The Daily Reckoning PRESENTS: When people think of Thanksgiving, they think of Pilgrims and Indians, sitting down at the same table to give thanks…but in this DR Classique, first run on Thanksgiving Day, 1999, Bill Bonner gives us a lesson in the real history behind the holiday…
THANKSGIVINGby Bill Bonner
I turned to my trusty assistant…Beirne White…this morning.
"Beirne," I said gravely, "tell me about Thanksgiving in Mississippi."
Beirne proceeded to tell me about a Mississippi bluesman named "Son" House, who lived to be 102 by doing what bluesmen tended to do…chasing bad luck, bad liquor and bad women.
"What has that to do with Thanksgiving?"
"Nothing," he replied…whereupon he drew on the resources generously provided by Britannica.com, formerly of Chicago, lately of cyber space, to get me the research I requested.
Beirne hails from Mississippi. And while Mississippians will sit down with the rest of the nation…and tuck into their turkeys with equal relish…perhaps only substituting Bourbon Pecan pie for the sweet potato or pumpkin pie enjoyed in Maryland…it was not always so. Somewhere deep in the most primitive part of his medulla oblongata, the part of the brain where race memories are stored, Beirne resists Thanksgiving. It is, after all, a Yankee holiday.
Thanksgiving in France: Commemorating the Northern Victory
In the middle of the War Between the States, both sides would proclaim days of "thanksgiving," following the progress of the war as we now follow the progress of the stock market. After each of the first and second battles of Bull Run - which sent the Yankees fleeing back to Washington - the Confederates proclaimed days of thanksgiving. But it was Lincoln's day that stuck. Declared after the battle of Gettysburg - the last great Napoleonic charge of military history - Thanksgiving was set for the third Thursday in the month of November, commemorating the Northern victory.
Beirne doesn't say so…but this fact must stick in his craw. It doesn't help that the original celebration took place in Massachusetts. And that it was hosted by a dour bunch of Puritans, who probably wouldn't have been able to enjoy a good dinner if their lives depended on it. But they certainly had a lot to be thankful for.
As the Wall Street Journal reminds us annually, they nearly exterminated themselves in typical Yankee fashion - by wanting to boss each other around. They had arrived in Massachusetts by accident and bad seamanship, intending to settle in the more hospitable climate of Virginia, which had been colonized more than 10 years before. Once in Massachusetts, they proceeded to set up such a miserable community that surely most of them, had they lived, would have longed to return to England. The Soviets could have learned from their example and spared themselves 70 years of misery. Only after the "witch-burners and infant-damners" abandoned their communal form of organization, and allowed people to work for themselves, did the colony have a prayer of survival.
But victors write the history books. And now this precarious celebration by a feeble group of religious zealots has turned into the most American holiday. After Appomattox, the South was helpless. Its natural leaders, the plantation aristocrats, were either dead, bankrupted and/or discredited.
Many of them went to Northern cities, like New York or Baltimore, where, Mencken tells us, they "arrived with no baggage, save good manners and empty bellies." They enriched the North. But back home, they were sorely missed. "First the carpetbaggers," says Mencken, "ravaged the land…and then it fell into the hands of the native white trash…" Scars of war can take a long time to heal. But 130 years later, the South is the most economically and culturally robust part of the nation.
Thanksgiving in France: A Unified, National Myth
Thanksgiving was declared a national holiday in 1931. Through the Depression, and then WWII, Thanksgiving grew in importance. In a country where roots meant almost nothing, where people were ready to pick up and move at the drop of a hat, where there were huge differences in what people thought and how they lived, Thanksgiving served to provide a unified, national myth… most popularly expressed in Norman Rockwell's Thanksgiving cover for the Saturday Evening Post. Roots mean more in Mississippi than they do in California.
"No man is himself," said Oxford, Mississippi's most celebrated alcoholic, "he is the sum of his past." Unlike so many other American writers of the 20th century, Faulkner stayed home. The forward to the Encyclopedia of Southern Culture has a passage from Faulkner, saying: "Tell about the South. What's it like there. What do they do there? Why do they live there? Why do they live at all?"
Even in Faulkner's Mississippi…Thanksgiving is now part of everyone. Where Beirne goes…it goes too. And so, all over the world, Americans, gathering in small groups, like pilgrims on distant shores, celebrate the holiday (if not on the actual day…perhaps the weekend following…as we will do.) This can require a little ingenuity. Americans in France have to search for the ingredients. Pumpkins are hard to pronounce-citrouilles-and hard to find. Cranberry sauce is unknown.
