Biden the portfolio manager …


Alton Drew

Elected officials are constrained when it comes to their transparency as “portfolio managers.”  In a previous post I shared my insights into how taxpayers should treat the United States like a colony.  In the current American colony, the “mother country” is now made up of the individuals, corporations, and sovereign governments that own American debt: bonds, treasury bills, treasury notes, etc.  And when it comes to individuals, it is specifically those individuals who derive most or all of their income from the yields earned on the debt plus any equity they hold in public corporations; the “rentiers.” 

Public “portfolio managers” should be managing the American nation-state on behalf of American and foreign national rentiers.  And while America should not manage its resources for the benefit of sovereign nations that may be holding American treasury notes or American currency in their vaults, American “portfolio managers” should be mindful of the constraints on monetary and fiscal policy created by foreign ownership of dollar denominated debt and U.S. currency.

The incoming Biden administration has made no mention of this constraint.  Ironically his more poignant discussions on “Build Back Better” sound more like a rehash of the Trump administration’s “Make America Great Again” mantra with a twist of “diversity and inclusion” policy thrown in to appease voters in America’s ethnic minority class while promising to strengthen the manufacturing sector.

At the end of the day, “Build Back Better” is a strategic communications campaign aimed at the “end user” class; the group that sees government as “doer and savior”; the entity that protects and takes care of us; that looks out for the little guy.  Mr Biden aims no explicit public remarks to the “mother country” class, the class I referred to before that trades on the rents they expect from the American economy.  Being transparent as to the needs of the “mother country” class would also provide the remaining 99% of us an education as to the reason why the United States, as well as the other 180-plus portfolios around the globe exist and who these portfolios are truly managed for.    

It is unfortunate that Mr Biden cannot be transparent about the needs of the “mother country” class.  In my opinion, this class has inherited the ability to create and act on a vision that spawned the political economy Americans live in today.  That vision is one where capital is allowed to seek out an opportunity vacuum and morph into the going concern necessary for bringing that opportunity to fruition.

Included in that vision is the need for skillful portfolio managers that design and implement policy actions that create a playing field for traders to compete with each other in the Game of Capital, with the objective being he who has the most coin at the end of the day wins.  And the “mother country” class has an interest in Mr Biden managing the portfolio well.

And there is always another candidate vying for the job….       

Treat America as a colony. Extract and profit as much as you can …

Opinion by Alton Drew

The typical American’s view toward the economy is what can this economy do for me; provide to me. There is this notion that social, cultural, or political allegiance to the economic system should be compensated with some guaranteed system of job or business opportunity. An economic system goes a long way in demonstrating its validity to taxpayers if it can provide jobs and an environment that supports trade, but relying on promises to “Make America great again” or “Build back better” is not wise or practical. You are setting yourself up for failure or mental and emotional depression.

Rather, it may be best to maintain a colonizer mentality. Yes, it is ideal that the governing authority of a jurisdiction have in place rules that facilitate and protect trade but that is not enough for any success. I find most political rhetoric on the economy is fluff and puffery and have observed that all substance in trade is generated from the “bottom” and on the “side.”

On the bottom is the extractor or producer, capturing and processing the resources necessary for creating goods and services. Coming in from the side are the traders who are constantly in search of information on consumer tastes, producer capacity, and opportunities for capital deployment. Also on the side is the capital, the holder of the “dry powder”, pooling resources with other holders of capital and weighing competing narratives provided by traders and merchants that describe the best investment opportunities.

Again, if government is doing its job, it is first and foremost ensuring optimal conversion of human, natural, and financial resources by implementing and enforcing rules that allow for accumulating and processing resources by traders and liberal movement of capital from investors. It is effective facilitation that gives elected officials fodder for validating and promoting the political economy.

The colonizer mentality tells us to keep an arm’s length between ourselves and the politician. I would argue they need us more than we need them. The politician cheerleads the economy but the producer, trader, and banker give the politician something to cheer about. While the politician’s rhetoric helps her hold sway over a voting public, the globalisation of capital and freedom to search for economic opportunity in alternative jurisdictions gives the producer/trader/banker some sway.

Both sides, the political and the commercial, need each other but the commercial side should avoid the populism and emotionalism that relegates most taxpayers to the “consumed” class, a class stuck in the downward spiral of selling time for pennies, where the failure to spend time on accumulating knowledge necessary for creating “currency” is creating, in my opinion, an increasingly devalued populace; one prone to the button-pushing of politicians.

Be non-emotional toward the political economy. America does not exist to nurture or cater to your emotions.