hate to admit it, but I hadn’t thought of that viewpoint (which is one of the many reasons I have a small appraisal business!).

– Frank M.

I like that you’re contrarian… You, of all people, should know that all the administration models we have are inherently corrupt! The trick is that the elected should be doing all they can to mitigate the corruption. The problem is that when the “elected” get to the “trough,” they become corrupted by mere association – end of story. This is how it has always been and always will be. The only (partial) solution is uprising, but this only lasts for a few years!

– Ian S.

There must have been significant swilling at the birthday party you wrote about. What his majesty, “The Donald,” is doing does not bear up to the analogy of breaking the furniture. Yes, the elite are only serving themselves. Rather than the destruction of the whole, the better analogy is that Donald is selling the country out to China, and perhaps the Russians, for his own profit – hence the calling of debt.

If there is an analogy in history, it is that Donald, for a few trademarks for Ivanka, is selling the country in a deal which is just as “bad” as the one France made in selling the Louisiana Purchase, or that the Russians made for Alaska. The best way to fix this is for the people to vote their interest in a system that could still work better than a takeover by the barbarians, who at this moment [see the Trump family, Secretary Pruitt, Secretary Ross, etc.], are no improvement on the elite.

– Bill S.

Meanwhile, dear readers consider whether Bill is a “cowardly, leftist moron.

Bill is a cowardly, leftist moron? I’m about to complete my 64th revolution around the sun on this orb, and have interacted with plenty of cowardly, leftist morons and clueless, right-wing morons. Bill is neither.

– Jeff D.

There’s much to be said for the bravery-behind-a-keyboard syndrome in our time, and that reader had it. With so many ways to make a point and disagree, checking one’s temperature before firing off an email would seem most appropriate. We’ve all done it. None better, however, than the minstrels on cable news every night. Dios mío, as they say in Puerto Rico!

– Michael C.

I am 78, and appear to be – and feel – quite lucid most of the time! However, after reading and rereading the feedback regarding your column, I think “lucidity of thought” is a lost art. Why is it that there are always humans who “just know” that their “take” is absolutely correct, whether they be from the right, left, middle, or off the grid of any of the usual suspicious platforms of thought?

Darwin would have a field day with this group of homo sapiens! Unfortunately, these humans are at war with each other in Washington, D.C. and the state governments of our country. They permeate and populate every warren, big and small.

– Sheila S.


The economy is growing, and stocks remain near all-time highs. But behind the scenes, something strange is happening…

The U.S. government and global financial elites are considering implementing a radical new change to America’s money. If passed, the money in your bank account would fall firmly under government control.

They call it “The Chicago Plan.”