Monday, November 26, 2012

By Charles Payne, Wall Street Strategies

11/26/2012 8:08 AM Eastern Time

  By Charles Payne, CEO & Principal Analyst

 "The emotions of people are far more similar than their intellect."- Stanley Kubrick

Kubrick understood that in the end, we are self-destructive to a degree. Now we have the ability to extend that self-destructive impulse beyond ourselves and immediate surroundings. This is why there has to be real concern that one day Iran or North Korea would launch a nuke. This is why there has to be real concern that one day Americans would ditch all the pillars that made it the greatest nation in the world, from belief in God and free markets, to try something that sounds "fair."

Such moves would be the culmination of a series of short-term emotional events and decisions. If everyone thinks he or she is a victim in this society, then we may all stand and exclaim "I'm Spartacus." The irony would be that once we began the inevitable last slide from greatness after enacting higher taxes on so many people that work, a carbon tax, a sugary snack tax, and several other taxes combined with productivity-coking regulations, we would be reduced to a human state that could only survive on government handouts. 

It's really all about controlling behavior. The war on success helps fund runaway government spending but it also curbs individual ideas of success. It deters the average person from embracing profit-motivation and soon makes them embrace the notion of a world created from the writings of Voltaire. It would become a homogenized world of fit people tending to small terrace gardens in giant utopian cities, all obedient to government and a communal society. Of course, removing these freedoms isn't easy and has to be done with combination of finesse and muscle.

Case and point is the action in the UK this week that will see the announcement of new taxes to fight cheap booze. Prime Minister Cameron probably suggests 40p a unit tax that would make cheap supermarket lager £1 and bottle of wine £4. After all the warning labels, scare tactics, and common sense when it comes to over indulging drink, the UK government is looking for stronger approach. (I'm not sure if anyone there has heard of that great social experiment in America known as Prohibition.)

Cameron is going for the wallet to stop people from getting drunk. It's insane but illustrates how all these efforts from government to determine more perfect societies end up costing us economic and personal freedoms. Lower wage workers that simply want a brew after work are going to pay the highest cost, but the fact is, they are always the collateral damage. They will pay the biggest price for Obamacare, higher taxes on the so-called rich will take a greater toll on the decidedly not rich, and emotions will still burn.

Once the government goes broke the next step in our backward evolutionary slide would have us resembling cavemen featured in opening scenes of 2001 Space Odyssey.

This stuff doesn't happen overnight and thankfully every nation that tried a combination of socialism and communism failed fast enough to make adjustments that included free markets. Russia gave up the expense of holding together so much territory to focus on its core nation which is minting millionaires and billionaires and sports a 5% unemployment rate even with massive corruption. China's leaders know the end is near for their social experiment, too, as free markets have taken the country from a sea of bicycles to notions of going to the moon. Talk about an upside down world as China has become the largest car market in the world. 

New measures are set to go into effect this week in Washington DC that aim to make 75% of all trips into the city by foot, bike, or public transportation. New parking meter rules will manipulate the ability for visitors to park and make more room for bicycle lanes. Did I say this is an upside down world? Even Marion Berry has expressed concerns about more bike lanes and less parking citing the exorbitant cost to using parking garages.

Yet even the former mayor hesitates to speak ill of more bike lanes.

Social engineering is running amok and it continues to be funded by people that have achieved a modicum of success while punishing those that dare to knock a few back - either Twinkies or beers.

 Cooler Heads Ultimately Prevail 

There is no straight line to a path of glory and maybe this is the fork in the road where America gets off track. We may need to fall off a cliff before being jarred out of this current emotional state. The road to a wonderful socialist utopia where there is neither smog nor fat people, and we work for the greater good so there are no wallets or individual wealth, can't be pulled off for long periods of time. In the end, there are other human emotions, such as a desire, to be the best, a desire to attain stuff, to taste a cream-filled snack loaded with calories and desires to rule our small universe called our life.

But as long as the economy falters and finger pointing replaces executive decisions, it is going to be a long time. But, I do think that in the end, cooler heads will prevail.

 Emotions and the Stock Market 

There are so many stocks that are cheap by any measure, but are depressed mostly for a variety of emotional reasons. Would-be investors are boycotting the market for fear of administration policies and now many people understand higher taxes will dissuade what used to be known as safe investments.>