But my mother discovered a store in Paris specializing in American groceries, named "the Real McCoy." She hastened thither yesterday, and brought back canned pumpkin, cranberry sauce and peanut butter. Thanks to this outpost of American culinary supplies, we will be able to have a very typical Thanksgiving dinner went we slide our chairs up to the table on Sunday. Art Buchwald has translated the Thanksgiving story for the French, deftly turning Captain Miles Standish into Le Capitaine Kilometre Deboutish. But no one has refashioned American Thanksgiving recipes for the metric measuring cups here in France. My wife, Elizabeth, descendant of the Puritan fathers…former resident of New York…a Yankee, in other words…and my mother - issuing from Southern Maryland tobacco farmers and the French bourgeoisie - will do their best.
And we will be thankful.
Regards,
Bill BonnerThe Daily Reckoning

Rumors haunt S.J. home
Stockton house a hot spot for reports of the paranormal
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By Christine Teldeschi
Record Staff Writer
October 31, 2008 6:00 AM

STOCKTON - No one lives in the 1925 craftsman-style home at 1002 N. Pershing Ave., but neighbors swear when the evening sun creeps over the tops of trees from Victory Park and hits the castle-like house just right, they see a little girl watching them from an upstairs window.
Rick Freeman, who is spending his retirement snatching and fixing up homes, admits his real estate agent reported the home was rumored to be haunted, but with a shrug and the quick scribble of his signature, the house became his.
ON THE WEB
For more on the Arnold investigation and photos, visit www.alienseekernews.com/
For more information on Haunted Paranormal Investigators International, visit www.hpiparanormal.net.
"We've heard (about the house being haunted) from a lot of people in the neighborhood," Freeman said. "The first thing is 'Oh, you bought the haunted house.' "
Freeman said from the time he bought it, and even more so now, he has been curious about the history of the notoriously spooky home. Freeman is fixing up the home to sell and said he has no plans to spend the night to find out if the rumors are true.
The three bedroom, one-and-a-half bath house has seen its share of short-term residents. The first owner lived there the longest, 14 years. The shortest only stayed four months.
Arthur and Janet Cline were the first inhabitants, moving in in 1927, two years after the home was built. Property records show the Clines lived in the house until the early 1940s.
Perhaps they are responsible for the letter "C" on the front of the exterior chimney. But the "S" in the stained glass windows of the home remains a mystery. Some people say it stands for Stockton.
With rumored histories and ghostly tales, the empty house has taken on a dramatic life of its own.
"Neighbors said people move in and stay for about six months or so, and then they move out," Freeman said. "Somebody told me that sometimes they drive by and see a little girl in one of the dormers. There's no upstairs. There's only an attic."
The castle-like home is well-known among Stockton real estate agents, mostly as a home with a seemingly revolving door.
As soon as Judy Swayze saw the home more than a decade ago, she knew instantly she wanted to buy it.
"We just really were drawn to the house, the architecture and the stained glass 'S' on the front-porch window," Swayze said. She and her husband Thomas moved in 1996.
"Every Halloween, we would have more than 125 kids coming to the house, mainly to ask if the house was haunted," Swayze said.
The Swayzes said their time in the home was peaceful and unremarkable except for one event Thomas Swayze witnessed and then kept secret from his wife for some time.
"There was one instance my husband had where he woke up and there was an old farmer man staring into the bedroom," Judy Swayze said. Thomas Swayze said he can still remember exactly what the man looked like: Thin build, plaid shirt and a 5-o'clock shadow.
"There was no ill feeling or harm from this old farmer," Judy Swayze said. She said her husband delayed in telling her because he didn't want to worry her.
"On several occasions we would get wisps of cigarette smoke in different areas of the house and cold breezes that would come and go," Judy Swayze said. The Swayze's would later move.
"I sold it twice over the years," said Don Nelson of Lela Nelson Realty. Regarding whether 1002 N. Pershing is haunted, Nelson said: "Well, it is."
Nelson, the brother-in-law of Lela Nelson, recalled a mystery when he showed the house one day that continues to perplex him. "It hadn't rained for weeks. ... And so I said, 'OK, we'll go and see the property.' We had no happenings inside (the home), ... but when we came out the porch was full of water. And there were no sprinklers on and no rain," he said. "People say they've gotten cold shutters and stuff when they go in there. That didn't happen to me, but that puddle was there for sure, and it was not the sprinklers."
There is no shortage of ghost stories in Stockton, especially since a few unmarked graveyards have been uncovered during various building projects.
Carmen Young said when she and her newborn moved in with her sister in the 2000 block of F St. in Stockton, she said she experienced something she will never forget.
"After everyone would be asleep, I would hear women talking, pots and pans banging," Young said. "It didn't scare me at the time because my sister's church made tamales weekly to sell for funds towards the church. The next day, before leaving for work, I made a comment to my sister about the noise being made by them in the middle of the night. She answered 'There was no one making tamales last night.'" Young said the nightly banging in the kitchen even woke up her baby and that she was afraid to look in the kitchen. Several incidents occurred, she recalled, such as an open can of paint mysteriously being placed under her as she climbed down a ladder, and resulted with her sticking her foot in it. And one time, after three days of rain, she said she went to the basement and saw that it had flooded. She asked her sister's husband to retrieve the boxed possessions the next day and it was dry. Nothing was damaged.
"I kept on telling my sister, 'This house is haunted,' and she would disregard it," Young said. "The last night I was there, I left running and screaming because I couldn't ignore it anymore."
An old boarding house in the first block of East Maple Street in Stockton made a lasting impression on one longtime resident. A well-known roof inspector in Stockton, who wishes to remain anonymous, said that when he was a teenager he spent a lot of time at a friend's house on Maple.
"We would hear running up and down the stairs and toilets flush," he said. "And no one else would be in the home besides my friend and I. There was a door that would not stay locked in an upstairs bedroom. One day, we decided to figure out what the heck is going on. So, we locked the door, hid the key and put a dresser up against the door. The next day, the door was open and the dresser was moved."
Dolores Crivello said she believes her daughter's home in the 1000 block of Longview Avenue is haunted because she said things happen that cannot be explained.
"The dog stares sometimes in this one spot and the dog barks; lights turn on; a picture falls. ... I see a lot of problems like that, and our TV. I believe in things like that, I do. The dog barks in the back (room), and I see nothing," Crivello said. "Dogs feel things like that, they do."
Crivello points to a back room that is lightly decorated and dim. She said that the dog sometimes will not go into the room but will growl and bark at what seems to be nothing. But Crivello said she feels a cold presence that perhaps cannot be seen with the human eye, but she believes something is lurking in the homes nooks and crannies.
"I tell her (her daughter), and she'll go, 'you're old. You're crazy.' I say 'Ok. Ok. You're not supposed to talk about (stuff) like that, you never know.' I told her 'you never know," Crivello said. She said she sees the happenings as a sign that there is someone else in the home, and they want to be made known. But, she does have faith that peace could return to the home that has much unrest. Although she said the paranormal activity seems harmless, it's better to be safe and bless the home than to be sorry.
She advises her daughter: "'You better come have somebody bless this house or something.' I'm gonna say, 'you better check your house girl... it's a ghost house.' Cause, you never know, you know?"
For some in the religious sector, ghosts and spirits are not trivial.
The Rev. Dean McFalls of St. Mary of the Assumption Church in Stockton said he has been called to several homes regarding ghost-like activity.
"I've had people say they've had their feet grabbed and pulled out of bed," McFalls said. He said those souls who hang around after death may need more prayer or forgiveness. Besides believing that there are things that cannot be explained, he also believes in the power of suggestion, saying the human mind is "potent." He has, however, had to take ghostly matters into his own hands and force an entity out from where it wasn't wanted, and sometimes, "some things happen," he said.
During an entity extraction, McFalls said he enters the room, turns off the lights and prays for the Holy Spirit to descend upon the house, and he asks Christ to protect and rid the discomfort. "I empty my mind," he said.
During one house call, McFalls said he could feel the presence of something or someone amble toward him and heard crying.
With more than 100 investigations under his belt, paranormal expert Paul Dale Roberts is confident he can tell whether a house is haunted. And 1002 N. Pershing Ave., he said, "definitely has something going on."
Roberts leads a group of ghost trackers from throughout the Valley called Haunted and Paranormal Investigators International. The team inspects homes by snapping pictures, using Electronic Voice Phenomena, taking video footage and attempting to communicate with the spirit. Roberts said the group takes a scientific as well as an open-minded approach to its investigations.
"I've met some people who are very, very normal and some people who are off the wall," Roberts said.
Arnold residents Amy and Vince Scotto had contacted celebrity psychic Nancy Bradley about a problem with a trio of ghosts: a boy named Timmy; Vince's ex-girlfriend; and a dark shadowy figure. Bradley passed the investigation on to Roberts, and he took The Record along for the paranormal investigation.
Arriving at the two-story home set in the woods on top of a steep hill, two car loads of investigators grab their equipment and get to work.
Devin Bruce, aka Leatherface, and Tony Gold joined the group of ghost hunters to document any paranormal events for their production company Off the Hook TV, based in Sacramento.
Roberts and his team said they made some findings in the home: the entity knocked several times on a wall when asked; a rocking chair moved on its own; orbs, spherical markings, appeared in scores of photos; blurry video camera images were recorded; and fully-charged electronic camera equipment shut off. Nothing too bloodcurdling for the experts.
The home didn't quite scare the beejeebers out of Gold, but a previous mission in Sonoma made the young producer fear for his life, and sent he and his crew fleeing out the front door.
"There was a voice during a recording that yelled 'Get out.' I ran like a (dog)," he said. "It was a trip."
"I believe there could be activity at this home, but plausible explanations need to be looked at further," Roberts writes of his investigation of the Arnold home. "Digital photographs display unusual orb activity and in one case a strange shadow configuration. ... Orb photographs cannot be deemed paranormal, unless some type of intelligent response by orb(s) can be obtained."
Photographs that have orbs in them widely have been accepted in the photography industry as light refractions, or backscatter. Some, however, believe they have paranormal connections or cannot be explained.
Photography professor Kirstyn Russell of Delta College said if the photo is taken in direct light, orbs can appear in photographs.
"There are so many things that can go wrong in photography,"
Russell said. And there are a lot of photography tricks that can be used as well, she said.
Boston photographer William H. Mumler was exposed as a hoaxer in the late 1800s after some of his "ghosts" were found alive and well.
But, digital cameras are more fool proof, she said, when it comes to orbs showing up in photos. But, are they ghosts?
"I'm not the most techie person," Russell said. "I have had an experience that I never figured out what happened."
Russell said that after her grandmother died, she decided to take photos to document her grandmother's home. In the same lighting and similar shots, six of 36 photos did not have orbs in them, an occurrence that mystified the photographer. The photos, she said, were taken within 24 hours of her grandmother's passing.
Ghosts and spirits are nothing to take lightly, McFalls said, and he advises that no one try to contact a ghost if they believe there is one in their home. "Mind your own business," McFalls said. "Never try to contact the dead."
Roberts has been to the Pershing Avenue home. And, on a recent tour, he reported a ghost moving from one room to another.
With a pair of metal rods guiding him, Roberts walked out to the garage and snapped a few pictures. He decided further study was warranted. Freeman said Roberts and his team are welcome to investigate the home again in December.
Century 21 Exchange agent Sharon Crawford said she's heard the ghost tales of 1002 N. Pershing Ave., and has avoided entering the home. But after being invited over for a friendly gathering, she didn't think it was so bad and was actually quite comfortable.
"Do I believe (in ghosts)? Hey, there could be anything," she said.
Although she has not seen a ghost, Crawford said some homes in Stockton just seem to give off a creepy vibe.
"I walked into a house one day and took three steps, and I was spooked," she said. "I couldn't get out of there fast enough. It was just a feeling. You can walk into a house and get a feeling or feel the karma of the house."
A few former owners of the home said it's not a haunting that made them leave, it's the frightening traffic of Pershing Avenue and the bone-chilling fear of too much repair work.
Kristyne Starling and her husband, Steve, bought the Pershing Avenue home in 2002.
"We loved the house," said Starling, who now lives in San Francisco. "I think a lot of people want to believe it's haunted. We never once had anything weird happen."
The Starlings said they moved to ease evil commutes and to get out of a frightfully bad home loan.
Though she and her husband only lived in the home for four months, Nadine Grinstead, 81, said ghosts didn't scare her away from the home in 1968. It was all the repair work that needed to be done.
Acknowledging "there are weird things that cannot be explained," Grinstead said she didn't think the Pershing Avenue home was haunted.
When John Demshar purchased the home in the 1980s, he heard tales of a ghost that would rearrange furniture and make things go bump in the night. Demshar said he doesn't believe the home is haunted by a ghost. "We asked it to join us for dinner and it never showed. We welcomed it but it didn't take us up on our offer."
Because of changes to federal home disclosure laws when he sold the home in the 1990s, Demshar had to list the home as rumored to be haunted.
Some agents in Stockton say such required property disclosures stop them from showing homes. Homes that are reported haunted keep Kim Currieri away. The real estate agent from Avenue Realty said houses with a stigma are harder to sell, and he is likely to not represent or buy a home for that reason. They also are considered a nuisance by neighbors, he said.
Crawford, the Century 21 agent, said she has had many clients who will not buy homes with certain numbers or that are facing a certain direction. Some homeowners will go as far as petitioning the city to change the number of the address of their home, she said.
The thing about ghosts is that there is a lack of what some scientists would classify as hard evidence that these entities in fact exist. Many juicy stories and freaky sightings are spread around faster than one can say 'boo,' but proof is difficult to come by.
One legend of the Pershing Avenue home is that a man, who built the home and helped build the Hotel Stockton as well, hung himself in a closet after his fiancée left him. However, the short closets in the home would seem to make the ghastly deed impossible, and a search through old newspapers, county and city property records of the home do not show support for this tale of unrequited love.
There are two dormers, or faux windows, outside the attic on the front of Freeman's investment home. A couple of Stockton realtors and passers-by say they have seen the ghostly figure of a child or woman peering out from the home. But, the dormers have glass on the outside and wooden shutters on the inside, making looking in or out of them difficult. The spacious attic is littered only with giant rat traps, insulation and an occasional spider web.
During a stretch of time when the Pershing home was vacant, a fire apparently broke out in the third bedroom caused by some homeless people who took residence there, according to former Pershing resident Dennis Nousaine. Minor damage from that fire still can be seen from inside the basement.
Nousaine, a physician now living in Jackson, also said that a story about a person being found dead in the basement of the home was created by the owner of the home at that time to keep children from playing in the vacant home so repairs could be made and the property could be sold - creepy basement and all.
Rumors of lights turning on and off could be chalked up to the homes old electrical wiring, and that 'weird feeling' some say they get from the home could be from the slant in the floor caused by the wonky foundation.
But what about Nousaine's account of some doors slamming in the middle of the night. Could it have been a Delta breeze?
"There's always been something going on (paranormally) in that house," Don Nelson said.
Freeman has agreed to allow Roberts to investigate the home Dec. 13 for another round of ghost seeking, much to the delight of Freeman's daughter, Bobbie Lawson.
"I'm excited," Lawson said. "I can't wait." Lawson said she believes the home is cursed, as strange, personal things have happened in her family since her father purchased the home.
But ghost tales aren't keeping residents away from the Pershing Avenue dwelling.
"We really liked the house," Swayze said. "In fact, about a year ago, it was back on the market. We were kicking around the idea of buying it again."
"It's a beautiful home," Nousaine said. "It deserves to be restored and lived in."
Nousaine said the busyness of the street was too much after the birth of his son, so the family decided to move to a more rural setting. "If I could pick up the house and move it into the hills, I would."
Undeterred by ghosts so far, Freeman said the home will be up for sale once he makes some needed repairs. Having the home inspected for spooks doesn't bother him. He said he's confident the home will sell and that people will respect the home for its fine craftsmanship.
"It'll be a nice house when it's finished," Freeman said. "Maybe I'll unearth something. I've been waiting to find something," he said.
Contact Christine Teldeschi at (209) 943-8573 or cteldeschi@recordnet.com.

The Daily Reckoning PRESENTS: Last week’s election was an event that will certainly go down in the history books. Everyone has their own take on what Obama’s triumph will mean for the United States...and yet, as Bill Bonner points out, most commentators are missing the point. Read on...
O! BAMA! THE WHOLE WORLD TURNS ITS WEARY EYES TO YOU...by Bill Bonner
Mr. Obama became the president-elect of all the Americans last week. No man’s coffee tasted better on Wednesday morning than it did on Tuesday...no woman’s perfume smelled sweeter. But all over the world, people felt better about themselves, as if the human race had achieved something important.
At least a McCain victory would have caused the press to hold its tongue. Instead, commentators drew all the wrong conclusions and made fools of themselves. Some thought it meant America’s redemption from the sin of slave trade. Others saw a historic transformation that they couldn’t put in words and shouldn’t have tried.
“They did it. They really did it,” wrote the Guardian . “...the American people yesterday stood in the eye of history and made an emphatic choice for change...”
It’s the “End of the National Nightmare,” said TIME magazine.
Amid the effervescence came the French. Obama’s victory “arouses a wild yet reasonable hope,” claimed Bernard-Henri Levi in the Financial Times . Mr. Obama’s election will affect us in “at least three concrete ways,” he continued...a decisive turning point in dealing with the ‘racial question’ in the US...hope for an America that began doubting its “famous mission”...and with Obama representing the USA, “anti-Americanism...will have a harder time surviving and it will be forced to revisit its sales pitch.”
Nobody knows what America’s “famous mission” is – certainly not the Americans themselves. And if those are his ‘concrete’ ways, we’re glad Mr. Levi is not building bridges. There was nothing concrete about the hopes Mr. Obama’s victory arouse. Just the contrary...they are all in the ether.
They shouldn’t let French philosophers comment on American politics; they take the whole thing far too seriously. Besides, you never know what they are talking about anyway. But Le Monde saw it clearer. Not only was the paper happy to see the United States finally rinse the stain of racism out of the Stars and Stripes, it was glad to see Americans give free market capitalism the flush too.
Obama will be “reviving the role of regulation in the U.S.; [devising] tax policies to smooth out increasingly wide socio-economic divides; planning a health-care system appropriate to the country’s wealth,” said the paper. In other words, he will be putting in a system of state-directed capitalism, just like they have in France.
None of the commentators we read really understood Obama’s triumph. They saw it in a yearning for truth and a stretch for progress. It was nothing of the sort. The last thing voters want is the truth; they will reject it if it is put in front of them. Instead, what they want is diversion from the real world. What they hope to get from their leaders is a kind of entertainment...in short, a fantasy. Something to cheer them up when they are down. Or something to give them a fright when they are up.
You’ll recall from last week, the last period of Great Calamity – 1914-1945, with its wars, epidemics, Dust Bowls, hyperinflation, Great Depression, mass murders, bankruptcy and revolutions. It was in the middle of this period that Americans elected Franklin Roosevelt, who told them they had “nothing to fear but fear itself.” It was all in their heads! It was a whopper, but it was the whopper they wanted to hear.
And then, on right side of the Atlantic, Britain chose Winston Churchill as prime minister, in May 1940. Churchill crossed his fingers and put his hand behind his back immediately, claiming that Britain was not fighting to save its overseas empire, but to “save the whole world.” He promptly kicked out any official who was “exercising a disturbing or depressing influence,” that is, any who dared to tell the truth about Britain’s disastrous military situation.
Just weeks later – in France, after suffering the most humiliating defeat in their history, the French recalled an old man to power, Philippe Petain. The hero of Verdun made the French feel that they had just regained their national glory, not just lost it. But at the time, France’s fantasy seemed on more solid ground than Britain’s...which just goes to show how unreliable history can be. Sometime make-believe becomes real; usually, it doesn’t. Britain got the backing of the Roosevelt administration – which had promised voters to keep America out of the war – and beat the huns; Churchill died a hero. Petain died in disgrace.
Today, in the U.S.A., the Bush Administration has worked hard to make people fearful – with its torture chambers and preposterous “threat levels.” But the terrorists wouldn’t cooperate; they failed to blow up even a trash truck. Alas, now the mob sweats – and for good reason. People are afraid of losing their houses, their jobs, and their retirements. Losses in equities worldwide top $25 trillion. In U.S. housing alone, some $4 trillion has disappeared. That’s why Obama won; it has nothing to do with national redemption or Sarah Palin. When the world was safe and plush...the mob wanted to feel the frisson of danger. What the public wants now is safety: a movie with a happy ending, not a horror flick. Obama appeared the calmer, more intelligent, candidate. Voters could imagine him as the “black Roosevelt” giving soothing fireside chats and telling the lies they most wanted to hear.
And so, in the national narrative, one cockamamie bamboozle takes the place of the one that went before. Americans were supposed to be fearful; now they are supposed to be confident. They were supposed to be racists; now they are supposed to colorblind. They were supposed to defend free market capitalism to their last breath; now they turn to the state and beg it to protect their last dime.
Enjoy your weekend,
Bill BonnerThe Daily Reckoning
P.S. As an interesting aside, do you know what book was number one on Amazon on election night – and the majority of the day that followed? It wasn’t President-Elect Obama’s book, The Audacity of Hope ...no, it was the companion book to I.O.U.S.A. , penned by our very own Addison Wiggin and Kate Incontrera.
Haven’t gotten your copy of the book yet? Never fear, you can get it at the link below...along with the DVD and your own ‘personal bailout’ package. Get everything here .
Editor’s Note: Bill Bonner is the founder and editor of The Daily Reckoning . He is also the author, with Addison Wiggin, of the national best sellers Financial Reckoning Day: Surviving the Soft Depression of the 21st Century and Empire of Debt: The Rise of an Epic Financial Crisis .
Bill’s latest book, Mobs, Messiahs and Markets: Surviving the Public Spectacle in Finance and Politics , written with co-author Lila Rajiva, is available now by clicking here:
Mobs, Messiahs and Markets

The economy’s gone into rehabYeah, yeah, yeah...
Nobama rally yesterday.
World markets had been recovering from October’s drubbing. The Morgan Stanley index, which measures capital market performance around the globe, had risen 20% from last month’s lows. But yesterday, stocks got a drubbing again...
...with a big drop for the Dow...minus 486 points.
And the bad news keeps coming.
GM’s car sales down 45% in October – even as the price of gasoline dropped back to $3 a gallon.
Mastercard says consumers are getting tight with their money.
“Luxury sales drop sharply,” adds the Wall Street Journal .
Foreclosures are up in Miami, New York and Seattle.
And 157,000 people were laid off last month – the most in almost six years.
In England, the Financial Times reports:
“...what was striking about the events of recent days was how suddenly businesses had seized up.”
“The bottom has just fallen out,” the paper quotes an employment expert.
And even the Pope is cutting back. Bloomberg gives us the news:
“For the first time in almost half a century, Vatican administration staff will clock in for work as part of a clampdown on slackers, a sign that the global financial crisis has also spread to the world’s smallest state.
“Timekeeping was scrapped in 1960 under Pope John XXIII. Starting Jan. 1, the practice returns. All Holy See employees will be given magnetic badges and forced to clock in and out in an effort to track their movements and ensure they’re working a full day, said a Vatican spokesman who declined to be named.
“‘We can’t afford any waste,’ Bishop Renato Boccardo, secretary of the Governatorate of Vatican City State, told La Stampa newspaper. ‘There is a lot of work that needs doing, and the financial situation doesn’t allow us to hire more staff.’”
What’s going on?
Let’s put it this way:
The economy’s gone into rehabYeah, yeah, yeah...
And here, we take up our explanation from yesterday...
But before we do, we spare a moment to remember Marcus Aurelius. Obama hasn’t yet called our “Sovereign Hotline” for advice. But when he does, we’re going to recommend he read Marcus Aurelius’s meditations.
Obama has pledged to change things. That part will be easy; things are changing fast. Trouble is, they’re not changing in the way he would like.
When Marcus Aurelius was emperor, Rome was going through major changes too. There were periods of famine, war and plague. Most alarming, the barbarians were at the gates; Marcus Aurelius spent most of his career trying to keep them out.
But you can’t win ’em all. Losses are inevitable. And losses are not necessarily a bad thing:
“Loss is nothing else but change, and change is Nature’s delight,” he wrote.
If you’re wondering how this connects to the economy going into rehab...we’re wondering too...oh yes...now we remember...
Over the last few weeks, we’ve been laying out a view of what is going on. We’ve explained that corrections are not only inevitable...they’re essential and helpful. Like death, no one likes them...but, like death, they clear away the old mistakes and the old wood...making way for new life and new mistakes.
“Change is Nature’s delight,” as Marcus Aurelius puts it.
(Trying to stop change, on the other hand, is Nature’s horror...almost an affront to God himself. But we’ll leave that theme for another day...)
When people borrow too much money, for example, the day eventually comes when things change and they have to pay it back.
And when the party gets too wild for too long, inevitably things change and somebody ends up in rehab. Now, following the wildest party in human history, most of the world’s economy has gone into rehab...and may not come out for a long time.
*** In this period of rehab, corporations, investors and households need to pull themselves together. They need to get rid of houses, projects, businesses, and speculations that they can’t afford. It’s a “balance sheet recession,” as Richard Koo puts it. Balance sheets need to be repaired. Debt must be paid off or written off. Expenses must be reduced so that they can be supported by revenues, and still leave something left over to pay down debt and build up savings. This is hard to do, because revenues are falling too.
Every man looks to his own. Each one cuts his expenses.
“It’s dead out there,” said our taxi driver yesterday. “I don’t know why I bother to come to work. Everybody’s afraid to take a taxi. They’re afraid it might bankrupt them. It’s silly really. They could save a lot of money by getting rid of their cars and just taking cabs. But I would say that, wouldn’t I?”
The taxi driver was talking his book. But he was talking sense too.
“People consider taking a cab a luxury. And it’s easy to cut out. You can see them on the street. They raise their arms to hail a cab and then they think again. They put their arms down and go look for a tube [subway] stop. They probably don’t really save much money, but it’s psychological. Suddenly, everybody thinks he has to save money. I can’t remember anything like it.”
But one man’s expense is another man’s income. The man who saves a pound by not taking a London cab, denies a taxi driver a pound of revenue...who then buys a pound less of gasoline...or a pound less of clothing...or a pound less of something. It is what economists call the “fallacy of composition,” the mistaken idea that what is good for one person is necessarily good for the whole lot. Cutting back on spending is clearly good for the individual, but it does to an economy roughly what a visit from a sniffling grandson does to a bedridden great-grandmother. Pretty soon, the old lady is dead.
“Losses happen,” Marcus Aurelius might say. “Get over it.”
Instead of getting over it, the feds are going to fight it every step of the way. Of course, Japan tried to fight it too, and that its efforts didn’t work. Just look at the evidence: the Japanese tried fiscal stimulus (government spending) and monetary stimulus (central bank policies). They ran deficits of 6% of GDP – equivalent to about a trillion-dollar deficit in the United States. And they took interest rates down to near zero and left them there for years. What else could they do?
Still, as of last week, Japanese investors were about $15 trillion poorer than they had been 18 years ago.
That is why we say these efforts didn’t work. But maybe they worked better than we realize. Maybe the damage might have been a lot worse if the Japanese had not done what they did.
Whatever the case, Obama is about to follow the lead of Hata, Obuchi, Mori and Murayama. And Ben Bernanke, too, will follow the lead of the Japanese. He will cut rates ...just like the Bank of Japan did.
But there are two crucial differences between Japan and the United States. First, Japan had a healthier economy, with a positive trade balance, and huge savings. Second, the United States has the world’s reserve currency.
Japan could easily spend 6% of its GDP trying to replace private spending with government spending. The Japanese saved 19% of GDP. The government could simply borrow from its own people – like the U.S. did to finance WWII. But America can’t finance huge deficits internally; it doesn’t have the money. Its people don’t save. They have no savings to lend their government. Any money the government gets from Americans will have to come out of current private spending or out of other investments. Obviously, this is not going to do much good, since there is no net increase in spending or investing. Nor can the U.S. government expect to bring in unlimited financing from foreign sources. The foreigners save, but they need their money to rescue their own economies. What’s worse, the more the U.S. government has to compete for funds with other borrowers, the more interest rates will go up – worsening the picture for the economy as a whole.
The other point is vitally important too. Not only did Japan have a cushion of cash to comfortably sit out the correction, it had no reason to do otherwise. With money in the bank, the Japanese were never threatened by an economic breakdown. And what money they owed, they owed to themselves.
America has neither of those two comforts. Millions live paycheck to paycheck, depending on credit cards to fill in the gaps. When unemployment rises above 10%...maybe above 15%...they will howl so loud the government will be forced to take desperate measures, which could send the deficit to $2 trillion. Then, crushed under the weight of so much debt, it won’t be long before the feds realize that we don’t “owe it to ourselves.” Instead, we owe trillions to foreigners. Foreign central banks alone hold about $2.4 trillion worth of U.S. government debt. About $10 trillion is said to be the total of all US-based securities in foreign hands. That is a burden that could be easily lightened...if, for example, the dollar weren’t worth quite so much...
More to come...
Bill BonnerThe Daily Reckoning